Scott Dance v East Kent University Hospitals NHS Foundation Trust & Ors

A recoverable ATE premium in a qualifying clinical negligence claim forms part of the recoverable costs under CPR 44.1(1). It is therefore recoverable under an order for costs without express provision in that order, subject to the ordinary principles of costs assessment. This applies where costs are deemed to have been ordered following acceptance of a Part 36 offer. The No 2 Regulations establish the statutory criteria for recoverability; they do not impose an additional requirement for express judicial approval. A costs judge cannot rewrite the deemed order or use purposive interpretation to add words that the CPR does not contain.

The claimant brought a clinical negligence claim against the defendants and accepted the first defendant’s Part 36 offer on 23 July 2019. Costs were consequently deemed to have been ordered in his favour under CPR 44.9(1)(b). His bill included £5,266.01 for the recoverable element of an ATE insurance premium under regulation 3 of the Recovery of Costs Insurance Premiums in Clinical Negligence Proceedings (No 2) Regulations 2013.

The first defendant accepted that the premium met the regulation’s substantive criteria but argued that it was irrecoverable because the deemed costs order contained no express provision for it. The central issue was whether a recoverable ATE premium formed part of the “costs of the proceedings” following acceptance of a Part 36 offer.

1. The premium was allowed. The claimant’s acceptance of the Part 36 offer generated an entitlement to costs under CPR 36.13(1), and CPR 44.9(1)(b) deemed a costs order to have been made on the standard basis.
2. The court rejected the argument that regulation 3(1) of the No 2 Regulations required express provision in the costs order. Section 58C of the Courts and Legal Services Act 1990 and the regulations establish the circumstances in which ATE premiums may be recovered. They do not create a separate mechanism of judicial oversight additional to ordinary costs assessment.
3. The Court of Appeal’s decision in McMenemy v Peterborough and Stamford Hospitals NHS Trust [2017] EWCA Civ 1941 was binding. It established that, in clinical negligence cases within the No 2 Regulations, “costs” under the CPR includes a recoverable ATE premium. The conclusion was not limited to cases where the costs order expressly mentions the premium.
4. The wording of CPR 44.1(1), which defines costs by reference to what costs include, did not exclude recoverable ATE premiums. The statutory and procedural scheme would otherwise produce anomalous results in ordinary costs orders, Part 36 settlements, costs-only proceedings and detailed assessment.
5. The court distinguished the first defendant’s reliance on Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654. That decision concerned the different question whether a Tomlin order constituted an order for damages and interest for qualified one-way costs shifting. It did not decide that acceptance of a Part 36 offer could not generate an order for costs.
6. Any alternative purposive interpretation or correction of an alleged drafting error was unnecessary. In any event, the stringent conditions identified in Inco Europe Ltd v First Choice Distribution (A Firm) [2000] UKHL 15 were not met.
7. The premium was allowed as drawn. No challenge to its quantum was raised, and West v Stockport NHS Foundation Trust [2019] 1 WLR 6157 precluded such a challenge in the circumstances.