Rezek v Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (costs), Judgment 17 February 2017

In Rezek-Clarke v Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (Costs) Master Simons slashed the ATE premium and upheld his previous decision on a provisional assessment, where he reduced a bill seeking costs of £72,320.85 down to a “proportionate” £24,604.40, in a claim that settled for £3,250.

The claim arose from an allegation that the Defendant had delayed in referring the Claimant for imaging, resulting in a nine-month delay in discovering a pituitary tumor.

The Claimant instructed solicitors on 31 July 2013, following which a letter of claim was sent to the Defendant on 20 June 2014. In its letter of response, the insurer admitted breach of duty but denied causation.  Following an exchange of offers the case was settled on 8 July 2015.

The Claimant served its bill of costs on 29 October 2015 claiming £72,320.85 which included an ATE premium of £31,976.49 which was reduced to £2,120 following provisional assessment, and with the Master endorsing the bill                   “The premium is clearly disproportionate. Based on my own experience I will allow £2120 inclusive of IPT”.
With reductions to medical fees, expense rates, counsel’s fees and document time the bill overall was assessed in the sum of £24,604.40.

The Claimant requested an oral hearing and upon review Master Simons made modest upwards adjustments to medical fees, attendances upon the Claimant and document time.  By this stage the Claimant’s representatives had also conceded that the ATE premium had been incorrectly calculated and should in fact have been £22,255.23, although no explanation was provided for the error in the bill.

The Claimant maintained that the premium was proportionate and that one had to look at the CPR 44.5(3) factors, and the complexity of the claim.  Further, the premium was a block rated, and as such it was based on a basket of risks across several cases.  Relying on Rogers v Methyr Tydfil County Borough Council [2006] EWCA Civ 1134 the Claimant argued that if the premium was to be challenged, it was for the Defendant to produce expert evidence.

The Defendant disputed that any expert evidence was required to demonstrate that the premium was disproportionate.  It was not proportionate because it did not bear any relationship to the sums in issue in accordance with CPR 44.5(3). There was no non-monetary relief and the case was a modest medical negligence claim.  The Defendant did however produce evidence of comparative alternative policies.

In his judgment Master Simons distinguished Rogers, and stated he was applying a different test.  He said that Rogers was decided on a pre-LASPO premium, and although it had decided that where it was necessary to incur a premium it should be judged a proportionate expense, the definition of proportionality post 1 April 2013 was different.

He also commented on the block rated policy stating that whilst it was acceptable for insurers to calculate premiums based on a basket of cases, the amount that a paying party is liable for must be reasonable and proportionate.  No evidence was produced to indicate that the choice of policy was anything other than a mechanical exercise carried out by the fee earner.  It was clear from the outset that this was going to be a low value claim but no consideration was given to running it at proportionate cost.  He went on to question the methodology of the calculation and stated that it was clear that there were other products on the market.

In a detailed judgment, the Master accepted the Defendant’s submissions that the premium did not bear any relationship to the claim, which was not complex, but rather a routine low value medical negligence claim.  Proceedings had been issued not because of the complexity, but due to concerns about limitation.  He stated that he was entitled to disallow the entire premium on the basis that the Claimant’s representatives were unable to tell him what the actual ATE premium was, but decided against interfering with his decision at the provisional assessment, and allowed £2,120 inclusive of IPT.

No further reduction was made to the bill after applying the second-stage proportionality test.  The Master was satisfied that the reductions he had made during the first phase were sufficient to have reduced the bill to a proportionate sum.

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