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Recoverable Premiums and Proportionality - Nick McDonnell, Kain Knight Costs Lawyers

27/09/19. The 17 July 2019 saw the handing down of the combined, unanimous Court of Appeal judgment from The Master of the Rolls (Sir Terence Etherton) together with LJs Coulson and Irwin in West & Demouilpied v Stockport NHS Foundation NHS Trust [2019] EWCA Civ 1220. For some who regularly practice in legal costs it is the most important judgment of the last six years. West & Demouilpied (the latter pronounced ‘deh-moh-pee-yay’), on its face, is a decision about the reasonableness and proportionality in amount of Post 1 April 2013 (‘Post-April’) clinical negligence After The Event (ATE) insurance premiums, and in particular those premiums of market leader ARAG plc.

However, the Court of Appeal, in exploring the law and practice of such a premium’s proportionality, sought also, for the first time, to provide general guidance on the Post-April (‘new’) proportionality test on costs. Many believe the judgment provides practical texture to what was often considered an esoteric, legal concept that was impossible to apply consistently in practice in a principled manner, and where it was applied, it was believed to be done so arbitrarily. However, some very respected legal commentators not only believe the decision on proportionality generally provides little practical guidance and assistance but that it has, in fact, made the task of ensuring costs are proportionate significantly more difficult. But more on that later.

Whilst the general judicial commentary in West & Demouilpied on proportionality was where the judgment largely ended up, let us look at the original, core subject matter of the case which informs us how the Court reached their conclusions.

The Appeals

One of the main exceptions to the revocation of success fee and ATE premium recovery following the ‘Jackson Reforms’ allowed Claimants, bringing claims for damages following clinical negligence, to...

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