Disproportionate ATE premium slashed from £31,976.49 to £2,120 - DAC Beachcroft

Disproportionate ATE premium slashed from £31,976.49 to £2,120's Tags

Tags related to this article

Disproportionate ATE premium slashed from £31,976.49 to £2,120

Published 23 February 2017

In 2009, Lord Justice Jackson stated that "in some areas of civil litigation, costs are disproportionate and impede access to justice". Subsequently, the reforms of 2013, triggered by his report, have made significant changes to procedure and costs, but the need for the further reforms he now proposes, and the benefit of the extension of fixed costs into clinical negligence claims canvassed by the Department of Health, can clearly be seen in the judgment of Master Simons in Rezek-Clarke v Moorfields Eye Hospital NHS Foundation Trust.

Overview of the case

The Claimant sought damages following a delay in being referred for scanning, which led to a delay in the discovery of a pituitary tumour. Breach of duty was admitted but causation was disputed, and the claim went on to settle in the sum of £3,250. 

The Claimant first instructed his solicitors following the reforms of 1 April 2013, and therefore the After the Event (ATE) Insurance purchased by the Claimant protected him from a liability to pay his own disbursements; the risk of his being required to pay the Defendant's costs was restricted by the application of qualified one-way costs shifting.

Following settlement, the Claimant's costs claim was presented in the sum of £72,320.85, i.e. over 22 times the damages paid, and the ATE premium alone was claimed at £31,976.49. The ATE insurance premium was asserted to have been based on 200% of the cost of reports prior to litigation, increased on the commencement of proceedings, albeit on that basis the premium was over-calculated by £9,700.

Overview of the judgement

Master Simons found, initially on provisional assessment and maintained at detailed assessment, that the ATE premium bore no reasonable relationship with this claim, which did not ever have a value in excess of £5,000; this was a low value routine clinical negligence claim on which proceedings were issued due to limitation, rather than the complexity of the claim, and the ATE policy was inappropriate for this claim. 

The Master concluded that the appropriate level of premium should have been £2,120 (1/15 of the sum claimed) and reduced the total bill from £72,320.85 to £24,604.40.

While the Master did not give a judgment on whether the DAS ATE policy is suitable for low value clinical negligence claims in general, the significant reduction of the costs claimed reminds us that the reform of costs in civil litigation is required, and the horizontal and vertical extension of fixed costs beyond personal injury claims is overdue.

The decision will be welcomed by all med-mal Insurers, Insureds, and defendants to clinical negligence litigation.

Authors

Simon Perkins

Simon Perkins

Bristol

+44 (0) 117 918 2040

David Williams

David Williams

Leeds

+44 (0)113 251 4844

< Back to articles