A Senior Regional Costs Judge has ruled that it is perfectly permissible to recover an ATE Insurance policy which was purchased after an admission of liability. The Learned Judge made the ruling in the matter of Avril v Boultby [2008] in the Nottingham County Court.

The defendant in the case had attempted to rely on the often quoted dicta from Master Hurst in the Claims Direct Test Cases. The Senior Costs Judge however decided that, six years on, Master Hurst would most likely have come to a different conclusion when considering the risks in personal injury cases faced by today's claimants.

The Learned Judge identified several real risks which could result in the claimant having to pay adverse costs post admission namely:

1. The admission being withdrawn
2. Adverse costs awarded on an interlocutory hearing
3. Disbursements being disallowed
4. The claimant failing to beat a Part 36 offer.

It was considered that these are real risks which clearly come within those identified by Section 29 of the Access to Justice Act 1999 and so therefore they should be insured against, even after an admission of liabiliy. The Judge referred to Callery v Gray and applied the reasoning that a solicitor should not 'wait and see' but should insure claims from day one of a case or as soon as possible thereafter, notwithstanding an admission of liability.

This is seen as a practical application of the reasoning laid out in Callery v Gray and should put to rest at last the challenges made by defendant insurers on this subject.

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