The Issue: Liability had been admitted from the outset in a road traffic accident. Could an After the Event Insurance premium taken out after that admission, be recovered?

Held: The Defendant in the case had attempted to rely on the often quoted dicta from Master Hurst in the Claims Direct Test Cases ( [2002] EWHC 9002 (Costs) - Para.223). 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.

There were several real risks which could result in the claimant having to pay adverse costs after an 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 The admission being withdrawn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 were real risks which clearly came within those identified by Section 29 of the Access to Justice Act 1999 and therefore they should be insured against, even after an admission of liability. In line with the reasoning in Callery v Gray, a solicitor should not 'wait and see' but should take out After the Event Insurance on all claims from the outset of a case or as soon as possible thereafter, notwithstanding an admission of liability.

Comment: This can be seen as a practical application of the reasoning laid out in Callery v Gray and should at last put to rest the challenges of ATE Insurance premiums made by defendant insurers where liability has been admitted.

Box Legal Limited: After the Event Insurance Providers
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