8th July 2016
Matt Waszak (instructed by Jessica Tebbs of A&M Bacon) acted for the successful appellant in an appeal before Mr Justice Langstaff on 07.07.16. The appeal was brought in respect of a Recorder’s summary assessment of a pre-LASPO after-the-event (ATE) insurance premium incepted to fund a personal injury claim arising from a slipping accident.
At the conclusion of trial, in which the Claimant had succeeded on liability, the Recorder reduced the Claimant’s ATE premium, a DAS 80E three-staged policy with a £100,000 limit of indemnity, from £18,073.02 to £2,500. In making that reduction, the Recorder considered that (i) the insurers had fallen into error by applying the £100,000 as a standard limit of indemnity and (ii) that the appropriate limit of indemnity in this case would not have exceeded £15,000. He proceeded to award £2,500 which he considered represented, on a pro rata basis, the correct premium for the policy had its limit of indemnity been £15,000. The conclusion that he reached was unsupported by evidence.
Allowing the appeal, Langstaff J held that on a proper application of Rogers v Merthyr Tydfil  EWCA 1134: (i) he was unable to accept the Recorder’s assumption that there was a straight line relationship between the level of indemnity cover and the premium, for which there was no evidence; (ii) such a conclusion could not have legitimately been reached given the Claimant’s evidence explaining how the ATE premium had been priced based on an assessment of the insurer’s basket of risk; (iii) the approach taken by the Recorder ignored the nature of the insurance product; and (iv) the Recorder’s reduction was an error of principle.
Langstaff J’s judgment, an authoritative restatement of the correct approach to the assessment of pre-LASPO ATE insurance, follows and considered the recent judgments of Her Honour Judge Walden-Smith in Banks v London Borough of Hillingdon (Claim No B40CL020) and Foskett J’s Judgment in Surrey v Barnet and Chase Farm Hospitals NHS Trust  EWHC 1598 (QB). Significantly, Langstaff J ‘expressed reservations’ about the approach adopted by Foskett J in Surrey towards ATE assessment.