The after-the-event insurer which saw its premium halved by the Senior Costs Judge in his controversial application of the post-Jackson proportionality test said today it should not apply to those areas of litigation where additional liabilities are still recoverable.
Temple Legal Protection said it was supporting the claimant’s bid to appeal in BNM v MGN, arguing that the ruling risked reducing claimants’ access to justice.
The case has been much talked-about by costs specialists and Temple said the ability for individuals and businesses to litigate was under threat from “a judgment that implements a new costs regime with no indication on how to make an assessment of what is proportionate.
“The implications for this judgment are that the rule of law will only be open to those who can afford it.”
Steve Ruffle, Temple’s senior underwriting manager for commercial ATE claims, said: “In my view, the Senior Costs Judge is wrong to apply the new proportionality costs regime to areas of the litigation landscape where additional liabilities are still recoverable.
“Parliament has determined that, in certain categories of case, this method of funding to ensure access to justice must continue and, therefore, the new test of proportionality has no part to play when assessing additional liabilities.”
He noted that even though the judge found the ATE insurance premium was set at a reasonable level, and that it was necessary for the claimant to purchase ATE, “the judge has slashed this figure in half with no apparent justification”.
Mr Ruffle added: “My deepest concern is that this judgment will be used by well-resourced defendants, who can afford not to recover all of their costs, to run up their legal spend knowing full well that a claimant would not be able to match this and, therefore, could only recover a level of costs in line with their damages.
“This flies in the face of the recent judgment in Miller v Associated Newspapers Limited where the Judge found that ‘ATE provides a legitimate social purpose’ and that the ‘burden imposed by the ATE premium scheme is not so large and not so lacking in appropriate controls as to amount to a disproportionate inference in their right to freedom of expression’.”
He argued that ATE should be considered in the context of the risk assumed by Temple, rather than against the level of damages being claimed. “In addition, a premium for a particular case must be considered in the context of a book of similar cases insured.”
Mr Ruffle said Master Gordon-Saker did not apply the principles laid out in the 2007 Court of Appeal case of Rogers v Merthyr Tydfil BC that any necessarily incurred premium would be proportionate but also that any challenge to or reduction of the ATE premium should be based on evidence which was absent in this case.
“Temple’s premiums have been set at an appropriate level using years of underwriting data and experience. Many of the country’s leading media law firms rely on the backing and support of Temple in order to pursue claims for their clients. If premiums are unreasonably reduced, this will limit our ability to support meritorious claims going forward and restrict access to justice.”
Nigel Tait, managing partner and head of media law at renowned media claimant firm Carter-Ruck – who was not involved in the case – said that the ruling would mean that only the “super rich” would be able to bring proceedings for misuse of private information.