Case success: Hill Dickinson reduce ATE premium

Stephanie Fraughan reports on a case in which Hill Dickinson successfully challenged the calculation of an ATE premium on assessment. The case of Neil Gander -v- TDG (UK) Ltd was held in Ipswich County Court before District Judge Mitchell. Hill Dickinson represented the defendant and managed to reduce the claimant’s original bill of costs considerably.    

The case concerned a relatively straightforward repetitive strain injury which was settled for the amount of £8,000 in damages. The original bill presented the claimant’s costs at £66,753.67, including the Unite ATE premium of £24,275.11. On behalf of the defendant we argued that this was too high and the premium was then reduced to £9,872.01. ATE premiums are calculated based on a variety of factors. In order to calculate the ‘exposure’ multiplicand (i.e. the entire costs/exposure risk faced by the union in the event of a loss) the claimant has to provide information to the ATE provider. The data the claimant provided to Unite was taken from the defendant’s entire costs budget to trial and the claimant’s approved budget of profit costs to trial.

The defendant argued that this was a manipulation of the Pursuit formula as it did not represent the true exposure risk of the Union. In order to calculate the risk multiplier (i.e. risk of losing/winning expressed in a percentage or a fraction) the claimant stated that the case had a 50/50 chance of success and applied a risk multiplier of 100%, relying upon the generic statement of the union dated 2011. The defendant argued that the statement provided did not sufficiently support the 50/50 calculation and that at least a full statement of reasons should have been provided by the claimant, as the success fee was automatically fixed at 100%.

The bill was first assessed on paper by provisional assessment where the claimant relied on Rogers -v- Merthyr Tydfil and the judge agreed with the claimant, allowing recovery of the premium in full. The defendant then requested a detailed assessment to readdress the issue of the premium, amongst other factors.

At the re-hearing, the judge agreed with the defendant’s argument on both points, ordering that the exposure multiplicand must be calculated in relation to the true exposure risk faced. This was calculated using the actual profit costs incurred by the parties and the defendant’s disbursements. He also adjusted the risk multiplier to 54%, assessing the risk at around 65% by way of reference to the ready reckoner. These alterations reduced the premium to £9,872.01. This was a huge reduction of £14,403.10 just for the amendment to the ATE premium. We also reduced the provisionally assessed bill by a further 24%. We achieved an overall saving of circa £44,000 against the overall costs claimed.

This is an excellent result. We successfully challenged the ATE premium, which is not easily achieved and slashed the costs claimed by two thirds. This result shows that premiums can and should still be challenged whenever possible and should never be accepted at face value.