Recoverability of After-The-Event Premiums in Clinical Negligence

12 February 2016

It is now almost three years since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPOA) changes, whereby recoverability of After-The-Event (ATE) premiums from losing opponents was stopped in all but a few claim types (clinical negligence claims being one area whereby recovery of an ATE premium, for the risk of incurring liability and causation evidence, was still allowed). Despite this, ARAG continues to lead the way in terms of providing both quality products for our solicitor partners, thus allowing access to justice for thousands of citizens and also high quality expertise in dealing with often technical cost disputes on successful cases.

Our experience, and those of our solicitor partners, is that the NHS Litigation Authority (NHSLA) have taken a broad stance to challenge all costs at conclusion of successful cases.
Its stance is often unreasonable in our view and cases such as Reid v Buckinghamshire Healthcare NHS Trust, whereby the Court found that the NHSLA had unreasonably refused to mediate in Detailed Assessment proceedings, thus leading the Judge to award Indemnity Basis costs to the Claimant, only highlight our concern with their approach.

However, our approach has been consistent and reasonable throughout. We recommend early offers of settlement on costs to our solicitor partners (we would recommend making a Part 36 for the recoverable premium as soon as the claim for damages conclude).
Should a dispute arise thereafter, we have dedicated staff at ARAG able to assist in responding to such disputes and, if necessary, we are prepared to instruct our own costs draftsman to take ownership of the premium disputes.

As more post-LASPOA clinical negligence claims are now settling, the more our experience shows that our premiums are recoverable in these claims.
A recent case over what was alleged to be a defect in our schedules (Axelrod v University Hospital of Leicester NHS Trust), was won in its entirety on appeal after ARAG set out the weakness in the NHSLA’s arguments.
Whilst this is a high profile case, we continue to be successful at both Provisional Assessments and Detailed Assessments in recovering our premiums in clinical negligence claims.

The above is all good news for ARAG and also our solicitor partners, however, there is a wider public policy concern that the NHS is wasting taxpayers’ money running these cost disputes.
There is not only the expense of having to pay the Claimant’s cost draftsman fees but there are often penalties for not accepting offers sooner (e.g. failure to accept a Part 36 on costs in time) and interest to pay. Further, in running these disputes, often unreasonably in our view, the NHSLA have their own costs to bear.

ARAG do not believe that this is good use of public funds and we continue to lobby the Government over the same. Indeed, our previous blog of 5th January on the Insurance Premium Tax changes and the impact this will have on the NHS also refers here.

For our solicitor partners, they can be reassured that ARAG continues to be the high quality ATE provider of choice, and experts in the field of premium recoverability.

Should any solicitor partner of ARAG have any queries on premium recoverability, please contact your Account Manager, or if you do not have one, please contact Mike Knight, head of ATE Business Development –

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