Staged ATE Premiums

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Rogers -v- Merthyr Tydfil County Borough Council

The claim involved a Claimant who was a minor and who suffered injuries when he fell in a park.  

Damages were agreed in the sum of £3,105.00 plus interest.  Liability however remained an issue and the claim went to trial where the Claimant was successful. 

The costs were summarily assessed and the sum allowed for costs included an ATE premium of £5,103.00.  The Defendants appealed against the costs order and on appeal the Judge appeared to have been influenced by information contained in the publication Litigation Funding.  He reduced the ATE premium to £900.00. 

The Judge observed that according to Litigation Funding insurance for the whole proceedings was available at a cost of between £450.00 and £1,350.00. 

The Court of Appeal held that there could be, in principle, no difference between a two stage success fee (whose merits the Court of Appeal has consistently endorsed) and a staged premium.  In this case the risk to which the insurers were being exposed (the cost exposure of about £6,500.00) justified the premium which was being claimed. 

The Court suggested the following guidance in relation to the procedure to be followed in the future:-

1. A party who has an ATE insurance policy incorporating two or more staged premiums should inform its opponents that the policy is staged and should set out accurately the trigger moments at which the second or later stages will be reached.  This obligation should be undertaken in addition to the obligation set out in CPR 44.15(1) and in paragraph 19.1(1) and 19.4 of the costs practice direction.
2. If an issue arises about the size of a second or third stage premium, it will ordinarily be sufficient for a Claimant’s solicitor to write a brief note for the purpose of the costs assessment explaining how he came to choose the particular ATE product for his client and the basis on which the premium is rated – whether block rated or individually rated. 

The Court disapproved reliance upon extracts of Litigation Funding as not being a reliable source of information as to the cost of insurance.