The Court considered the validity of after the event legal expenses insurance and conditional fee agreements schemes, and in particular whether an ATE premium was recoverable by a successful claimant. The damages had been agreed in the sum of pounds 3,105 plus interest. The case went to trial and the claimant won. The deputy district judge assessed the costs in the sum of pounds 16,821. This included an ATE premium of pounds 5,103.
Held: The premium was recoverable as a proportionate expense if it was necessarily incurred, even if the amount was large in comparison with the amount of damages reasonably claimed. In support of justifying the premium charged, the court envisaged a note from the solicitor explaining how a particular ATE product came to be chosen and whether it was block rated or individually rated.
Brooke LJ said: ‘In this case it might be thought that all the considerations urged on the court by Mr Bartlett which favour the course taken by Mr Cater, the appellant’s solicitor, might go to demonstrate the reasonableness of his bill of costs – specifically, the ATE insurance staged premium – but not its proportionality: precisely because they have nothing to do with the quantum of the claim. But we do not think that is right. If the court concludes that it was necessary to incur the staged premium, then as this court’s judgment in [Lownds] shows, it should be adjudged a proportionate expense. Necessity here is, we think, not some absolute litmus test. It may be demonstrated by the application of strategic considerations which travel beyond the dictates of the particular case. Thus it may include, as we are persuaded it does, the unavoidable characteristics of the market in insurance of this kind. It does so because this very market is integral to the means of providing access to justice in civil disputes in what may be called the post-legal aid world.
It is important to recognise that this conclusion runs with, not across, the grain of the procedural reforms expressed in the CPR. The very recognition that justice requires a use of resources that is proportionate to what is at stake implies the rightness of a strategic approach. There can be no touchstone of a proportionate use of resources so understood, without an eye to the context in which any such resources are expended. Once it is concluded that the ATE staged premium here was necessarily incurred, principle and pragmatism together compel the conclusion that it was a proportionate expense. We turn therefore to the question whether the ATE staged premium was necessarily incurred.’
Judges:
Brooke VP CA, Laws, Smith LJJ
Citations:
[2006] EWCA Civ 1134, [2007] 1 WLR 808, [2006] Lloyd’s Rep IR 759, [2007] 1 All ER 354, [2007] 1 Costs LR 77
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Tankard v John Fredricks Plastics Ltd; Jones v Attrill etc CA 11-Dec-2008
The defendants sought to argue that the conditional fee arrangement used by the claimant’s solicitors had been void under the 2000 regulations. They claimed that the solicitors had failed to disclose an interest in the policies sold.
Held: No . .
Cited – Kris Motor Spares Ltd v Fox Williams Llp QBD 12-May-2010
The claimant sought to challenge the After the Event Insurance (ATE) bought by its solicitors late in the day in their claim, before then withdrawing the conditional fee agreement. The premium was over andpound;90,000.
Held: The appeal failed. . .
Cited – Meretz Investments Nv and Another v ACP Ltd and others ChD 14-Nov-2007
The parties disputed the success of a sale by a mortgagee in possession of various properties. The parties disputed the apportionment of costs.
Held: The appeal failed. Where there is no express agreement concerning the division of costs, a . .
Cited – Kris Motor Spares Ltd v Fox Williams Llp QBD 12-May-2010
The claimant sought to challenge the After the Event Insurance (ATE) bought by its solicitors late in the day in their claim, before then withdrawing the conditional fee agreement. The premium was over andpound;90,000.
Held: The appeal failed. . .
Cited – Coventry and Others v Lawrence and Another SC 22-Jul-2015
The appellants challenged the compatibility with the European Convention on Human Rights of the system for recovery of costs in civil litigation in England and Wales following the passing of the Access to Justice Act 1999. The parties had been . .
Lists of cited by and citing cases may be incomplete.
Costs, Legal Professions
Updated: 07 July 2022; Ref: scu.244103