ATE alert after Parliament raises questions over clinical negligence regulations

Parliament: joint committee doubts government explanation

The government has pledged to address concerns raised by MPs and peers that the new regulations governing the recoverability of after-the-event insurance premiums for expert reports in clinical negligence cases are unlawful.

It has emerged that earlier this month the Statutory Instruments Joint Committee raised formal questions over the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings Regulations 2013.

The concern centres around the failure of the regulations to define what types of clinical negligence proceedings and insurance policies are affected, when the changes introduced by section 46 of the Legal Aid, Sentencing and Punishment Offenders Act 2012 (inserting a new section 58C in the Courts and Legal Services Act 1990) appears to require that by talking about “prescribed” proceedings and policies.

The government had told the committee that it did not intend to reduce the breadth of the definition of proceedings and policies.

The committee said: “This response assumes that the reference to proceedings and policies of a prescribed description in the Act are superfluous. Not only does this assumption appear to ignore accepted principles of statutory interpretation, but it also conflicts with the words of the Explanatory Notes to section 46 of the 2012 Act… ‘The effect of section 58C is to limit the recoverability of insurance premiums to certain clinical negligence proceedings’ [the committee’s emphasis].”

It continued: “The committee’s view is that the wording of the Act arguably requires regulations to relate only to specified descriptions of proceedings and policies and that even if that is regarded as an unnecessarily strict view, the Explanatory Notes appear to create a clear expectation that coverage of the regulations in respect of proceedings will be less than comprehensive.

“The committee accordingly reports these regulations for appearing to be of doubtful vires and (to the extent that the vires exist) making an unexpected use of the power under which they were made.”

A Ministry of Justice spokesman told Litigation Futures: “We have received the Joint Committee on Statutory Instruments’ report and are taking steps to address the issues they have raised.”

Costs expert Kerry Underwood blogged yesterday: “It will be very unwise of claimant solicitors to assume that any element of the ATE insurance premium will be recoverable. The courts are always able to strike down secondary legislation as ultra vires and it is obviously a very powerful argument in favour of striking down that the very parliamentary committee charged with scrutinising secondary legislation expressed serious concerns about the validity of these regulations.

“In practice all ATE policies on everything should be incepted by midnight 31 March 2013. Most ATE insurers and brokers are working all of Easter weekend and so should you be.”