English and Welsh Courts - Miscellaneous

IN THE LEEDS COUNTY COURT

		The Court House Oxford Row Leeds LS1 3BG
		28 November 2013

Judge Behrens :

1 Introduction

1. These proceedings arise out of an accident on 26^th May 2011. Mr Evans was a bus driver employed by Arriva Yorkshire Ltd ("Arriva"). On 26^th May 2011 he injured his back whilst driving a bus in the course of his employment. The accident was caused by a defect in the suspension.
2. Mr Evans was a member of the Unite Trade Union and brought proceedings against Arriva with the benefit of legal funding provided by Unite. In due course the matter was tried by HH Judge Belcher on 18^th July 2012. The claim succeeded. Judge Belcher awarded Mr Evans £2,250 by way of damages, £12,745.51 costs (the agreed costs of the action including uplift and VAT but excluding the Access to Justice Self Insurance Premium of £3,500).
3. Judge Belcher initially reserved to herself the determination of whether Mr Evans was entitled to the £3,500 or any sum in respect of the Self Insurance Premium with a time estimate of 30 minutes. No directions were given about the filing of evidence although each side has filed some evidence. Initially Judge Belcher limited the skeleton arguments to 2 pages but she relaxed that rule when it became apparent that Mr Turner had already filed a 14 page argument. She also released the application from her list and extended the time estimate to 4 hours.
4. In the result I had the advantage of detailed skeleton arguments from each side. The matter was argued before me for about 5 hours on 28^th October 2011 whereupon I reserved judgment.
5. It will, of course, be necessary to set out the relevant statutory provisions and the authorities on the assessment of ATE premiums. In summary, however, Mr Turner contends the claim should be assessed at nil. There are 3 grounds for this contention. First there is no evidence that Unite made any provision against the risk of having to meet the costs of Arriva. In those circumstances there is no statutory basis for any award. Second, there is a doubt as to whether Mr Evans had the benefit of BTE insurance in respect of the claim. As this is a standard assessment that doubt should be resolved in favour of Arriva. In those circumstances it should be held that it was unreasonable for Mr Evans to take advantage of the legal funding offered by Unite. Third the evidence adduced by Mr Evans/Unite in this application is insufficient to enable the Court to form any view as to the appropriate sum to be awarded. It should accordingly be assessed at nil. As a fall back Mr Turner suggests that the sum of £3,500 is too high in that it fails to take account of a number of differences between the Self Insurance Premium and a commercial ATE Premium. He also raised an argument based on retrospectivity.
6. Mr Bare rejects all of these arguments. He submits that there is no basis for assessing the Self Insurance Premium at nil. There is no obligation on Unite to set aside specific sums or reserves in relation to Arriva's costs. It is also quite unrealistic to have expected Mr Evans not to rely on the legal funding provided by Unite. The evidence of Mr Usher is sufficient to establish the reasonableness of the Self Insurance Premium claimed. He denied that the amount claimed had been fixed retrospectively.

2 History of Claim

7. As already noted the accident happened on 26^th May 2011. On 17^th June 2011 Unite notified Morrish LLP of the claim. On 21^st June 2011 Morrish LLP sent a letter of claim to Arriva.
8. An initial Form 251 was sent Arriva at about that time. It is not in the bundle but it is common ground that it did not refer to the Self Insurance Premium as a staged premium. Indeed it is common ground that at that time Unite sought recovery of the Self Insurance Premium as a single premium.
9. On or about 5^th September 2011 Morrish LLP notified Arriva of a change in policy with the result that in the future Unite would seek recovery of the Self Insurance Premium as a staged premium.
10. Accordingly on 12^th September 2011 Morrish LLP served a new Form 251 which informed Arriva that the matter was funded by a collective conditional fee agreement between Unite and Morrish LLP which provided for a success fee, that Unite had undertaken:

To indemnify the Claimant in respect of his legal representatives basic charges, disbursements and a percentage increase and to meet liabilities which the Claimant may incur to pay the costs of other parties

