In short the answer is yes! Personal injury solicitor can recover the client’s after the event insurance policy in a case that involves an infant claimant.
Case Example One
The case of AAA v DFS Trading Ltd, heard on 21 December 2022, presents an interesting instance in the context of After The Event (ATE) insurance premium recovery in personal injury cases, particularly involving minors and also the success fee.
Brief Facts
The case involved a 10-year-old child who was injured at home by a spring from a sofa supplied by DFS Trading Ltd. The defendant disputed liability, and the case was allocated to the fast track. The parents of the child secured a settlement of £6,500.
Lower Court Decision:
At the Leicester County Court, the parents sought approval for the compromise and recovery of the success fee and ATE premium incurred. The District Judge found the £650 ATE premium plus Insurance Premium Tax (IPT) to be exceedingly high compared to typical Road Traffic Accident (RTA) cases, allowing only £250 including IPT.
Appeal:
The case was appealed at the Bromley County Court. His Honour Judge Hedley, referencing authorities such as West, Rogers, Kris, and the examination by His Honour Judge Lethem in X v H&M, found that the original judge had erred by imposing personal discretion. Consequently, he approved the full sum of the ATE premium claimed.
Summary:
HHJ Letham emphasised that courts should not arbitrate the ATE premium figure, as this is a matter of insurance underwriting and not subject to challenge on a solicitor-own-client basis. The issue appears to stem from a minority of junior courts beginning with the assumption that expenses are unreasonable, leading to a flawed assessment of underwriting complexities. This approach contrasts with the understanding that the representative is not the party seeking the expense but rather the parents or litigation friends. There is a need for clear obligation in the policy for the litigation friend to pay the premium if it is not recoverable from the damages.
Case Example Two
The appeal in the case X v H&M Hennes raised significant points regarding the assessment and recovery of After The Event (ATE) insurance premiums, especially in cases involving minors and litigation friends. The appeal was based on three grounds:
1. Assessment of Insurance Premium:
The appellant argued that the Deputy District Judge (DDJ) incorrectly assessed the ATE insurance premium as excessively high. This approach was considered impermissible following the precedent set in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220. This case established that the assessment of ATE premiums should not be arbitrarily deemed too high without proper consideration of the specifics of the case and the nature of the insurance market.
2. Reasonableness of Premium Recovery:
The appellant contended that the DDJ erred in assessing the reasonableness of recovering the ATE premium from the Claimant’s damages from a solicitor and own client perspective. It was argued to be inconsistent for the Court to disallow the premium, particularly under circumstances where the litigation friend was acting in the best interests of the Claimant.
3. Error of Discretion in Judging Insurable Risk:
The appeal also highlighted an error in the DDJ’s discretion by finding that the insurance premium was not reasonably incurred and was not reasonable in amount. Since the 25% success fee was allowed, it was implied that there was an insurable risk. The DDJ’s conclusion that the risk was so negligible that it was unreasonable to insure the case was contested as being incorrect.
Summary
Both cases reflect the complexities involved in the assessment of ATE premiums, particularly in the context of personal injury cases involving minors. The case underscores the necessity for courts to carefully consider the nature of ATE insurance, the specifics of each case, and established legal principles when determining the reasonableness of such premiums.
