The Court of Appeal gives judgment, which effectively dismisses challenges to block rated ATE Premiums in Clinical Negligence Claims where it was reasonable to take out insurance
Background of the Case
It is accepted that Clinical Negligence cases are expensive to litigate and that there is a significant degree of risk, as whether liability will be proved is a matter which requires Expert Evidence. These complexities have been recognised by an exception which allows for the recovery of the Premium of ATE insurance post LAPSO so far as such premiums relate to the costs of expert evidence in relation to liability, including causation.
The largest players in that ATE market have developed block rated premiums, that is premiums which are not set by reference to the risk factors in the individual case but rather with a set premium for a class of cases.
In the case of West and Demouilpied the Claimants had recovered damages of £10,000 and £4,500 respectively. After the Detailed Assessment procedure was complete the premiums, which were both part of the same scheme where the policy was claimed at £5,088, had been reduced to £2,500 and £650, which might be said to be evidence of the inconsistency of Detailed Assessment. Interestingly the Court of Appeal was concerned with that and the Court of Appeal’s comments on this are certainly worth a look for anyone who is involved in preparing for or appearing at a Detailed Assessment, particularly one in an unfamiliar County Court.
The Court of Appeal was clear that reasonableness of the Policy is not to be judged by reference to the individual case in a block rated premium but rather by reference to the Market, and thus the Court should be slow to enter on Detailed Assessment in a usual case any exploration of the operation of that market.
In order for such a challenge to be mounted the Court found that what was required was not the usual “this premium is available and cheaper” material but rather expert evidence. Further the Court specifically said that the premium should not be judged by reference to the value of the claim.
It will be interesting to see how those opposing Claimant Clinical Negligence costs claims approach Points of Dispute but it does seem that the Court of Appeal has largely disapproved the standard objections which we at PIC see in response to a claim for the recovery of the ATE Premium.
The Approach on Detailed Assessment
So the guidance in Rogers v Merthyr Tydfil so far as that relates to producing evidence on the reasons why a scheme of insurance was used remains a good starting point for Claimant lawyers as that should assist with demonstrating that a premium was reasonably incurred and reasonable in amount.
PIC can assist with training or with the preparation of such statements which, if a good choice of policy for your needs is made and the reasons for that demonstrated in evidence, should given the judgement of the Court of Appeal here lead to the recovery of the ATE premium without delay or deduction!
Once a block rated premium has been found to be reasonable the judgement indicates that there is no real ground for a further challenge on proportionality which has the effect of reducing the premium. The Court had this to say:
“At that stage, however, any reductions for proportionality should exclude those elements of costs which are properly regarded as unavoidable, such as court fees, the reasonable element of the ATE premium in clinical negligence cases, and the like. Specifically, therefore, if the ATE premium is assessed as reasonable, it will not fall to be reduced by any further assessment of proportionality.”
The effect of this guidance has a wider benefit too then in those cases where proportionality is in issue in any case which involves a premium, or indeed other fixed items such as Court fees, and that is that these sums are to be allowed in addition to the global reduction for proportionality.
So, a good result for the ATE providers and for those assisting Claimants in advancing claims for damages as a consequence of negligent medical mistakes.
A word of caution though, the Court of Appeal has asked for written submissions on the question of whether there should be leave for Appeal to the Supreme Court. Traditionally costs has been seen as a matter of procedure and thus the highest court have been reluctant to interfere with the Court of Appeal, but it seems complete clarity and finality is closer but not quite definitively here.
Emma Ganley – Costs Consultant – Partners in Costs