11. It also notified Arriva that the Self Insurance Premium to be recovered was a staged premium and (in the annex) informed Arriva that (in a non RTA injury case) there were 3 stage payments – (a) cases settled prior to issue, (b) on allocation to a track and (c) on and from the 60^th day prior to a fast track trial.
12. The proceedings were issued on 6^th January 2012. They were duly allocated to the fast track and, as already noted, tried by Judge Belcher on 18^th July 2012.
13. Following the hearing before Judge Belcher there was correspondence between the parties between 20^th July 2012 and 7^th February 2013. At that time Arriva's solicitors objected to the Self Insurance Premium on the ground that this was not an employment case and that Arriva was not properly notified of the claim for the Self Insurance Premium. Neither of these points has been pursued on behalf of Arriva.
14. The first time the points now taken on behalf of Arriva were formally canvassed was in Mr Turner's skeleton argument dated July 2013 which was served with the Defendant's solicitors' letter dated 28^th August 2013.

3 The evidence

15. The evidence before me comprised 3 witness statements from Mr Usher on behalf of Unite and one witness statement from Mr Proctor on behalf of Arriva. It was common ground that there was no material difference between Mr Usher's second and third witness statements with the result that it is only necessary to consider the first two witness statements.
16. Both in his skeleton argument and in the course of oral submissions Mr Bare as the senior partner of Morrish LLP attempted to give further evidence about the practice and assessment of claims such as this. Mr Turner objected to this. Whilst I have no reason to doubt the accuracy of what Mr Bare told me, I agree with Mr Turner that it is not fair on Arriva for evidence to be introduced in this way. Mr Turner was appearing without any instructing solicitor and thus was not in a position to take instructions. In those circumstances it seems to me that the fair course is to confine myself to the evidence contained in the witness statements.

Mr Usher's first statement

17. Mr Usher's first statement is dated 13^th March 2009. It is described as made pursuant to PD 32.5 relating to CPR 47.
18. Mr Usher was qualified as a solicitor in 1981. He has had conduct of a large number of personal injury claims as partner for Thomsons. After leaving Thomsons he was employed as legal officer for ASLEF, and then a consultant for Amicus. In 2007 Amicus merged with the TGWU to form Unite. He has been on the Civil Justice Council since 2006.
19. In his witness statement Mr Usher describes the Self Insurance Premium as "the additional amount". I shall continue to refer to it as the Self Insurance Premium. In paragraph 4 he describes how Unite assessed the Self Insurance Premium. It applies an amount based on the categories of Road Traffic Cases, Employer's liability Accident, Disease cases, Public Liability and Occupiers liability. This is the same categorisation as that used by the Law Society.
20. In paragraph 5 he refers to the statutory cap on the amount to be recovered and in paragraph 6 he refers to paragraph 11.11 of the Costs Practice Direction. Both of these will be considered later in this judgment.
21. In paragraph 7 he indicates that he undertook a review of the ATE market in 2006, 2007 and 2008 and has taken the views of other solicitors involved in this field of litigation on behalf of the TGWU and Amicus.
22. In paragraph 8 he states that he believes that Unite's rates are within the statutory cap. In paragraphs 9 to 13 he gives an indication of the authorities that he has taken into account. These includes the rates in a number of authorities including "Callery v Gray" and "Rogers v Merthyr Tydfil Council [2006] EWCA Civ 1134". He has also considered the rates provided by other ATE providers, other unions Self Insurance Premiums and the effect of development and experience.
23. In paragraph 14 he sets out the Self Insurance Premium for various classes of case. Of relevance is the Self Insurance Premium for fast track employer's liability claims which are assessed in the sum of £725.
24. Two points can be made about this statement. First the sum claimed is for a single payment and not for a staged payment such as is claimed in this case. Second whilst the statement sets out in detail the nature of Mr Usher's experience and his consultation it gives no indication of how the sum is calculated. It does not set out how Mr Usher assessed the risk; it does not give details of the comparables said to have been used by Mr Usher so that it can be seen how comparable they in fact are. It is thus quite impossible to know how it has been reached.

