The defendant costs specialists

Posts Tagged "ATE"

Defective ATE insurance certificates

By on Jul 30, 2010 | 2 comments

When After-the-Event insurance premiums became recoverable back in 2000, the Costs Practice Direction introduced the following rule as to what should be provided when serving a bill of costs: 32.5(2) – If the additional liability is an insurance premium: a copy of the insurance certificate showing whether the policy covers the receiving party’s own costs; his opponent’s costs; or his own costs and his opponent’s costs; and the maximum extent of that cover; and the amount of the premium paid or payable. Other than some subtle changes to the wording, to make this gender neutral, the rule remains the same today. So why is it that 10 years after this rule was introduced I still routinely see certificates served with bills of costs that do not comply? The most common defect is a certificate that fails to identify what it covers. Almost as common is a failure to serve any certificate at all but instead serve a consumer credit agreement in relation to the ATE policy that doesn’t itself come close to complying with the requirements of 32.5(2). Given the consequences of failing to serve a compliant certificate (see CPR 44.3B(1)(e)) you would think ATE insurers would make a bit more effort. How hard can it be?...

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A working alternative to recoverable success fees?

By on Dec 4, 2009 | 2 comments

As the tension mounts as to what might be going through the mind of Lord Justice Jackson as he prepares his final report on his civil costs review, might he be influenced by the litigation landscape north of the boarder?  The recently published Report of the Scottish Civil Courts Review states that the majority of damages claims in Scotland are pursued on the basis of "speculative fee arrangements" (no win, no fee agreements).  This is despite the fact that: "Unlike in England and Wales, success fees and ‘after the event’ insurance premiums are not recoverable and will have to be paid by a successful [claimant] from the damages recovered, unless they are waived or absorbed by the [claimant’s] solicitor".  Jackson LJ’s Preliminary Report raises a number of concerns about the English system of recoverable success fees and ATE premiums.  If non-recovery seems to work in Scotland, why not here? And while Jackson LJ may be looking north of the boarder, they are looking back.  The Scottish report concludes: "We have given careful consideration to the use made of speculative fee arrangements in this country and the experience of conditional fee agreements in England and Wales. We consider that it would be premature to recommend any changes to speculative fee agreements as they are presently constituted in Scotland. The civil costs review in England and Wales chaired by Lord Justice Jackson should be monitored for its research findings and its conclusions" Deep-fried Mars Bar anyone? Click image to enlarge:  ...

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Notification of funding – The New Rules

By on Oct 14, 2009 | 1 comment

In a previous posting (read here) I discussed the old rules relating to providing information about the funding of a claim.  The latest update to the Civil Procedure Rules has made important amendments which came into force on 1st October 2009.   The old CPR 44.3B read:   “(1) A party may not recover as an additional liability –   (c) any additional liability for any period in the proceedings during which he failed to provide information about a funding arrangement in accordance with a rule, practice direction or court order”   The new wording of CPR 44.3B is:   “(1) Unless the court orders otherwise, a party may not recover as an additional liability –   (c) any additional liability for any period during which that party failed to provide information about a funding arrangement in accordance with a rule, practice direction or court order;   …   (e) any insurance premium where that party has failed to provide information about the insurance policy in question by the time required by a rule, practice direction or court order.   (Paragraph 9.3 of the Practice Direction (Pre-Action Conduct) provides that a party must inform any other party as soon as possible about a funding arrangement entered into before the start of proceedings.)”   These changes fall into four categories:   1.      The wording “in the proceedings” is deleted and the reference to the new wording of the Practice Direction (Pre Action Conduct) makes it clear that notice must now be given pre-proceedings.   2.      The insurance premium provision deals with the consequence of not giving the information discussed below.   3.      The addition of the new wording “unless the court orders otherwise” is perhaps surprising. It was previously clear that failure to comply with the notification provision produced an automatic sanction in that the additional liability was not recoverable (in the absence of a successful application for relief from sanctions).  It now appears to be in the general discretion of the court as to whether to allow the additional liability despite the breach, although the starting point is obviously non-recoverability.  What is strange is that the new wording is followed by the same note that previously appeared: “Rule 3.9...

