Claimants did not act unreasonably in switching funding from a damages-based agreement to a conditional fee agreement shortly before trial, even though the defendants are now facing a much larger bill, a costs judge has ruled.
A regional costs judge was “quite wrong” to assume that “his underwriting skill was better than that of the underwriter” and slashing an after-the-event insurance premium by 85%, the High Court has ruled. It also found that the claimant had little choice but to accept the quoted premium “and the necessity of so doing makes the premium proportionate”.
Clinical negligence claimants can continue to take out after-the-event insurance for expert reports when they enter into conditional fee agreements, and premiums will be recoverable even if the case settles before the reports are commissioned, the Court of Appeal has decided in a major ruling today.
After-the-event insurance which can be voided does not constitute adequate security for costs, the Court of Appeal has ruled. Overturning the decision of Mr Justice Snowden, it said the case raised “important questions of principle” because there may be a tendency for judges at first instance to accept that an ATE policy can stand as security for costs.
Proportionality involves more than simply comparing costs budgets with the size of the damages claimed, a High Court judge has made clear. Mr Justice Nugee was ruling in a £350m claim, where the defendants’ costs budgets amounted to only about 7% of the claim.
The Senior Costs Judge was wrong to apply the new proportionality test to additional liabilities in a case that began before LASPO took effect on 1 April 2013, the Court of Appeal has ruled. However, it did not offer any hoped-for guidance on the new test, although it is understood that three conjoined cases raising the issue are due to be heard soon.
Almost half of insolvency practitioners believe that litigation work has declined since removal of the exemption from LASPO in April 2016, a survey has found. The remaining half of the 225 insolvency practitioners who took part in the survey said there had been “no noticeable difference”.
Leading legal expenses insurance operator Elite Insurance Company is expecting a solvent run-off in the wake of its surprise announcement last month to cease writing new business, it has told its Gibraltar regulator. It holds surplus capital over its minimum capital requirement of £22.2m.