Rosemary Garstang

The landmark Court of Appeal judgment in West v Stockport NHS Foundation Trust and Demouilpied v Stockport NHS Foundation Trust has been hailed as a victory for access to justice for the victims of clinical negligence.

These two cases were heard by the Court of Appeal at the same time.  Both related to clinical negligence claims which had settled without the need for court proceedings.  The dispute concerned the level of recoverable ATE premium in each case.

The Court, following these cases and the previous cases of McMenemy & Reynolds  have now provided clear guidance on  issues which have allowed Defendants for many years to challenge the level of ATE premiums in Clinical negligence cases.

Since the implementation of LASPO, we have seen a number of challenges from Defendants as to the reasonableness and proportionality of ATE premiums for these types of cases.

The most popular argument is when a claimant’s case settles without a medical report.  That hurdle was overcome after the judgment in the Court of Appeal case of Peterborough & Stamford Hospitals NHS Trust v McMenemy & Others [2017].  The Court here was considering two cases in which claimants had taken out ATE policies for clinical negligence and both cases settled before the issue of proceedings, and indeed before expert evidence was obtained.  It was decided by the Court that it is appropriate for a claimant to take out an after the event policy at the stage when a conditional fee agreement was entered into.

However, the arguments of reasonableness and proportionality have reigned and Box Legal welcomes this decision which will now provides an important consistency and sees an end to disputes over the recoverability of block-rated ATE premiums.

The Court, has importantly recognised that to simply compare the costs of a block-rated ATE with either the value of a claim or settlement in a case is not a reliable way of assessing how reasonable a premium is.

Once the reasonableness of a block-rated ATE premium has been established it cannot subsequently be reduced on the grounds of proportionality as it is classed as an unavoidable cost, without which the litigation could not have progressed

In summary this judgment decides two things:-

  1. ATE premiums are not subject to proportionality;
  2. It will be very difficult for defendant to challenge a block rated policy, unless they have a large test case with a group of policies and comprehensive expert evidence on the state of the ATE market.

What the next argument will be who can tell….

Costs Victory – round three to the Claimant…