Senior Costs Judge Hurst
Date: 11/10/06

The Issues:The Claimant sought to recover his ATE Insurance premium. When costs came to be assessed, the Defendants served a Part 18 request to establish whether the Claimant had BTE insurance. They asked firstly whether the Claimant (or anyone else in his household) had building or contents insurance, and if so they requested the insurers' names and whether those policies provided Before The Event legal expenses cover. Secondly they asked why, if there was BTE cover, it was not used; whether the building/contents policy wording had been inspected; and if not, how the Claimant's solicitors knew that it did not include BTE Insurance legal expenses cover.

Held: The Claimant was only obliged to supply the following information:

• whether the Claimant had any kind of insurance policies
• who were the insurers, and whether those policies include BTE legal expenses cover

The existing rule regarding discovery in costs proceedings should be followed, namely that the receiving party is not ordinarily compelled to disclose documentation (since it was likely to be privileged), and therefore requests which really amounted to asking for information contained in documents, would not be allowed.

Comment: The Court (Para. 47) confirmed the existing position, namely that cases to which the CFA Regulations do not apply (CFAs entered into after the 1st of November 2005) may still be subject to the above questioning and challenge, but if such challenge is successful, it will not result in all costs being disallowed, only recovery of the success fee and policy.

This case substantially ameliorates the effect of previous decisions such as Myatt v NCB (2007) -which required the Claimant’s solicitor to normally obtain and read for himself the Claimant’s household and motor etc. policies, rather than rely on the Claimant’s statement that he had no BTE cover – because the Defendant can no longer force the Claimant’s solicitor to prove that he has done so (but note that the Claimant's solicitor is certifying compliance with the pre 2005 Regulations (where they apply) at the stage when the bill of costs is signed, and false certification will be a serious matter).

It remains unclear as to whether the paying Defendant can ask questions to establish whether Garrett v Halton (2007) has been complied with (was the Claimant's solicitor on a referral panel which gave him an interest in recommending a particular ATE policy). The paying Defendant in this present case initially asked such questions, but withdrew them before the hearing (Para.6). It appears however that by analogy such questions would not be permitted since they would be similar in nature to questions regarding BTE investigation, and “fishing expeditions” and satellite litigation regarding costs were specifically deprecated in this judgment.

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