Rogers v Merthyr Tydfil County Borough Council

On a second appeal concerning an after-the-event insurance premium, the Court of Appeal directed that the matter proceed as a test case because of the wider public interest, while protecting the respondent against disproportionate costs. The appeal was to proceed by way of rehearing, with permission to adduce further evidence and written submissions from interveners. The court did not decide whether the premium was reasonable, proportionate or recoverable. Nor did it determine the wider questions concerning staged premiums, alternative products, underwriting evidence or market material in costs assessments.

The claimant succeeded on liability in a claim arising from an accident in a local-authority play area. Damages were agreed at £3,105. The deputy district judge summarily assessed costs at £16,821.30, including an after-the-event insurance premium of £5,103 and a 100 per cent success fee.

On the defendant’s appeal, HHJ Graham Jones, sitting as a deputy circuit judge, reduced the costs to £12,628.30 including VAT and reduced the insurance premium to £900. The insurers sought a second appeal, wishing to adduce evidence about premium-setting and to raise wider issues affecting the after-the-event insurance market. The central procedural issue was whether the appeal should proceed as a test case and, if so, on what terms.

1. Permission and form of appeal. The application to rely on Mr Bellamy’s further evidence was granted. The second appeal was permitted to proceed as a test case because of its public importance and the desirability of an early appellate determination of the wider issues. The appeal was to be by way of rehearing, rather than review.
2. Scope and fairness. The respondent’s interest was confined principally to the premium payable in the individual case, whereas the insurers sought a wider examination of after-the-event insurance. It was fair to permit the additional evidence and interventions, particularly because the evidence now proposed had not been placed before the lower appellate judge. The substantive questions identified in the skeleton argument remained for later determination.
3. Costs protection. The orders for costs in the courts below were to stand in any event. Each side was to bear its own costs in the Court of Appeal, subject to the respondent’s liberty to apply for reasonable costs of preparing written submissions and evidence, capped at £20,000 if the appeal were dismissed. The order was later slightly varied following discussion after judgment.
4. Case management. Written submissions and interveners’ evidence were to be filed within the prescribed timetable. Master Hurst was directed to consider whether an enquiry or report would assist the court, the terms and timetable of any enquiry, and whether the proposed July hearing should be adjourned. Permission to intervene was granted in writing, with applications for oral intervention to be made separately.
5. Substantive issues left open. The court did not decide the proper approach to proportionality, the relevance of costs at risk or damages, the acceptability of staged premiums, the availability of alternative products, the evidential burden on an insurer, or the use of market material in assessing an insurance premium.

• Court of Appeal (Civil Division): The claimant appealed from HHJ Graham Jones, sitting as a deputy circuit judge on 23 November 2005, who had reduced the costs award on an appeal from Deputy District Judge Sandecott’s decision of 5 March 2005. The Court of Appeal granted permission for a second appeal to proceed by way of rehearing, allowed further evidence, authorised written interventions, and gave case-management and costs directions.