Mr Usher's second statement

25. Mr Usher's second statement is dated 3^rd October 2011. It is headed in the same way as the first statement. It is designed to deal with the position of staged premiums.
26. In paragraph 2 he sets out his experience much as in the first statement. In paragraph 4 he sets out the categories of claims as in the first statement. However he has added a sentence dealing with stage payments:

In addition there are stages applied, effectively giving a discount for the pre-allocation stage and an enhanced premium in fast track cases Employers liability Cases where the case settles or is determined within 60 days the trial date.

27. Paragraphs 5 and 6 are in identical terms to the first statement. In paragraphs 7 and 8 he confirms that he has taken part in reviews since 2006 and has considered commercial ATE products. He asserts that the Self Insurance Premium sought by Unite do not exceed any likely comparable premium.
28. In paragraph 9 he sets out the new rates approved from 5 September 2011 for Employers liability Claims:

for claims that settle before prior to allocation - £895

for fast track trials that settle after issue but before the 60^th day before trial - £2,500

for fast track trials that conclude after that date - £3,500.

29. Three points can be made about this statement. First the sums claimed represent a considerable increase on the figures claimed in the first statement. Even the pre allocation figure of £895 (which is said to represent a discount) is higher than the figure of £725 claimed as the Self Insurance Premium for the whole claim prior to 5^th September 2011. No doubt it is this sharp increase which has resulted in the challenge in this case.
30. Second Mr Usher gives far less detail about the consultations he has had in fixing the new rates than he did in respect of the old rates. He does not for example tell us whether he has compared the rates with other Unions. Nor does he mention which ATE insurers he has considered.
31. Third he gives no indication at all as to how he has arrived at any of the figures claimed. As in the first statement the second statement does not set out how Mr Usher assessed the risk; it does not give details of the comparables said to have been used by Mr Usher so that it can be seen how comparable the rates in fact are. It is thus quite impossible to know how the rates have been reached.

Mr Proctor's statement

32. Mr Proctor is a legal executive costs draftsman employed to deal with costs in personal injury litigation. He has exhibited three documents:

A list compiled from his employer's records of fast track single stage ATE's in Employer's Liability cases. The list contains some 58 cases in respect of policies entered into between 23^rd November 2010 and 22^nd October 2012. The highest premium is £940 +IPT. 36 of the 58 had a premium of less than £750 or less plus IPT. Of those 36, 26 had a premium of £600 or less plus IPT.

A statement from Bob Crow of the RMT Union dated 7^th December 2011. It appears from that statement that the Self Insurance Premium charged by the RMT in 2011 would have been £795. Mr Crow also gives some comparable figures. For Accident Line the comparable figure is £685/£1,935 depending on whether the claim is issued or not.

A statement from Graham Mcdermott of the GMB Union dated 9^th February 2010. The comparable figure for the GMB in 2010 would have been £750.

4 Section 30 of the Access to Justice Act 1999

33. Section 30 is central to the application. It provides:

(1)This section applies where a body of a prescribed description undertakes to meet (in accordance with arrangements satisfying prescribed conditions) liabilities which members of the body or other persons who are parties to proceedings may incur to pay the costs of other parties to the proceedings.

(2)If in any of the proceedings a costs order is made in favour of any of the members or other persons, the costs payable to him may, subject to subsection (3) and (in the case of court proceedings) to rules of court, include an additional amount in respect of any provision made by or on behalf of the body in connection with the proceedings against the risk of having to meet such liabilities.

(3)But the additional amount shall not exceed a sum determined in a prescribed manner; and there may, in particular, be prescribed as a manner of determination one which takes into account the likely cost to the member or other person of the premium of an insurance policy against the risk of incurring a liability to pay the costs of other parties to the proceedings.

34. A number of points need to be made about the section.
35. First there is no dispute that Unite is a "body of a prescribed prescription" within section 30(1).
36. Second the liabilities referred to in subsection (1) are "liabilities which members of the body or other persons who are parties to proceedings may incur to pay the costs of other parties to the proceedings". As already noted the undertaking by Unite set out in Section 2 above is more extensive than this in that it covers the legal representatives basic charges, disbursements and a percentage increase in addition to the Claimant's possible liability to pay the costs of the other parties.
37. Third section 30(3) when read with Regulation 5 of the Access to Justice (Membership Organisation) Regulations 2005 in effect provides a cap on the amount recoverable. Reg 5(1) provides that the Self Insurance Premium must not exceed a sum defined in Reg 5(2) as follows:

That sum is the likely cost to the member of the body or, as the case may be, the other person who is a party to the proceedings in which the costs order is made of the premium of an insurance policy against the risk of incurring a liability to pay the costs of other parties to the proceedings.

