A circuit judge has rejected a challenge by the NHS Litigation Authority (NHSLA) to a medical negligence ATE insurance premium described by the claimant as a “perfectly normal block policy”.
His Honour Judge Pearce at Chester County Court ruled that there was “no requirement” in the 2013 regulations on recoverability of premiums that the policy “must state the amount of the premium that relates to the relevant risk”.
The court heard in Axelrod v University Hospitals of Leicester NHS Trust (claim no. AO1CH564) that the claimant, Daniel Axelrod, appealed against a decision at a costs assessment by Deputy Judge Johnstone to disallow the recovery of his ATE premium.
Mr Axelrod fractured his leg playing football. He underwent surgery during which screws were used to stabilise the fracture. It was accepted on behalf of the defendant that one of the screws was too long, causing cartilage damage.
The claim was settled when Mr Axelrod accepted the defendant’s part 36 offer of £3,000.
HHJ Pearce said that on provisional assessment of the claimant’s costs, the court allowed recovery of an insurance premium of £5,088. The defendant challenged this under the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No2) Regulations 2013, and on the grounds the premium was disproportionate.
The judge said the claimant argued that the policy was a “perfectly normal block policy”.
Deputy District Judge Johnstone disallowed recovery on the grounds on the basis that it “did not insure against a relevant risk”.
However, the parties agreed that the ‘complete recourse’ policy issued by ARAG did insure the claimant in respect of the risks contemplated by the regulations and DDJ Johnstone’s decision “could not be maintained on the grounds set out in his judgment”, though the defendant argued that it could be upheld on different grounds.
These were that it failed to state the amount of the recoverable premium and so did not comply with the statutory regime for recovery, did not “on its face charge a recoverable premium”, and so the court should its exercise its discretion to disallow it.
However, HHJ Pearce ruled that the claimant “is not limited to recovering the insurance premium only where the policy states the amount of the premium that relates to the risk of incurring liability for expert reports on the issues of liability and causation”.
He allowed the claimant’s appeal and varied DDJ Johnstone’s costs order accordingly.
Mark Hartigan, client services director at Just Costs, which acted for the claimant, said the case was “just the latest example” of an “apparently spurious technical challenge” to the recoverability of an ATE premium.
“It is difficult not to question whether such successive, ultimately futile challenges are an appropriate use of public funds.”