A costs judge has rejected a defendant’s attempt to deprive a clinical negligence claimant of their £10,000 insurance premium.

Claimant firm Irwin Mitchell had sought to recover the after-the-event (ATE) insurance premium after settling a negligence case for £200,000 in May 2016.

But the defendant in Mitchell v Gilling-Smith challenged on the basis of ‘very real doubt’ that the premium was reasonably incurred for expert evidence in a relatively uncomplicated case.

Master Leonard, sitting in the Senior Courts Cost Office, said the argument relied on the hindsight of knowing what a claim would entail and how long it would last. This was at a time when the defendant’s response was an unknown quantity. The judge said the overall cost of cover was not limited to the cost of expert evidence and there was nothing to substantiate the policy was excessive.

‘The proposition, that it is incumbent upon a claimant to refrain from taking out ATE insurance until some undefined point at which the level of risk has become entirely clear, seems to me to rather miss the point of taking out insurance at all,’ said Leonard.

‘There is really nothing to support the proposition that the claimant’s solicitors must (or at least should) have known that the cost of the expert evidence covered by the recoverable part of her ATE premium would have been in the region of £2,000. On the contrary, if they had made that assumption they would probably have been wrong.’

The policy itself provided cover, to a limit of £100,000, for medical experts’ reports, other disbursements and opponents’ legal costs. The recovered premium for expert reports was £10,000.

The claimant had taken out a policy designed specifically for Irwin Mitchell to provide sufficient cover for all clinical negligence claims in respect of all risks. The policy was described as ‘block-rated’ as premiums were calculated by reference to the claims cost of the overall portfolio, adjusted by reference to the value of the claim itself.

The defendant challenged Irwin Mitchell at June’s hearing to state whether there was any financial benefit to the firm from selling or recommending the policy, but Leonard said this was beside the point and he declined to make any such assumption.

The judge said he had not been given any good reason to disallow the ATE insurance, as had happened in cases cited by the defendant. The challenge failed and recovery was allowed in full.