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Clinical negligence costs news – Claimant ATE premium successful recovery in Part 36 settlement case

Recoverable clinical negligence after the event insurance premiums are rather an oddity in that they sit outside the intentions of the Jackson reforms, and do not neatly fit into the CPR.  Whilst there are Regulations relating to their recoverability their assessment is mainly subject to case law, with West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 being the main case relating.  However, despite the Court of Appeal comments in West as to the correct way to assess such premiums, that does not stop Defendants seeking to raise imaginative and technical challenges to the premiums.

In the case considered here, Dance v East Kent University Hospitals NHS Foundation Trust & Ors [2022] EWHC B9 (Costs), the Claimant had settled the claim by way of acceptance of the Defendant’s Part 36 offer, there was not a separate costs entitlement above the Part 36 offer and acceptance.  The Defendant raised two substantive arguments.  The first centred upon the decision in Cartwright v Venduct Engineering Limited [2018] EWCA Civ 1654 and an argument that a Part 36 offer or a Tomlin Order did not amount to an ‘order for costs’, which was shortly dismissed with reference to CPR 44.9(1)(b) and the Court of Appeal in Cartwright having made no finding as contended for by the Defendant.

The second challenge was more significant, being that even where there is an order for costs, the ATE premium will only be recoverable if the costs order makes specific provision to that effect.  The Defendant relied upon the White Book note at 48.0.4;

“Regulation 3 of the 2013 Regulations provides that ‘a costs order made in favour of a party to clinical negligence proceedings who has taken out a costs insurance policy may include provision requiring the payment of an amount in respect of all or part of the premium of that policy’. It is therefore incumbent upon the party seeking costs to request the judge to include the necessary provision when making the order. If no such provision is included in the order, the cost of the premium will not be recoverable. The Civil Procedure Rule Committee decided that there was no need for any further rules in respect of ATE premiums in clinical negligence cases.”

Master Leonard disagreed with the conclusion of the authors of the White Book in that it was necessary for the receiving party to seek permission for ATE premium recovery.  Whilst paying respect to the “ingenuity” of the Defendant’s arguments about whether the term “costs” can be given two different meanings he did not accept that The Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No 2) Regulations 2013 creates 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 Claimant’s submissions with reference to McMenemy v Peterborough and Stamford Hospitals NHS Trust [2017] EWCA Civ 1941 having already determined that the definition of “costs” under the CPR must in clinical negligence cases extend to recoverable ATE premiums was accepted.  Specific reference was made to Lewison LJ’s judgment in McMenemy at paragraph 79:

“I think that it is unfortunate that the Rules Committee took the view that there was no need for rules or practice directions dealing with the recovery of ATE insurance premiums in clinical negligence cases; and would invite them to reconsider the question. At the moment, however the pieces of the jigsaw puzzle are manoeuvred they do not all fit properly.”

What does the judgment mean?

Based on Master Leonard’s views it’s not necessary for Claimants to obtain an order detailing specifically that the payment of the receiving party’s costs include specific provision for the payment of the recoverable ATE premium for cases settled (whether by Part 36 or otherwise), which is something for Claimants to ‘dance’ about.

Caroline Engledow (was Cousins), Costs Lawyer, instructed for the successful Claimant – with thanks to Counsel, Kevin Latham of King’s Chambers

If you require any assistance with your legal costs requirements, please do get in touch with the team on 01733 350 880, or by email mail@aandmbacon.co.uk. For more information please do visit our website www.aandmbacon.co.uk.

Published 11 April 2022

Caroline Engledow (was Cousins)

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