ATE – The introduction of Qualified One-Way Costs Shifting

Authored by DAS ATE Technical Supervisor Rebecca Squires

Since the introduction of QOCS and the subsequent change to ATE premiums being payable by the client, Solicitors have faced some challenges when the client is a minor. Judges have not always allowed for premiums to be deducted from damages at the Approval Hearing, but following a recent judgment, further clarity is now available.

At the initial hearing of X -v- H&M Hennes, the District Judge (DJ) did not allow for the ATE premium to be deducted from the client’s damages. However, HHJ Lethem overturned this decision on 21st April 2022.

In his judgment he noted that, providing the ATE premium had been reasonably incurred and agreed by the client (in this case the Litigation Friend) and following Herbert v HH Law, the amount of the ATE premium was not to be challenged, the DJ was incorrect to disallow the premium.

The judge noted that given the litigation friend approved the need for the policy and the amount of the premium, the court could assume the ATE policy was reasonably incurred. Therefore, when considering deducting the premium from the damages, the judge’s starting point should be that the ATE policy was reasonable and proportionate.

It does of course acknowledge that this is the starting point and that there may be factors in a case where it was not deemed reasonable, but it is not enough to just say “it was unreasonable to incur it”; they will need to explain the mitigating factors for that case.

We are pleased to see the courts make this matter clearer for everyone involved. In these situations, the solicitors, litigation friends and ATE providers are doing what they can to ensure the minor is able to make a claim, and this judgment should help support everyone involved, without there being any financial risk to the litigation friend.