In West v Stockport NHS Foundation Trust & Demouilpied v Stockport NHS Foundation Trust  EWCA Civ 1220, the Court of Appeal provided new guidance on assessing block-rated ATE premiums, as well as providing more general guidance on applying the proportionality test in claims for costs.
Two claimants brought clinical negligence claims against assessed costs of insurer ARAG’s block-rated ATE insurance premiums. Both recovered their full ATE premium in the landmark decision.
The Court commented on the ‘absence of consistency’ in how bills were assessed at first instance. They provided new guidance on both reasonableness and proportionality, in the process they commissioned a five-day fact-finding hearing culminating in a 70-page report on ATE Premiums in clinical negligence.
On reasonableness – the court stated that this must be considered within the wider insurance market. Any challenge by a defendant must be genuine and expert evidence must be obtained. Comparing the premium to the value of the claim was an unreliable indicator as the block-rate premiums in question relied on the ‘swings and roundabout’ of the ATE market.
On proportionality – the court required that ‘all the circumstances’ (including the wider ATE market) be considered. Although some ‘unavoidable costs’ (e.g. including court fees and reasonable ATE premiums) should be left out of the consideration. There should also be a ‘line-by-line’ assessment considering the reasonableness of each item of the bill – the resulting figure being proportionate in the circumstances.
This new guidance should go some way to clearing inconsistencies in the tests being applied at first instance, however, what is proportionate to one Judge may not be to another.