Obtaining after-the-event (ATE) insurance is nearly impossible for claimants in judicial review proceedings, a public law charity said today, urging the government to extend costs protection to improve access to justice for those of modest means.
The Ministry of Justice is currently reviewing reforms to civil litigation funding under part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO). Recovery of ATE insurance premiums, except in relation to clinical negligence expert reports, was abolished under section 46 of the 2012 act and replaced with qualified one way costs shifting (QOCS).
QOCS applies only to personal injury claims. The ministry says parties can take out ATE insurance, paying the premium if the case is successful. However, responding to the LASPO review, Public Law Project insists after-the-event insurance has always been difficult to secure for judicial review claims. Not being able to recover premiums in the event of victory has made it 'almost impossible' to obtain ATE insurance in the majority of such claims.
In its submission to the review, PLP says it was advised by an insurer that ATE insurance for judicial review claims is 'rarely available' and only where the merits of the claim are clear. 'We were also advised that the minimum premium would be 35% of the cover required, even in a claim where the prospects of success were above 80%. For example, for cover of £250,000, the minimum premium would be £90,000, payable up front. Cover would normally be available after permission had been granted. For practical purposes, ATE insurance is therefore unavailable to almost all claimants in judicial review proceedings,' the charity says.
The ministry states that the overall aims of the costs and litigation funding reforms in LASPO were to reduce the costs of civil litigation and rebalance the costs liabilities between claimants and defendants while ensuring parties with a valid case can still bring or defend a claim. The department also wanted to encourage early settlement and discourage unmeritorious claims.
PLP says the case for extending QOCS to judicial review proceedings has increased since Lord Justice Jackson recommended it nearly a decade ago in his civil litigation costs review. As well as legal aid rules and eligibility criteria being tightened, the charity says payment for claimants' lawyers is no longer guaranteed until and unless permission is granted.
Some claimant’s lawyers are still recovering legal costs that are more than double the compensation their clients receive in clinical negligence cases, the Medical Defence Union (MDU) explained today as it called for further curbs to disproportionate costs.
In another response to the LASPO review, the Medical Defence Union calls for action to cut what it describes as 'disproportionate' claimant legal costs. 'We still see cases where the patient’s solicitor’s legal costs are far greater than the award their client receives. For example, in one case we paid £30,000 to compensate a patient whose solicitor’s costs were £52,000. In another case the compensation award was £20,000 and the bill of costs totalled £48,000.'
The MDU has responded to the review by calling for the continuing disproportion in the cost of after the event (ATE) insurance premiums for medical expert reports, which defendants still have to pay for, to be addressed. In one case the insurance was £13,000 and the compensation payment was £20,000. In many cases high premiums are offsetting any reduction in claims costs brought about by the LASPO reforms, the response states.