11 March 2002
25 July 2014
9 September 2013
5 November 2013
25 June 2014
27 November 2013
In a costs hearing last week, Amelans successfully rebuffed an argument which stated that an after the event (ATE) insurance policy provided by Temple Legal Protection should be regarded as a credit arrangement. It was the third in a series of similar cases involving Amelans and Temple and the latest attempt to find a loophole sufficiently large for defendant insurers to squeeze through.
The costs hearing was nothing unusual. The legal arguments were inventive and well made, with Robert McGinty of 24a St John Street acting for defendant Perfect Pizza and liability insurer Highway Insurance, and Marc Willems of Cobden House Chambers representing claimant Karen Tilby. The idea was that because most insurance premiums are paid prior to the start of cover, so too should premiums for policies protecting costs liability in litigation. Claims Direct, the Accident Group and others ask for payment in advance and claimants can either cough up, or if they don't have the cash, take out a loan to pay for their policy.
There is nothing intrinsic to legal insurance that makes upfront payment a problem, so should there be a one size fits all rule? Costs judge Master Hurst wasn't persuaded, and it is easy to see why. He said: "Litigants in general might be put off litigating if they had to pay significant amounts of money, such as insurance premiums, at the outset of their claim."
Some personal injury (PI) claims are inevitably spurious and some PI lawyers have been perceived as ambulance-chasing chancers. The trouble is that genuine claimants are being ill-served if they cannot pursue their claim and seek redress.
The Woolf reforms and 1999's subsequent Access to Justice Act were not envisaged as a way to prevent claims being made, but to pass on the costs born by the public purse to private funders, namely insurance companies. As Hurst concluded: "In my view this area of insurance is still in its infancy and the practice and procedure is developing." It is nearly two years old, and in the eyes of a number of personal injury lawyers its growth has been stunted.
The case of Tilby v Perfect Pizza has duly joined Callery v Gray and Sarwar v Alam to form the holy trinity of cases set to establish workable ground rules for the recoverability of premiums paid by claimants to ensure the costs of legal action. Anybody observing the machinations of defendant insurers seeking to dispute payment of these premiums could now be fooled into thinking that enough is enough - the issue has been sufficiently debated, so can we move on now please?
But although sensible, it would be a more premature conclusion than even that made by jubilant Bayern Munich fans in 1999 before Manchester United came back in the closing seconds of the Champions League final. This issue is one of labyrinthine complexity that makes the rules of etiquette at the tea party in Alice in Wonderland look comprehensible.
Callery v Gray should have provided clarity, but it is safe to say that it didn't, particularly as it still has to come to an end. The case is due to come to the House of Lords in April as Beachcroft Wansbroughs gained leave to appeal the previous costs decision for defendant Charles Gray and his liability insurers Norwich Union.
At the last round, costs judge Master O'Hare concluded that Temple's £350 premium for Stephen Callery's ATE policy was reasonable and could be recovered from Gray's insurers. It did not establish that £350 was a reasonable premium for all personal injury claims. Whatever the Law Lords decide in this instance, it is essential that ATE protocol be established once and, if not for all, for as many as possible. PI lawyers have claims stacking up where the case has settled but costs still need to be decided.
The most recent argument that Temple's policy should fall within the Consumer Credit Act holds as much water as the idea that diners should pay for a meal before eating it, or that legal advice should be withheld until lawyers' fees have been met. But having negated this attempt to avoid reimbursing the successful claimant's insurance premium of £350, defendant insurers are sure to have other arguments up their sleeves.