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P36 acceptances and the ATE premium; an argument over “costs”

(Estimated reading time: 3 minutes 0 seconds)

Many arguments have been advanced since LASPO attacking the recoverability of After the Event (“ATE”) insurance premiums, but the recent decision in Dance v East Kent University Hospitals NHS Foundation Trust & Ors [2022] EWHC B9 (Costs) has found that the ATE premium of £5,266.01 was payable in full, thus ensuring that Claimants continue to be provided with access to justice without having to overcome a further otiose technical challenge.

The challenge put forward by the paying party contained two submissions, the first of which followed the Court of Appeal’s decision in Cartwright v Venduct Engineering Limited [2018] EWCA Civ 1654 where a Part 36 offer or a Tomlin Order did not amount to an order for costs. However, this was not the main area of attack.

The second, stronger submission, was based on the interpretation of costs and Regulation 3 of The Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No. 2) Regulations 2013 (“the No 2 Regulations”). It was argued that the receiving party would only be able recover the ATE premium if they have an order to that effect in their favour. Without this order, there is no entitlement to the recoverable ATE premium.

Whilst Costs Master Leonard considered the arguments put forward by Mr Friston for the defendant, these were not accepted, as these would unnecessarily require all P36 offers to expressly include provision for the recoverable ATE premium within a costs order.

Master Leonard said “Whilst I admire the ingenuity of Mr Friston’s submissions, I do not find them persuasive. My reasons are, in summary, first that I do not accept that the No 2 Regulations create an exception to the normal rule that “costs” as defined at CPR 44.1(1) are (subject to assessment) recoverable under any order for costs without specific provision for any particular element of those costs: and second, that recoverable ATE premiums do fall within the definition of “costs” at CPR 44.1(1).”

The Master concluded that the submissions made by the paying party were not sufficient to alter the current CPR rules in place regarding recoverability. Any issues arising in respect of premium challenges can be addressed at assessment – without an additional step to make further provision solely for the purposes of the ATE premium.

Leonard added “For that reason and for the other reasons I have given, the wording of the No 2 Regulations does not support the conclusion that they add to the CPR by introducing an additional requirement to the effect that a recoverable ATE premium must be expressly provided for in a costs order.”

“It follows that a recoverable ATE premium will, subject to the normal principles on the assessment of costs, be recoverable under any order for costs (whether deemed or actual) without any need for the order, CPR Part 36, or any other part of the CPR to make further provision.”

It was concluded that the case of McMenemy v Peterborough and Stamford Hospitals NHS Trust [2017] EWCA Civ 1941 has already determined the definition of “costs” under the CPR which must, in clinical negligence matters, extend to include recoverable ATE premiums.

The Temple Perspective

It is reassuring to see the Court continuing to acknowledge the importance of ATE insurance within the field of clinical negligence litigation and the vital role it plays in providing cover for the risks of incurring fees for the Claimant’s own breach and causation expert evidence.

With the rising costs of obtaining appropriate expert evidence, now would be a good time to consider utilising Temple for your ATE insurance needs. If you would like further information please contact us on 01483 577877.