The decision in Dance v East Kent University Hospitals NHS Foundation Trust concerns the recovery of the Claimant’s ATE insurance premium from the Defendant. The claim for costs arose from a clinical negligence matter which settled by way of Part 36 acceptance.
Since April 2013, the general rule has been that ATE premiums are not recoverable between the parties. Clinical negligence claims are, however, subject to an exception which provides that the Claimant can recover the part of the premium which relates to the risk of incurring a liability to pay for expert reports relating to liability or causation. The exception is set out in regulation 3 of the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No 2) Regulations 2013, “The No 2 Regulations”.
The recoverable element in this instance was £5,266.01. There was no dispute that the amount was recoverable in principle under the regulations, however, the First Defendant argued that there had to be specific provision for this in the order.
The Defendant relied upon an editorial note in the White Book regarding the No 2 Regulations. Regulation 3 of the No 2 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’. The White Book states that “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 note in the White Book and held that the No 2 Regulations did not introduce a requirement that the recoverable ATE premium must be expressly provided for in the order. He did not accept that the regulations were intended to create further judicial oversight, in addition to assessment, exclusively for recoverable ATE premiums. The regulations were only intended to establish the criteria for a premium to meet to be recoverable. The court then had discretion under CPR 44 to disallow all or part of the premium at the assessment stage.
The full judgment can be found here.
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