38. Thus a commercial premium is the cap on the amount recoverable. As will appear below Mr Turner submits that a commercial ATE premium invariably covers far more than the liability in section 30(1). Thus he submits that the Self Insurance Premium should be significantly less than a commercial premium.

Provision

39. In paragraph 12 of his skeleton argument Mr Turner submits that a union member wishing to recover the Self Insurance Premium on behalf of his union must demonstrate that (1) his Union made some provision against the risk of having to meet an opponent's costs and (2) the size of the provision made.
40. The starting point for this submission is the wording of section 30(2) which permits the Court to award an additional amount in respect of any provision made by or on behalf of the body…
41. He develops the submission in paragraphs 18 and 19:

18. A provision would necessarily take the form of a reserve or similar allowance against future potential adverse claims for costs. Insurers make such provisions against adverse claims risk all the time, and any union wishing to recover a notional premium as a quasi-insurer is required by Section 30 to demonstrate that it too has made such a provision.

19. In effect, by virtue of the operation of section 30(2) of the 1999 Act, evidence that such a provision has been made is a condition precedent to recovery of a notional premium. This is because the amount awarded can only be awarded 'in respect of' a provision made. Thus, if no provision has been made, no amount can be awarded.

42. He points out that the witness statement of Mr Usher does not deal with this aspect of section 30 at all. There is no evidence that Unite has made provision as required by the Act. This is an assessment on a standard basis and thus any doubt should be resolved in favour of the paying party. Thus no sum should be awarded.
43. There is no authority to support Mr Turner's argument and I cannot accept it. I can think of no practical reason why the union should be required (as a condition precedent to receiving the Self Insurance Premium) to set aside a reserve or similar allowance. In those circumstances I decline to construe section 30(2) in the manner suggested by Mr Turner. In my view the undertaking given by Unite is sufficient to satisfy section 30(2). The undertaking is, in my view, the provision that has been made by Unite.
44. It follows that I reject Mr Turner's argument.

5 Before The Event Insurance

45. Paragraphs 11.10 and 11.11 of the Costs Practice Direction (CPR Pt 44) provide

11.10 In deciding whether the cost of insurance cover is reasonable, relevant factors to be taken into account include:

(1) where the insurance cover is not purchased in support of a conditional fee agreement with a success fee, how its cost compares with the likely cost of funding the case with a conditional fee agreement with a success fee and supporting insurance cover;

(2) the level and extent of the cover provided;

(3) the availability of any pre-existing insurance cover;

(4) whether any part of the premium would be rebated in the event of early settlement;

(5) the amount of commission payable to the receiving party or his legal representatives or other agents.

11.11 Where the court is considering a provision made by a membership organisation, rule 44.3B(1)(b) provides that any such provision which exceeds the likely cost to the receiving party of the premium of an insurance policy against the risk of incurring a liability to pay the costs of other parties to the proceedings is not recoverable. In such circumstances the court will, when assessing the additional liability, have regard to the factors set out in paragraph 11.10 above, in addition to the factors set out in rule 44.5 .

46. Mr Bare and Mr Turner have taken very different positions with regard to BTE insurance. In paragraph 12(a) Mr Turner submits that before there can be any recovery of the Self Insurance Premium the union member must show that he did not have pre-existing insurance available to him. He elaborates this in paragraphs 15 and 16:
47. The chronology suggests that the Claimant opted to use union-funded solicitors without giving any consideration to the possibility that he could have funded his claim at nil cost via such before-the-event ("BTE") insurance as he may have possessed.
48. Unless the Claimant can demonstrate that reasonable enquiries into the availability of BTE insurance cover were made, the claim to recover a notional premium should be dismissed (per CPD 11.10(3)).
47. In answer to this Mr Bare submits there is no requirement, and never has been, for a Trade Union funded Claimant to indulge in a search for before the event insurance (BTE cover). He submits that it has always been a professional obligation of a solicitor to search for Union funding under the Solicitors Cost Information and Client Care Code 1999. (See paragraph J(iv) repeated even as recently as the re-drafting of the Solicitors Regulation Authority Code of Conduct 2011 at Indicative Behaviour 1.16). He referred me to a decision of Judge Grenfell in Peel v Beasley (Leeds County Court 3/12/2007)
48. Paragraph 1.16 in fact provides as follows:

