Taxpayers money wasted on ATE premium challenges

The NHS shouts about the cost of legal fees in clinical negligence cases but is silent over its invariably unsuccessful challenges against ATE premiums. Some costs fi rms appointed by the NHS Litigation Authority (NHSLA) routinely enrich themselves – at the taxpayer’s expense – by raising challenges that are invariably without merit and oft en repeat arguments that have been rejected by the courts on numerous previous occasions.


 As a leading provider of insurance cover for clinical negligence cases, ARAG deplores the expensive and time-wasting tactic on such challenges. Two recently concluded cases underline the point.
Axelrod v University Hospital of Leicester NHS was set to be a fairly straightforward claim with an early Part 36 off er to pay compensation of £3,000. Mr Axelrod sustained a leg fracture during a football match and underwent surgery during which screws were inserted to stabilise the fracture. Unfortunately one of these was too long, causing cartilage damage. Using an ARAG ATE policy to pursue his claim, he found the costs lawyers for the NHSLA challenging the recoverability of the premium on several grounds.

A Deputy District Judge initially disallowed the ATE premium, on the grounds that it did not insure the claimant against liability to pay for an expert report into liability or causation. It took an appeal to show that the policy did indeed cover such risks. The NHSLA costs solicitors then raised three further technical arguments about the wording and information contained in the ATE policy. Again, the court held that the premium was recoverable in full.
In another claim, where a Mr Hughes was a victim of assault that injured his ankle, a negligent procedure to later remove screws from his lower leg bones required further work to rectify the damage. It was nearly a year aft er the actual assault and emergency treatment at the defendant hospital that he was fully healed.

Liability was admitted and a Part 36 off er of £18.000 was accepted.
While the Axelrod saga caused the South Tees Hospital NHS Foundation to withdraw a similar issue over compliance, their solicitors wanted to look at reasonableness and proportionality of the premium - another familiar objection. The court was bound by established law to find that the ATE premium was reasonable and proportionate so it was allowed in full. There were inevitable costs to all this argument. A reassessment of costs led to an increase being awarded for the provisional hearing, bringing them to £2,525, and the oral hearing costs were agreed at a further £1,838.