The Issues:

The Claimant had successfully pursued a personal injury claim against the defendant following a slipping accident in their car park.

The Claimant had earlier obtained a three-stage block rated ATE insurance policy, with an indemnity limit up to £100,000.00.

The Defendant had contested the level of ATE premium at first instance and this was reduced from £18,073.02 to £2,500.00, the Recorders decision appearing to be based on the assumption that there was a straight line relationship between the level of indemnity cover and the premium.

The Claimant appealed against this decision to reduce her after-the-event (ATE) insurance premium on the basis that the Recorder had erred in his approach when reducing the claimant’s ATE premium.

Held:

In respect of the ATE premium and on Appeal, the court concluded that the recorder had assumed that there was a straight-line relationship pro rata between the level of cover and the premium; so the higher the level of cover, the higher the level of premium would be.

However, the Recorder should not have reached that conclusion contrary to the expert evidence that had been provided as to how the ATE premium had been calculated.

It was held that the Recorder had erred in finding the premium to be too high and then taking a broad-brush approach in reducing it when also in the absence of evidence as to the availability of any other policy which was suitable for the claimant to have chosen instead.

The matter has been referred back to a regional costs judge to re-assess the premium and consider whether it had been reasonable for the Claimant to have chosen the policy in question.

Comment:

Once again a Claimant’s ATE premium has been challenged with no evidence being presented as to other comparable ATE cover that was available at the time the policy was first taken.

Whilst there have been many cases where ATE insurance premium costs have been challenged by defendants in respect of reasonableness and proportionality, this case also acts as a reminder that Defendants cannot assume that the level of the premium claimed follows directly to the level of indemnity provided.

We will of course report further once the matter has been re-assessed by the regional costs judge.

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