Discussing how the client will pay, including whether public funding may be available, whether the client has insurance that might cover the fees, and whether the fees may be paid by someone else such as a trade union.

49. Thus although, as Mr Bare points out, there is an obligation to discuss Union funding, there is also a similar obligation in respect of BTE insurance.
50. Peel v Beesly was a costs appeal in respect of a low value road traffic case. A secondary issue arose as to whether it was reasonable for the Claimant to obtain funding through the Union could have had BTE cover under her motor policy. The amount claimed for the Self Insurance Premium was only £325. The issue is dealt with in paragraphs 60 to 71. It seems clear that there was BTE insurance but the Claimant chose to avail herself of Union funding.
51. In paragraph 71 Judge Grenfell recorded a submission by Mr Bare that the use of union funding is generally advantageous to a Claimant. In paragraph 71 Judge Grenfell said:

It was, in short, entirely reasonable to take that course. I would find it difficult to envisage any circumstances where a Union member would be regarded as unreasonable to have gone to the Union. Just because it is cheaper to the paying party does not make it the only choice.

52. As Mr Bare points out Judge Grenfell was a very experienced judge and on that occasion he had the assistance of the Regional Costs Judge and an experienced solicitor.
53. However paragraph 11.10(3) of the CPD does require the court to consider the availability of any pre-existing insurance cover in determining whether the ATE premium is reasonable. Under paragraph 11.11 this is a factor the Court must take into account in assessing the Self Insurance Premium.
54. In this case there is no evidence as to whether there was BTE insurance or not. To my mind this does not mean that the claim must fail. There is nothing in the rules which requires the Claimant's solicitor to enquire about BTE insurance before proceeding. It is not a condition precedent to the recovery of the Self Insurance Premium. This is not a Road Traffic Accident and there is no evidence of the availability of BTE insurance in Employer's Liability cases. Even if there is BTE insurance available it is clear from Judge Grenfell's judgment that the paying party will have a very uphill struggle to establish that the union member was unreasonable in taking advantage of the Union funding.
55. In the circumstances I reject Mr Turner's submission that the claim must fail. It would no doubt be possible for me to adjourn this case in order for the parties to provide more evidence on whether there was in fact BTE insurance, its terms and the advantages to a union member in relying on union funding in preference. On balance however it seems to me that, in a case such as this, the weight to be attached to this factor under CPD 11.11 is so small that it would not be proportionate to put the parties to the expense of providing the additional evidence.

6 The value of the Self Insurance Premium

Authorities

56. There are no authorities on the valuation of the Self Insurance Premium. However there is a considerable body of law in which the valuation/reasonableness of the ATE premium has been considered.
57. There is a very helpful review of the authorities in the very recent decision of Senior Costs Judge Hurst in Kelly v Black Horse LLP [Case PTH 1300060 judgment handed down 27^th September 2013]. The cases considered by the judge include Rogers v Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134, Judge Hurst's own decision in Motto & Ors v Trafigura [2011] EWHC 90207 (Costs) and the Court of Appeal decision in the same case [2011] EWCA Civ 1150, and Redwing Construction Ltd v Wishart [2011] EWHC 19 (TCC) Akenhead J. Much of the following is taken from Judge Hurst's decision.
58. The leading case is, of course, the Court of Appeal decision in Rogers. In his decision Judge Hurst cites extensively from that case including paragraphs 109 and 110 where the Court said that it was impossible to say that a total premium of £4,680 was unreasonable:

Put quite simply, if in two cases insurers face a 50% risk of having to pay out £6,500 on one of them, it is reasonable for them to charge a premium of £6,500 (not allowing for overheads or profit) on each. On the one they win, they will be able to get their premium paid by the defendant, and this will recompense for them having to pay out £6,500 on the one they lose.

