Case Law
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Kris Motor Spares Ltd v Fox Williams LLP [2010] EWHC 1008 (QB) (12 May 2010)
An after the event insurance policy premium was recoverable as part of a party's costs and there was no basis for concluding that it was not recoverable because the policy was taken out at a late stage in the proceedings. The premium cost £95,550 and the limit of indemnity was £130,000 ! Click on the case name to see the full judgement.
From 01/10/2009 CPR 44.3 has been amended to include CPR 44.3B and 44.12B
CPR 44.3B
If you have an ATE policy and wish to recover the premium as costs you must within 7 days of issue of the policy put the Defendant on notice of the policy and advise them of the indemnity limit and if it is a staged premium you must advise the Defendant of the various stages when the premium increases. NB you do not need to tell them what the premium costs.
FAILURE TO DO SO WILL RESULT IN THE PREMIUM BEING DISALLOWED ON ASSESMENT.
The change will apply to any ATE policy purchased from or CFA signed from 1 October 2009 onwards. Under the amended rules you must provide the Defendant with details of any ATE policy you purchase. You must give the Defendant details of the insurer's name and address; the policy certificate number and date; the level of cover; and you must state whether the premium is fixed or staged. If staged you must indicate the stages at which additional premiums are due. In addition if you have entered into a Conditional Fee Agreement you must tell the Defendant the date of it and whether it provides for a success fee.
CPR PART 44.3B [and see also Para. 19.2 and 19.4[3] of the Practice Direction [Pre-Action Conduct]] now requires you to give this information as soon as possible and at the latest either:
[a] in your first letter of claim or if this has already been sent then:
[b] within 7 days of the date on which the certificate is issued.
The courts also have a new form (N251) "Notice of funding" which can be downloaded here
Civil Procedure Rules and Practice Direction update 6th April 2009
With effect from 6th April 2009 there have been considerable amendments to the Civil Procedure Rules (CPR). Click here to see the full changes
Burgess v J Breheny Contracts Limited [2009] EWHC 90131
Detailed assessment of the Claimant’s ATE insurance premium as liability had been admitted before ATE taken out. Premium was recoverable in full.
Dix v Townend & Anor [2008] EWHC 90117 (Costs)
In this case the judge ruled that this agreement constituted providing insurance without a licence. Even though the claimant’s solicitor won their case, the judge disallowed their entire costs for this reason meaning the solicitor was out of pocket to the tune of a six figure sum.
Avril v Boultby (2008) (Nottingham CC)
On a detailed assessment of costs in a road traffic accident matter, a judge had disallowed the premium incurred in respect of after the event insurance obtained by a claimant, even where liability for the accident had been admitted by the defendant from the outset of the case.
HELD: With regard to the possibility that liability would be withdrawn, neither the judge nor the instant court was in a position to judge the actual risk. Risks of adverse costs orders always existed, and that risk was probably modest. The risk of not recovering disbursements was real. The most obvious risk was the failure to beat a CPR Pt 36 offer. Not beating such an offer might result in the value of the claim being diminished or even obliterated, and nobody generally took the point that insuring against such a risk was unreasonable, Callery v Gray (No2) (2001) EWCA Civ 1246, (2001) 1 WLR 2142 and Claims Direct Test Cases, Re (2003) Lloyd's Rep IR 69 Sup Ct Costs Office considered. It was not clear why, when the amount of the premium could not be said to be disproportionate, the particular risks identified could not reasonably be the subject of after the event insurance. It amounted to saying that the risks, which were not fanciful, and which if realised would be likely seriously to compromise the value of the claim, should be borne by P. A substantial part of the judge's reasoning was that P's solicitor had not supplied evidence of what was in her mind when the policy was taken out that would enable the court to reach the view that the reasons were good reasons. Although the matter had to be judged in the light of the facts existing when the policy was taken out, it was not necessary for the evidence to set out actually what motivated the solicitor to give the advice she did in order for the identified risks to be taken into account. Allowing the amount of such a premium did not depend on the filing of evidence identifying standard risks that obviously applied.
Appeal allowed.
Able UK Ltd v Reliance Security Services Ltd [2006]EWHC 90058 (Costs)
The obtaining of more than one ATE quotation or to trawl the ATE market is not necessary “To insist that the Claimant should have gone in search of alternative insurers would, be to fail to have regard to CPR 1.1(2)(b) and (c)”
Hutchings v The British Transport Police Authority [2006] EWHC 90064 (Costs) (11 October 2006)
The defendants enquiries of the claimant’s Before the Event (BTE) insurance was limited and restricted.
Rodgers v Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134
Staged ATE premiums are recoverable.
Tilby v Perfect Pizza [2002] EWHC 9003 (Costs)
Deferred premium is not subject to the Consumer Credit Act.
Sarwar v Alam [2001] EWCA Civ 1401
The duty of a passenger to use a drivers' Before The Event legal expenses policy is limited.