The Court of Appeal has ruled that the full value of an After The Event (ATE) premium could be recovered from the liable defendent.

The Court of Appeal handed down judgment in Rogers v Merthyr Tydfil CBC, a case involving a claim by Jonathan Rogers for damages suffered by him in a fall in a local park.

The defendant Merthyr Tydfil CBC contested liability but at trial the claim was successful and damages of just over £3,000 were awarded to the Claimant.

The case was conducted under a Conditional Fee Agreement supported by an ATE policy taken out with 80e (the ATE insurance division of DAS Legal Expenses Insurance).

This policy provided for the premium to increase at stages as the case progressed, and the total premium payable as a result of the case going to trial amounted to £4860 plus IPT.

The District Judge who heard the case allowed the premium in full, but on appeal to the Circuit Judge, Merthyr were successful in having this reduced to £900.

The Court of Appeal gave permission for a further appeal recognising the importance of the case to the ATE industry and the need for guidance as to the approach to be taken on recoverability of ATE premiums generally.

This was the first opportunity the Court of Appeal had to consider these issues since the previous case of Callery v Gray and various parties (including other ATE insurers, liability insurers and the Law Society) were given the opportunity to intervene.

The judgment of the Court was given by Lord Justice Brooke in one of his final acts as vice-president of the Court of Appeal prior to his retirement from that post.

The Court allowed the appeal and ordered that the full premium should be recovered, accepting that far from being too high, it was “not fixed at a sufficiently high level to reflect the risk and to provide a contribution to the insurer's reasonable overheads and profit”.

The Court gave guidance on how “proportionality” applies to these premiums and as to the approach which Courts should adopt in considering these sorts of challenges in future.

The Court also agreed with the views previously expressed by Master Hurst that production of generalised material such as that found in Litigation Funding (upon which the Defendants had relied) was of no assistance in determining the level of premium which should be allowed).

Howard Colman who conducted the case for the Claimants said: “My clients are delighted that the Court of Appeal has accepted their arguments and re-instated the full premium in this particular case.

"They also welcome the guidance given by this judgment which should hopefully bring an end to the large number of challenges to recoverability of ATE premiums generally.

"In essence, the Court has accepted that if a solicitor reasonably in selecting a reputable ATE insurer for his clients generally, that will usually be sufficient to enable recovery of the premium charged”.