Kerry Underwood

ATE: RECOVERABLE PREMIUM REDUCED BY 90%

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In Nicolaou v Cass Liverpool County Court, 1 November 2017, Case number BO4L V651

the District Judge disallowed recovery of a large part of an After the Event insurance premium as there was insufficient evidence to support the claim.

This was a clinical negligence matter that settled for £250,000.00.

The defendant paying party challenged the reasonableness of the After the Event insurance premium of £53,145.00, including a stage two premium of £48,195.00, and sought to rely on less expensive comparator policies while the claimant sought to justify the choice of policy, whilst seeking to resist giving details of how the premium was calculated.

The claimant’s solicitors erroneously stated that it was a block-rated policy with a fixed second stage premium and erroneously stated that the second stage premium was £48,195.00, when in fact it was £27,170.00.

The policy was an ARAG one and the defendant stated that in a number of similar cases ARAG had sought to put before the court different and inconsistent statements as to how the second stage premium was calculated.

The paying party also submitted that there was a breach of the indemnity principle in that the failure to provide proper documentation to the claimant meant that she was not liable to pay at the stage 2 premium and therefore the paying party did not have to indemnify her for a non-existent contractual liability.

The court held that even in the absence of the correct documentation being supplied to the claimant, she was liable to pay the premium and therefore the indemnity principle argument failed.

The court also held that the mere provision of comparator policies without more detail of an expert underwriting nature on the unreasonableness of the index policy, either as to terms or cost, was insufficient to justify a finding of unreasonableness in taking out that particular policy.

However, for reasons set out in paragraph 41 of the judgment, the court disallowed the whole of the stage 2 premium and allowed recoverability of just £4,950.00, holding that without needing to consider reasonableness or proportionality, the stage 2 claim failed for lack of quantifiability.

 

“41.     However, after careful consideration of the evidence before me and the submissions made at the hearing, I have concluded that the Claimant has not proved to my satisfaction and on the balance of probabilities any quantifiable level of that premium, for these reasons:-

 

(i)           the initial stage 2 premium claimed had every appearance of being genuinely and correctly calculated by ARAG and, but for my agreement to adjourn for further evidence, might well have been held as part of the assessed costs payable to the Claimant in these proceedings;

(ii)          it is only as a result of happy chance that, consequent upon my decision on the last occasion, Mr Dyer came to reconsider the figure and reached his conclusion as to the “typographical error”, with the consequential considerable reduction in the figure claimed;

(iii)         in those circumstances, in my view the court is entitled, in this matter at least, to entertain doubts as to the reliability of prima facie assertions of evidence and to expect a comprehensive approach to proving what might otherwise have been relatively straightforward matters of fact;

(iv)         as such, in that the evidence of Mr Dyer does little more than point out the error and apparently correct it, without supplying the court with any cogent, persuasive and thus apparently reliable basis upon which to accept not only the existence of the initial error but also the accuracy of the consequential correction, such that the Claimant is forced to resort to matters of theory alone as exemplified upon Issue 1 [12], I remain unpersuaded in support of a claim for a significant individual lump sum in excess of £27,000, set against this particular background of error and confusion, that the figure sought in substitution for that documented at [26] can be safely accepted as accurate on balance.”

 

 

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Written by kerryunderwood

May 4, 2018 at 8:29 am

Posted in Uncategorized

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