In a recent victory, Ontime Group’s costs experts have won a dispute relating to the recoverability of an After the Event Insurance premium.
The Claimant had suffered injury as a result of a Road Traffic Accident. His damages were settled in the sum of £2,950.93 prior to issue of proceedings via the Claims Portal for Low Value RTA claims. Fixed costs, plus VAT and success fee were agreed and paid by the Defendant Insurer. Although initially there was a dispute in relation to the medical report fee, the parties were able to reach an agreement which meant the only matter outstanding was the insurance premium in the sum of £418.70.
Despite setting out in correspondence that to the Defendant Insurer in open correspondence that enquiries were made pursuant to Sarwar v Alam  EWCA Civ 1401 and that no indemnity cover was confirmed by the BTE provider, the Defendant maintained that the premium was not recoverable.
The Claimant issued Part 8 proceedings and Detailed Assessment was commenced. In their Points of Dispute, the Defendant’s Insurer argued that: the Claimant had not made sufficient enquiries into alternative means of funding before taking out the insurance; that there was Before the Event Insurance available; and that this was a case which was suitable for such cover. In Replies to the Points of Dispute, the Claimant maintained that full enquiries were made and proceeded to set out details of the attempts to secure indemnity with the BTE provider. Essentially the BTE insurer would not provide indemnity until certain information was provided, when that information was provided, more information was requested. At the stage that the claim had settled the BTE provider has not confirmed indemnity.
The Defendant made no offers in relation to the premium. 1 week before the Detailed Assessment hearing, the Claimant offered to settle the claim for £918.70 (£418.70 for the premium plus £500 costs of detailed assessment/Part 8 proceedings). This offer was made on a commercial basis to save costs of attending the Detailed Assessment hearing. The Defendant rejected the offer so the parties proceeded to the hearing.
At the hearing, held at Macclesfield County Court, the Defendant maintained that this was a case suitable for BTE insurance and invited the Court to consider the enquires which were made and whether they were reasonable. The Defendant pointed out that the Claimant refused to disclose the letters, but the same were available to the Court in the Detailed Assessment bundle. Additionally the Defendant’s representative argued that, as the Claimant had initially instructed a panel solicitor that he was referred to by his BTE insurer, he had unreasonably decided to change solicitor. They argued that Sarwar v Alam places some restriction on the Claimant’s ability to choose a solicitor. That effectively the Claimant had incurred the premium as a result of their decision to change solicitor and that the Defendant should not have to pay the resulting increase in costs.
It was not disputed by Claimant that there was BTE cover or that this was a case suitable for such cover. Furthermore, in Sarwar the existence of the BTE cover came to light during the costs proceedings, the Claimant’s representatives had not made sufficient enquires to establish whether there was such cover before taking out funding under a CFA and ATE policy. This case could be distinguished from Sarwar as the Claimant had transferred from another solicitor who was funded under the BTE cover. Attempts were made to secure indemnity under the pre-existing BTE policy. The Court was referred to the several attempts made. In particular the Court was pointed to a letter to the BTE insurance provider which confirmed that we had taken out ATE as a precaution and that if they confirmed indemnity that cover could be withdrawn. It was argued that the Claimant did have the right to choose his solicitor if he was not happy with the service provided by the panel solicitors, he could not be expected to stay with those solicitors and receive a poor service simply as they were the chosen solicitors of the BTE insurance provider. The BTE insurance provider should have been able to confirm indemnity quickly given that liability was admitted. Given the delays, it was entirely reasonable for the Claimant’s Solicitors to take out an ATE policy in order to protect the Claimant.
The Court held in favour of the Claimant. The Deputy District Judge held that this was not a case where the Claimant had not made sufficient enquiries pursuant to Sarwar, the question for the Claimant’s representatives was whether the insurers would agree to indemnify the case. The Claimant was entitled to choose his representatives. The Judge commended the parties for reaching an amicable and quick settlement in relation to the damages but the Claimant’s representatives could not have known that it would be such a case. The Court could not apply hindsight when deciding the reasonableness of the decision to take out ATE cover. It found that the Claimant’s solicitors had acted perfectly reasonably in taking out insurance to cover their client against adverse risk. Having considered the correspondence sent, the court found that the Claimant’s solicitors had made every attempt to utilise the BTE insurance.
The Court found that the premium was recoverable from the Defendant in the sum of £418.70. Upon summary assessment the Claimant’s costs of Detailed Assessment/Part 8 proceedings were assessed in the sum of £1,433.95.