Background

This was a personal injury claim brought on behalf of a child.  The claim had settled for £2,250.00, which DDJ Walton approved.  The Claimant’s solicitors sought approval of a success fee of £450.00 together with the ATE premium of £675.00.  The court allowed a reduced success fee but disallowed the ATE completely.  The Claimant’s solicitors appealed the decision.

The Issues

The court considered the decision to both limit the Claimant’s success fee and disallow the ATE premium whilst considering relevant case law:  Herbert v HH Law Ltd [2019] and West v Stockport NHS Foundation Trust [2019].

Held

For the reasons set out in West v Stockport NHS Foundation Trust, the premium amount is not to be decided by reference to the facts in any particular case. (Para. 44)

The ATE premium was not disproportionate and the court below was wrong to conclude that it was not reasonable to enter into the ATE at all. (Para. 46)

The court below correctly acknowledged that there were costs risks against which insurance could be taken out, but was wrong in determining that the risks were so low or unlikely that there was no need for the ATE. (Para. 47). It was not possible to say with certainty that the case was bound to settle. (Para. 48 (4))

The risks against which protection is provided by an ATE policy go further than an adverse costs order, and may include liability for other disbursements such as second opinion medical reports. An adverse costs risk is present notwithstanding QOCS - for example, the effect of any Part 36 offer. A similar point was made in BXC v DTA [2021] EWHC B27 (Costs) at [87]. There are also general risks inherent in all litigation. (Para. 48 (2)

If the success fee was allowed, it would be wrong not to allow deduction of the ATE premium (Para. 52).

The solicitors were entitled to all of the sums claimed, limited to a maximum of £1,125 (50% of the damages of £2,250).

Comment

This is an important decision which confirms that payment of an ATE insurance premium out of damages should generally be allowed in child cases and certainly be allowed if a success fee is allowed. It also clarifies the position regarding client damages and deductions, especially in child cases where the recovery of success fees and ATE premiums attract greater scrutiny.

See Copy of the Judgement here:

Duffield v WW Morrison Supermarkets Ltd [2025] EWCC 35 (01 July 2025)

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