59. He also set out paragraphs 116 and 117 where the Court gave guidance for the future:

116. During the course of argument it was accepted on all sides that a party who has an ATE insurance policy incorporating two or more staged premiums should inform its opponent that the policy is staged, and should set out accurately the trigger moments at which the second or later stages will be reached. This obligation should be undertaken in addition to the obligations set out in CPR 44.15(1) and in paras 19.1(1) and 19.4 of the Costs Practice Direction. If this is done, the opponent has been given fair notice of the staging, and unless there are features of the case that are out of the ordinary, his liability to pay at the second or third stage a higher premium than he would have had to pay if the claim had been settled at the first stage should not prove to be a contentious issue.

Evidence justifying the ATE premium claimed

117. If an issue arises about the size of a second or third stage premium, it will ordinarily be sufficient for a claimant's solicitor to write a brief note for the purposes of the costs assessment explaining how he came to choose the particular ATE product for his client, and the basis on which the premium is rated – whether block rated or individually rated. District judges and costs judges do not, as Lord Hoffmann observed in Callery v Gray (Nos 1 and 2) [2002] UKHL 28 at [44]; [2002] 1 WLR 2000, have the expertise to judge the reasonableness of a premium except in very broad brush terms, and the viability of the ATE market will be imperilled if they regard themselves (without the assistance of expert evidence) as better qualified than the underwriter to rate the financial risk the insurer faces. Although the claimant very often does not have to pay the premium himself, this does not mean that there are no competitive or other pressures at all in the market. As the evidence before this court shows, it is not in an insurer's interest to fix a premium at a level which will attract frequent challenges."

60. The next significant case is Redwing. I can take the summary from Judge Hurst's judgment. In that case the claimant entered into an ATE insurance policy, with a total sum insured of £20,000, £15,000 relating to opponents' costs and £5,000 to own disbursements. The ATE premium was £8,480. At paragraphs 11 to 14 of the judgment, Mr Justice Akenhead reviewed the law and authorities, he stated:

"15. One can draw all this together:

(a) In relation to CFAs and ATE Insurance, the basic costs rules and practice about reasonableness and proportionality apply. Thus, to the extent that the mark-up or uplift under the CFA or the premium for the ATE Insurance is unreasonable or disproportionate, it should be disallowed, at least on a standard assessment.

(b) A CFA percentage increase will not be reduced simply on the ground that, when added to base costs which are reasonable and (where relevant proportionate), the total appears disproportionate.

(c) A primary factor in considering the reasonableness of the percentage increase must be the prospects of the claimant succeeding on its claim. This is to be judged primarily as at the date that the CFA is entered into. The greater the prospects of success, the lower the reasonable and proportionate percentage will be. It is difficult to be prescriptive about this however and there is no magic sliding scale. Where the chances of success, judged objectively at the time when the CFA is entered into, are about even or less, the greater the justification will be for a 100% mark-up. Where the chances of success are great, there will almost invariably be a strong feeling that the CFA mark-up should be significantly discounted. Where the claimant was as good as bound to win, no mark-up may be allowed.

(d) Similar considerations apply to the ATE Insurance. It must be a reasonable presumption that premiums are linked to an assessment of risks and the prospects of success in the litigation. The premium which can be allowed on a costs assessment can be adjusted downwards to reflect the fact that at the time when the insurance was entered into the prospects of success were good or high.

61. Akenhead J went on to state that as Redwing was likely to be a substantial winner a premium of £8,480 for cover of £20,000 appeared excessive. He only ordered the paying party to pay 20% of the premium. He expressed his conclusion thus:

In the absence of any evidence from the Claimant as to the reasonableness of the premium but without deciding that as such the premium is itself unreasonable, I have formed the view that it would only be reasonable to make Mr Wishart pay 20% of the premium. I must and do presume that a wholly unrealistic assessment of risk was made to justify the imposition of a premium of some 42% of the insured amount. I have a very real doubt that anything more is reasonable."

