In a recent appellate hearing before HHJ Lethem, it was clarified that the starting point in relation to deductions for ATE premiums is that the expense itself is reasonable, it is not for the Court to challenge the costs.

During the previous hearing before DDJ Blake, he declined to allow a deduction for the insurance premium because it was simply not justified and was unnecessary. This was appealed on three grounds:

1. The deputy district judge erred in his approach to the assessment of insurance premiums in saying that the amount of the premium was too high, and that this was impermissible following the decision of the Court of Appeal in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220;
2. The judge fell into error of law in failing to address the question of reasonableness of recovery of the premium from the claimant’s damages in a solicitor and own client context;
3. There was an error of discretion that, insofar as the learned district judge had a discretion, he was wrong to find that the ATE premiums were not reasonably incurred and reasonable in amount.

HHJ Lethem decided that the appeal succeeded in respect of grounds 2 and 3. It is not open to a district judge to consider quantum on a case-by-case basis as to what they consider fair in light of the award. The point of departure should have been that these costs were reasonable, both in being incurred and in quantum, whereas the judge approached the matter on the basis that they were unreasonable and simply supportive of that position. 

This now sets the precedent that the Court must consider the cost as a concept reasonable, not challenge the amount being taken for that cost.