THE LIVERPOOL ATE PREMIUM TEST CASES

In mid-2011 a number of Part 44.12A cases were received in Liverpool and from the Claim Forms it was apparent that the profit costs were agreed under either Section II or Section VI of Part 45 and disbursements were agreed save for the claimed ATE premium, either in whole or in part (and in a handful of cases the medical report fee as well).
By early September the number of such cases had become substantial and RCJ was receiving standard form letters from two defendants’ solicitors indicating that either a) they had similar cases pending in the SCCO (without identifying such cases); or b) saying they had over one hundred such cases pending and requesting a stay. He took the decision to stay all such claims with a view to setting up a number of cases to be dealt with as test cases.
In early December RCJ selected fourteen cases from those before him. Although he had little information about the policies involved, he selected a number of both Claimants’ and Defendants’ representatives with a view to securing as wide a representation of the parties’ interests as possible.

On 12th December RCJ gave directions to bring those cases to a hearing. Those directions included the following provisions:
“6. Receiving Party’s solicitors shall if so advised serve witness statements setting out their reasons for their choice of ATE policy and exhibiting the policy terms and conditions and schedule, and their understanding of the policy options available to them by 3rd February 2012.
7. Paying Party’s solicitors/insurers shall if so advised serve witness statements setting out details of any policies they consider appropriate and their terms and conditions by 3rd February 2012.
10. Any party is at liberty to apply in writing for reconsideration of the above directions by 6th January 2012”.

At the same time RCJ issued a further note in which he said:
“ . . . I am also anxious that as many issues as possible can be dealt with at the same time. As far as I am aware the principal potential issues are
a) whether it is reasonable for a Receiving Party to use a block rated policy when cheaper individually rated policies are available;
b) whether the use of staged premium policies is reasonable or necessary; and
c) whether in Protocol cases there is a need for an ATE policy before Stage 3 given the minimal risk of the Claimant not recovering costs.”

On the basis of the Claimant and Defendant’s representatives’ submissions RCJ made the following obserevations:-
General considerations
These type of cases must be dealt with having regard to Part 44.4 (1).( The court will not allow costs (which includes disbursements) which have been unreasonably incurred or are unreasonable in amount.
It was not asserted that it was unreasonable to incur ATE premiums in these cases – the argument is primarily as to the timing of the decision and the choice of policy.
The timing of the decision as to funding
RCJ considered in line with Callery (No. 1) and that these principles apply as much to Protocol cases as any other, and it was reasonable to enter into the funding arrangements when the Claimants did, which in these cases was at the first instruction of their solicitors.
He was ‘‘fortified ‘by the fact that the staged premium policies are designed to be used throughout the Protocol process, not just after Stage 1 or Stage 2.’
The choice of policy
RCJ considered the guidance from Callery (No. 1) (that the premium must be a reasonable one). Staged premium policies were also considered as in Rogers.
The evidence in these cases was that the average single premium fell roughly between £350 and £450. The staged policies had a range of stage 2 (or B) premiums after exit from the Protocol but before issue of between £350 and £544.50. It was observed that there was little difference between the two models at this point.
On that basis, there was no “right or wrong” decisions made. Both single premium and staged premium policies were legitimate
RCJ also made observations on the ‘commercial reality’ that solicitors consider policies and providers available and generally restrict themselves to one or two providers.
Conclusion
RCJ held ‘Claimant and his solicitor are entitled to choose either a single premium policy or one with staged premiums. Either is permissible; neither can properly be said to be unreasonable, if taken out at the outset.’
This Decision should now pave the way to settlement of thousands of cases currently stayed by the ATE issues particularly in the light of the SCCO decision in Phillips v. Whiddett ( Master Leonard, 2November 2011, SCCO Ref:1104738)

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