A circuit judge has rejected a challenge by the NHS Litigation Authority (NHSLA) to a medical negligence ATE insurance premium for failing to comply with the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No. 2) Regulations 2013.
His Honour Judge Pearce at Chester County Court ruled that there was “no requirement” in the regulations that the policy “must state the amount of the premium that relates to the relevant risk”.
In Axelrod v University Hospitals of Leicester NHS Trust, the claimant, Daniel Axelrod, was appealing against a decision at a costs assessment by Deputy District Judge Johnstone to disallow the recovery of his £5,088 ATE premium.
His claim was settled when he accepted the defendant’s part 36 offer of £3,000. Deputy District Judge Johnstone disallowed recovery of the ARAG ATE premium on the grounds on the basis that it “did not insure against a relevant risk”.
However, the parties agreed that the ‘complete recourse’ policy issued by ARAG did insure the claimant in respect of the risks contemplated by the regulations and DDJ Johnstone’s decision “could not be maintained on the grounds set out in his judgment”, though the defendant argued that it could be upheld on different grounds.
These were that it failed to state the amount of the recoverable premium and so did not comply with the statutory regime for recovery, did not “on its face charge a recoverable premium”, and so the court should its exercise its discretion to disallow it.
But HHJ Pearce ruled that the claimant “is not limited to recovering the insurance premium only where the policy states the amount of the premium that relates to the risk of incurring liability for expert reports on the issues of liability and causation”.
He allowed the claimant’s appeal and varied DDJ Johnstone’s costs order accordingly.
Mark Hartigan, client services director at Just Costs, which acted for the claimant, said the case was “just the latest example” of an “apparently spurious technical challenge” to the recoverability of an ATE premium.
Alan Hunter, director of claims at the NHSLA, argued that the claimant had no need to, and did not, obtain an expert report on liability/causation. “Yet the ARAG ATE premium claimed against the NHSLA for covering the miniscule risk of having to pay for expert reports on liability/causation was £5,088.”