Stepped ATE premium

Rogers v Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134

The court considered the stepped after-the-event (ATE) premium model offered by the DAS 80e policy. The court allowed the premium in full, even though it was twice the amount of the damages in a simple tripping claim. There was no objection to staged premiums in principle. The evidence showed that it was necessary for solicitors to sign up to provide products from particular insurers. DAS imposed such an obligation. The solicitor explained why he chose DAS as a provider, and his reasons were legitimate. Although the premium appeared disproportionate to the damages, the Lownds v Home Office [2002] 4 All ER 775 (CA) test of necessity was to be applied. Given the need for the solicitor to subscribe to DAS in all of his cases, it was therefore necessary to incur the premium in the present claim. Therefore it was not in fact disproportionate. ‘Necessity … may be demonstrated by the application of strategic considerations which travel beyond the dictates of the particular case. Thus it may include the unavoidable characteristics of the market in insurance of this kind. It does so because this very market is integral to the means of providing access to justice in civil disputes in what may be called the post-legal aid world.’ It was wrong to consider proportionality only with reference to size of the damages. The court had to take ‘all the circumstances’ into account (CPR rule 44.5(1)), and this included the risk to which the insurer was exposed. Here the costs exposure of about £6,500 justified the premium claimed in any event, even though the damages claimed did not exceed half this amount.