The Issues:

Defendant agreed to pay “the claimant’s costs of the action to be the subject of detailed assessment on a standard basis in default of agreement”. The cost of the After the Event (‘ATE’) Insurance premium was disputed.

Crucial to the dispute regarding the amount of ATE premium, was the fact that in September 2013, (shortly before trial in October 2013) the claimant, without warning the defendant, took out additional “top-up” cover. The existing cover was £50,000, but the defendant estimated existing costs were £290,000.00 and future estimated costs were £290,000.00. The claimant purchased additional staged top-up cover - the premium was £319,315.07 up to 45 days before trial and £533,017.13 within 45 days of trial.  Notice of Funding was given to the defendant only once the top-up cover was in place.

The initial decision was decided at an assessment hearing where Regional Costs Judge, District Judge Moss ordered that the defendant pay the claimant the sum of £82,513.07.  This was despite DJ Moss initially deciding it was reasonable for the claimant to ‘top up’ the premium, even at a late stage in the proceedings.  He concluded that had the claimant’s solicitors sought to increase the indemnity when they ought to have realised that £50,000.00 cover was insufficient then additional cover would have been available on more favourable terms than those offered in 2013 and the way the policy had been structured meant that the defendant had not had opportunity to settle the claim before the final stage was reached.

The claimant appealed against the order and permission was granted in March 2017.

The matter was then heard by Mr Justin Martin Spencer sitting at the Manchester District Registry.

The claimant argued that at the time when the ‘top up’ insurance was taken out this was necessary to protect the claimant’s position as to costs, should the claimant fail to beat the Part 36 offer. 

The defendant’s submissions were based on the fact that an appeal court should not interfere with  findings of fact and that the District Judge had been correct in his approach that the extent of additional cover and the amount of premium took the second premium outside the scope of the original kind of ATE policy.