After–the-event insurance premiums are not recoverable with the costs of an appeal, the Supreme Court has held.
McGraddie v McGraddie [2015] UKSC 1 concerned a property dispute between a father, who took out £40,000 ATE insurance against a potential maximum liability of £100,000, and a son who relied on legal aid. The father won and sought to recover his costs. However, the Scottish Legal Aid Board (SLAB) argued that the £40,000 ATE premium was not recoverable since, as “a matter of principle, the ATE premium is not properly an item of expenses”.
Lord Neuberger said that while there was no “good policy reason” to refuse the father recovery of the premium, it seemed “unlikely” that “the rules would have envisaged that a losing party’s liability for a substantial sum should depend on the successful party’s appetite for, and financial ability to take, the risk of losing and paying costs”.
Awarding the father his expenses but “with regret” not the ATE premium, he said that the position “seems to be the same” in Scotland and England.
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