These two appeals concern the recovery of After the Event (“ATE”) insurance premiums in clinical negligence cases. In each case the claimant took out ATE insurance as soon as solicitors were instructed. In the event both claimants settled by accepting an offer of compensation before any proceedings were issued and before any expert report was commissioned. Under the terms of each policy the claimants would have no personal ultimate liability to pay the premium. If the claim succeeded, the expectation was that it would be paid by the unsuccessful defendant. If the claim failed, or not all the premium was recovered from the defendant, the insurers would bear the loss. In effect, therefore, although the point may arise in the case of privately treated patients, the contest is between insurers and the NHS. (paragraph 1)
…the subject of the insurance was the risk of incurring liability to pay for expert reports (rather than the risk of not being able to pass on that liability)… (paragraph 44)
The Government knew, as Sir Rupert [Jackson] had reported and as the case law made clear, that ATE policies were taken out at the same time as a potential claimant entered into a CFA, and must have intended not to disturb that practice. That, as it seems to me, was also recognised by the Explanatory Memorandum accompanying the No 2 Regulations [The Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No 2) Regulations 2013] (paragraph 75)
I would dismiss the appeal of Peterborough & Stamford NHS Trust; and allow that of Mr Reynolds. (paragraph 80)
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