Costs Barrister John Meehan recently represented the successful appellant in an appeal against the disallowance of Stage 3 of an ATE premium.

On appeal, the claimant was awarded Stage 3 of the ATE premium, the costs of the appeal and the costs of the detailed assessment.

The costs appeal arose following an order made at a detailed assessment that disallowed Stage 3 of a large ATE premium.

During the detailed assessment proceedings, the defendant argued that the claimant had failed to provide the required notice of the ATE premium prior to proceedings being issued. Accordingly, the defendant contended that Stage 2 of the ATE premium should be disallowed. Prior to the detailed assessment hearing taking place, the claimant made an unsuccessful application for relief from sanctions.

At the detailed assessment hearing, the District Judge disallowed the entirety of the ATE premium, finding that, when seeking relief from sanctions, the application notice had not specified that relief was sought only in respect of one stage of the premium. Therefore, by refusing relief from sanctions at the application hearing, the District Judge had effectively disallowed the ATE premium as a whole.

On appeal, John successfully argued that the District Judge had misdirected herself. The correct question was not whether the application notice could be interpreted to include a request for relief in respect of all stages of the ATE premium. Rather, the correct legal question was, what was the breach and what was the sanction for that breach.

Had the District Judge asked the correct legal question, she would have determined that the sanction that applied was limited to Stage 2 of the premium and therefore the refusal to grant relief from sanctions at the earlier application hearing could only have applied to Stage 2 of the ATE premium.

This costs case concerned the application of CPR 44.3B of the funding rules as they apply to pre-commencement funding arrangements.

John Meehan is a Civil Litigation and Costs Barrister at Kenworthy's Chambers. He will be discussing the importance of getting your budgets right speaking at a webinar for Recovery First Limited. The webinar takes place on 30 November at noon, and you can register here.