62. In the Kelly case Judge Hurst only ordered the paying party to pay 25% of the premium claimed of £15,000. He inferred that the ATE insurers were given inaccurate information to rate the policy

Assessment of the Premium

63. In Motto there was evidence as to how the ATE premium was calculated:

•     an exposure multiplicand is calculated, being the sum of own disbursements and opponent's costs (subject to any limit of indemnity on the former);

•     a risk multiplier is applied to the exposure multiplicand;

•     a basic risk multiplier is ascertained in the same way as a success fee is ascertained, namely by dividing the chance of losing by the chance of winning;

•     this basic figure therefore represents the pure "burning cost" of the insurance (that is the "break even" cost disregarding the need for the underwriter to fund its business overheads and make a profit);

•     the basic figure is then adjusted to include an allowance for overheads, marketing and brokerage costs and profit;

•     this provides the overall risk multiplier;

•     the overall risk multiplier is applied to the exposure multiplicand, to derive the net premium;

•     insurance premium tax is then applied to produce the overall figure.

64. The assessment of the "burning cost" in cases such as those in the above authorities depends on a risk assessment of the individual case. This case was a fast track trial where all similar types of cases are bulk rated. In such a case the burning cost would be calculated differently.
65. The exposure multiplicand would be the average exposure of Unite in respect of cases of that type. Furthermore as the Self Insurance Premium is limited to the costs of the other party it would not include disbursements such as the costs of medical reports.
66. The basic risk multiplier is obtained by dividing the average chance of losing by the average chance of winning cases of that sort. The basic figure would be obtained by multiplying the exposure multiplicand by the multiplier
67. The basic figure would need adjustment to take into account overheads. In the case of the Self Insurance Premium there would be no adjustment for commission, marketing or profit. As Mr Turner pointed out there is no intention to enable Unite to make a profit out of the Self Insurance Premium.
68. The Self Insurance Premium would be the basic figure as adjusted.
69. It is self evident that I do not have any material upon which to carry out an assessment on the above basis. As already noted all I have is figures supplied by Mr Usher without any underlying reasoning.
70. Mr Bare suggests that I should accept Mr Usher's evidence without more. He points out that the sums claimed are less than the figures in Rogers. He referred me to paragraph 117 of Rogers set out above.
71. I cannot accept that submission. Simply to accept Mr Usher's figures would in my view be abrogating the task of assessing the reasonableness of the Self Insurance Premium. In any event the evidence of Mr Usher does not comply with paragraph 117. Mr Usher did not choose an ATE product and does not indicate with which ATE product he has placed reliance to arrive at his figure of £3,500. In every case where there has been a challenge to the ATE premium appropriate figures have been provided to enable the Court to form an assessment of the reasonableness.
72. Mr Turner submitted that I should assess the Self Insurance Premium at nil as I do not have the material on which to assess it. To my mind that would not be fair. It may turn out that the premium charged is in fact reasonable. The appropriate course is to adjourn the application to enable Unite to provide the appropriate evidence in order to enable the Court to assess the reasonableness of the Self Insurance Premium in accordance with this judgment. As Mr Turner pointed out evidence is needed of

the average exposure of Unite in fast track employers liability cases (i.e. the average of the costs that are paid out)

the average success rate of Unite

an estimate of the cost of overheads involved in relation to an individual employer liability fast track case.

73. At the handing down of the judgment I shall give directions in relation to this.

7 Retrospectivity

74. The argument based on retrospectivity is predicated by the assumption that if the Claimant had been privately paying it is likely that he would have taken out an ATE at the time he consulted his solicitors. That date was well before 5^th September 2011 when Unite changed their method of calculating the Self Insurance Premium. It would be wrong (so the argument goes) to permit Unite to rely on a method calculated on a basis not in force when the notional ATE would have been taken out.
75. This is an ingenious argument but I cannot accept it. As Mr Bare points out it does not follow that the ATE would have been taken out before September 2011. It is not without significance that proceedings were not commenced until January 2012. In such a case there is nothing retrospective about claiming the Self Insurance Premium on a basis that came into force 4 months before proceedings were issued. The issue for the Court is whether that rate is reasonable in the light of the risks undertaken by Unite in fast track employer liability cases and the exposure for costs where they lose such cases.