2019: The highs and lows in law and ATE

11th December 2019

It’s been another interesting year across the clinical negligence, civil litigation and personal injury sectors. We asked some of our ATE team and solicitor partners for their thoughts on 2019…

What do you feel was the highlight in the Clin Neg, Civil and/or PI sectors in 2019?
Paul O’Connor

Paul O’Connor

Paul O’Connor, O’Connors: The highlight for me has been the way many legal services providers have successfully responded to market challenges by re-engineering and investing in their business models. Legal service providers have always been creative and innovative.

Geoff Silva, Silva Legal: One of the most important issues which has been clarified emanates from the judgment in West v Stockport NHS Foundation Trust and Demouilpied v Stockport NHS Foundation Trust. This has been seen as a real triumph for access to justice for the victims of clinical negligence.

The judgment addresses how the key principles of reasonableness and proportionality should be properly applied when assessing the validity of the block-rated After-The-Event (ATE) insurance premiums that have been used to help fund clinical negligence actions since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

Geoff Silva

Geoff Silva

The court has confirmed that ATE insurance, and recovery of the associated premium, is fundamental to the victims of clinical negligence being able to access justice, and that this must be the starting point for any debate about the recoverability of premiums.

The court also provided clarity to guide costs judges when assessing the reasonableness and proportionality of ATE premiums in cases brought since the implementation of LASPO. For clinical negligence premiums, it is now established that:

  • They can be taken out at an early stage; and
  • To challenge the amount, specific expert evidence must be adduced (beyond examples of cheaper policies).

Enrique Gomez, DAS UK Group: For us as an ATE insurer, the biggest highlight of the year was probably the outcome of the West & Demouilpied v Stockport NHS Foundation Trust case in the court of appeal which brought to an end several months of uncertainty about the recoverability of our premiums.

Nicholas Lee, Paragon Costs Solutions: The highlight of the year was the Court of Appeal decision in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 (17 July 2019). This judgment provided much needed clarity around the court’s approach to block-rated ATE premiums. Notably, that a comparison between a block-rated premium and the sums in issue in the claim was not a reliable measure.

Nicholas Lee

Nicholas Lee

The ATE premium is an unavoidable cost and, if it reasonable in amount, it should not be reduced further on the grounds of proportionality. The decision goes one step further and deals with proportionality under the post April 2013 regime. The court concluded that fixed and unavoidable costs should not be reduced further on the grounds of proportionality.

If, post assessment, the overcall costs remain disproportionate, then the court should reconsider categories of cost which are not fixed and unavoidable.

John Durbin, DAS UK Group: For me, the judgment handed down by the Court of Appeal in West & Demouilpied v Stockport NHS Foundation Trust was a huge highlight and has hopefully put to bed previous uncertainly around the recoverability of ATE premiums.

The judgment also acknowledged that if claimants are to be truly granted access to justice, then the continued existence of an ATE market to support this type of claim is of paramount importance. This should also result in quicker resolution of costs and premiums on future cases, which is something we have already begun to see with an increase in closed clinical negligence cases and a surge in recovered premium in the five months since the decision.

And the lowpoint…?

Nicholas Lee, Paragon Costs Solutions: A low point this year, and every year since 2010, is the fact that the SCCO guideline hourly rates have not been revised. Whilst these are rarely relied upon by the courts, they ought to be revised if only to account for inflation.

Another disappointment was the decision in Barts Health NHS Trust v Salmon in relation to costs budgeting. The judge found that a phase being incomplete was in itself good reason to depart from the approved budget. If the intention was simply that the budget must be reduced to reflect the unspent costs then that it is entirely logical, but if the reality is that an underspent budget opens up the entire costs of that phase to challenge then that is far from desirable.

John Durbin

John Durbin

John Durbin, DAS UK Group: Staying on the ATE theme, LAMP Insurance going into liquidation must be considered a low point for the market.

Despite rumours circulating for a period of time before, it was still a big shock when it actually happened. It left many clients in a very uncertain position regarding their ongoing protection and law firms seeking an alternative ATE provider.

It has also created uncertainty over the long term sustainability of other ATE insurers and law firms must be diligent in selecting the right ATE insurer going forward to ensure their clients are adequately protected.

Enrique Gomez

Enrique Gomez

Paul O’Connor, O’Connors: The low point for me has been the ongoing threat to the financial viability of many law firms because of the uncertainty created by the constant government and regulatory reforms to the sector.

Enrique Gomez, DAS UK Group: From an ATE insurer point of view the biggest low-point in the market has got to be LAMP’s liquidation as well as the volatility we’ve seen in the large civil litigation space.

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