Insurance has a strange aspect which we often overlook; we are happy that we did not need it.
We do not think that the premia paid year after year to insure our house is wasted money. After all, we do not want our house to burn down; we just want to rebuild and restore it if it does. So, we pay a small sum of money to meet the possibility of having to pay the much larger sum if the house does burn down (or suffer some other form of damage).
Sometimes the question of what is a proportionate sum to pay as a premium to cover the perceived risk has to be publicly determined.
In the UK, unlike Ireland, there is anxiety that justice should be facilitated. By “justice” is meant the ready and easy opportunity to go to court seeking a remedy without being prevented by extraneous causes, like poverty. Poverty is relative; most people in Ireland would consider the costs of a High Court action (or even a Circuit court action) beyond them.
Consequently, the UK authorities have facilitated schemes intended to achieve this end.
One such scheme is to allow lawyers who work on a “no win, no fee” basis to charge a significantly higher fee when they are successful, and provide that the losing party has to pay that higher fee as a matter of course.
Another is to recompense a plaintiff his or her insurance premium for “After The Event” (ATE) insurance. This is insurance taken out to, effectively, help pay for some of the litigation costs of the plaintiff/insured.
Section 29 of the UK Access to Justice Act 1999 provides:
“Where in any proceedings a costs order is made in favour of any party who has taken out an insurance policy against the risk of incurring a liability in those proceedings, the costs payable to him may, subject in the case of court proceedings to rules of court, include costs in respect of the premium of the policy.”
Inevitably, the losing defendants (other insurance companies) took issue with the premia being charged for the ATE.
HERE ‘s the outcome of that dispute.