After-the-event premium

Kelly and another v Black Horse Ltd [2013] EWHC B17 (Costs), Master Hurst. PI Costing 23 October

After the receiving party recovered damages and costs, the main issue remaining involved the extent of the after-the-event (ATE) premium sought. The master held that the ATE premium sought was wholly disproportionate. Carrying out various calculations using the “burn” premium (the risk of paying out (found by Master Hurst to be 35%), multiplied by the exposure – plus an increase of 25% for brokerage and profit), Master Hurst stated: “In my judgment it is reasonable to expect the defendant to pay 25% of the premium claimed of £15,000. This produced a figure of £3,750, which compares favourably with the £3,677 which I calculated using the formula.”