To pay costs of the ATE Premium or not?

To pay costs of the ATE Premium or not – that is the question or Claimants ‘dance’ in delight with decision in Dance.

It should be stated from the outset that Defendants have never been pleased to pay for costs of After The Event insurance (ATE) premiums and have presented several clever arguments to avoid paying for the premiums in past cases. In the case of of Dance v East Kent University Hospital [2022], Costs Judge Leonard was assessing the Claimant’s costs in clinical negligence claim, considered two ingenious arguments from the Defendants, who tried to avoid paying for the ATE premium following settlement via the Claimant’s acceptance a Part 36 Offer.

 

The Defendants argued that; acceptance of a Part 36 Offer did not constitute an order for costs; this point was substantiated by Cartwright v Venduct Engineering Limited, the Court of Appeal confirmed that a Part 36 offer or a Tomlin Order did not amount to an ‘order for costs‘. The Defendant’s second argument was that even if there is an order for costs, the ATE premium will be only recoverable if the costs order makes specific reference to that effect. The Defendant refers to an editorial note at paragraph 48.0.4 of Sweet & Maxwell’s “Civil Procedure”, also known as ‘the White Book’. This argument was based in considering the deemed order for costs after acceptance of a Part 36 Offer and whether the term “costs” can be given two different meanings.

Costs Judge Leonard stated in reference to the first argument that, “It is not in issue that the Claimant accepted the first Defendant’s Part 36 offer within the period set by the first Defendant for acceptance. His right to recover costs arises, accordingly, under 36.13(1) of the Civil Procedure Rules (“CPR”). CPR 44.9(1)(b) provides that in those circumstances, a costs order in the Claimant’s favour will be deemed to have been made on the standard basis.” Therefore, this argument was unsuccessful and was not further pursued by the Defendant.

In relation to the second argument, Costs Judge Leonard stated that he admired the ingenuity of the Defendant’s submissions but did not find them persuasive, even though this meant he disagreed with the findings reached by the author of the note at 48.0.4 to the White Book. The Costs Judge found that the ATE premiums do fall within the definition of “costs” within in the definition of CPR 44.1(1) and thus a costs order will permit a Claimant to recover an ATE premium unless that order makes specific reference to the contrary. Consequently, the Claimant’s costs in relation to the ATE premium were allowed in full.

ATE premiums are recoverable in cases where there is a deemed Costs Order unless the Order expressly states otherwise.

PIC can help Claimant firms with the recovery of the ATE premiums and advise in relation to the same. Please get in touch with PIC for further assistance.

Shohaib Younis, Costs Draftsman & Solicitor

03458 727678