After the Event Insurance Premiums: are they payable by the losing party following acceptance of a Claimant CPR 36 offer?

Defendants, over the years, have presented several clever arguments to avoid paying for After The Event insurance (ATE). In the case of Dance v East Kent University Hospital [2022] the Defendants tried to avoid paying the ATE premium, following acceptance of the Claimant’s Part 36 Offer. Costs Judge Leonard, during his assessment of the Claimant’s costs of a clinical negligence claim, was asked to consider two ingenious arguments from the Defendants.

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 referred to an editorial note at paragraph 48.0.4 of Sweet & Maxwell’s “Civil Procedure”, also known as ‘the White Book’. This argument centred around whether the term “costs” could 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 he “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 CPR 44.1(1) definition of “costs” 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.

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Published 20 April 2022