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Notification of funding – The Old Rules

By on Oct 5, 2009 | 0 comments

The old Practice Direction – Protocols (PDP), at paragraph 4, stated:   “A.1 Where a person enters into a funding arrangement within the meaning of rule 43.2(1)(k) he should inform other potential parties to the claim that he has done so.     A.2 Paragraph 4A.1 applies to all proceedings whether proceedings to which a pre action protocol applies or otherwise.     (CPR rule 44.3B(1)(c) provides that a party may not recover any additional liability for any period in the proceedings during which he failed to provide information about a funding arrangement in accordance with a rule, practice direction or court order.)”     On 9th April 2009 this was replaced with the Practice Direction – Pre-Action Protocols.  The relevant section, at 9.3, is substantially the same:     “Where a party enters into a funding arrangement within the meaning of rule 43.2(1)(k), that party should inform the other parties about this arrangement as soon as possible.     (CPR rule 44.3B(1)(c) provides that a party may not recover certain additional costs where information about a funding arrangement was not provided.)”     These sections have, surprisingly, caused problems. This has been due to a conflicting interpretation as to how the word “should” ought to be understood. Is it meant to be a mandatory provision or simply a “recommendation”?     Master Campbell, in Metcalfe v Clipston [2004] EWHC 9005 (Costs), adopted the latter interpretation:     “For [the paying party] to succeed, I consider the obligation on the receiving party to give notification of funding pre issue must be absolute but in my judgment, the word ‘should’ in the PDP does not impose such an obligation. On the contrary, I would construe ‘should’ as meaning ‘ought to’ which is not the same as ‘has to’ or ‘must’. Likewise I consider that a step that is ‘recommended’ under the CPD does not involve any element of compulsion but instead means ‘favoured’. It follows that I find against [the paying party]. In my judgment, pre issue, all the CPD does is to recommend that information is provided and although Section 19.2(5) states that notification may be required by a pre-action protocol, there is nothing in the clinical dispute protocol...

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Jackson Costs Review – Part 4 – Legal Expense Insurance and Success Fees

By on Jun 25, 2009 | 0 comments

Lord Justice Jackson’s Preliminary Report on Civil Litigation Costs reaches a “tentative conclusion” that: “It seems to me to be in the public interest to promote a substantial extension of BTE insurance, especially insurance in the category BTE1 [Before-the-Event legal expense insurance where insurers pay solicitors to act for the insured when a claim arises]. The cost of litigation in any year by the few insured who need to bring or defend claims will then be born by the many who do not”. The Report records the Bar’s CLAF Group proposal that BTE insurance should be compulsory for motorists (to cover themselves and anyone they may injure), employers and occupiers of buildings (again to cover themselves, employees, visitors or customers). Jackson LJ states that this proposal “merits serious consideration”. The impact of such a proposal if implemented would be, by implication, to largely kill off CFAs and ATE insurers. In a previous posting I wrote on the subject of Jackson LJ’s proposals for ending two-way costs shifting and moving to one-way costs shifting, at least for personal injury work. The Report comments: “It is, however, worth noting that if cost shifting against claimants were to be abolished, the main purpose of ATE insurance premiums would also disappear”. Jackson LJ’s expresses the view: “If any layer of activity can be removed from the process (and insurance against adverse costs liability is one layer of activity), it may be thought that this will serve the public interest”. ATE insurers have previously been very successful in lobbying to protect their place in the current costs system. They may well have their work cut out now to maintain the status quo. Even if costs shifting were to remain unaltered, Jackson LJ nevertheless is considering: “whether success fees and ATE premiums should continue to be recoverable under costs orders”. This would potentially return the position to the pre-April 2000 one where any success fee or ATE premium was payable out of the claimant’s damages. One option that Jackson LJ seems to be considering, and for which he asked for further assistance at the Sweet and Maxwell Conditional Fee Agreement Conference in May, is whether to increase damages to a level that enables a return...

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