S.I. 2013/92: Reported for doubtful vires
and unexpected use of the enabling power
Recovery of Costs Insurance Premiums in Clinical
Negligence Proceedings Regulations 2013 (S.I. 2013/92)
1.1 The Committee draws the special attention
of both Houses to these Regulations on the ground that there appears
to be a doubt as to whether they are intra vires and that
(to the extent that the vires exist) they make an unexpected
use of the power under which they were made.
1.2 These Regulations are made under provisions
in section 58C of the Courts and Legal Services Act 1990, which
was inserted by section 46 of the Legal Aid, Sentencing and Punishment
of Offenders Act 2012. Section 58C, so far as material to this
report, reads as follows:
58C Recovery of insurance premiums by way
of costs
(1) A costs order made in favour of a party
to proceedings who has taken out a costs insurance policy may
not include provision requiring the payment of an amount in respect
of all or part of the premium of the policy, unless such provision
is permitted by regulations under subsection (2).
(2) The Lord Chancellor may by regulations
provide that a costs order may include provision requiring the
payment of such an amount where—
(a) the order is made in favour of a party
to clinical negligence proceedings of a prescribed description,
(b) the party has taken out a costs insurance
policy insuring against the risk of incurring a liability to pay
for one or more expert reports in respect of clinical negligence
in connection with the proceedings (or against that risk and other
risks),
(c) the policy is of a prescribed description,
(d) the policy states how much of the premium
relates to the liability to pay for an expert report or reports
in respect of clinical negligence ("the relevant part of
the premium"), and
(e) the amount is to be paid in respect of
the relevant part of the premium.
(3) Regulations under subsection (2) may include
provision about the amount that may be required to be paid by
the costs order, including provision that the amount must not
exceed a prescribed maximum amount.
(4) The regulations may prescribe a maximum
amount, in particular, by specifying—
(a) a percentage of the relevant part of the
premium;
(b) an amount calculated in a prescribed manner.
Regulation 2 of this instrument provides as follows:
(1) Subject to paragraph
(2), a costs order made in favour of a party to clinical negligence
proceedings may include provision requiring the payment of an
amount in respect of the relevant part of the premium of a costs
insurance policy taken out by that party which insures against
the risk of incurring liability to pay for one or more expert
reports in connection with the proceedings (or against that risk
and other risks).
(2) A costs order may not require the payment
of an amount in respect of the relevant part of the premium which
relates to the liability to pay for any expert report if—
(a) the report was not in the event obtained;
(b) the report did not relate to liability
or causation; or
(c) the cost of the report is not allowed
under the costs order.
1.3 Paragraph (1) provides precisely what section
58C(2) would allow if paragraph (a) of that subsection had not
contained the words "of a prescribed description" and
if paragraph (c) had not been included. The Committee asked the
Ministry of Justice to identify the descriptions of clinical negligence
proceedings and of policy to which the Regulations apply. In a
memorandum printed at the Appendix, the Department states the
Regulations apply, and are intended to apply, to all [descriptions
of] clinical negligence proceedings and to any [description of]
costs insurance policy.
1.4 This response assumes that the reference
to proceedings and policies of a prescribed description in the
Act are superfluous. Not only does this assumption appear to ignore
accepted principles of statutory interpretation, but it also conflicts
with the words of the Explanatory Notes to section 46 of the 2012
Act (see paragraph 297 of the Explanatory Notes to the Act): "The
effect of section 58C is to limit the recoverability of insurance
premiums to certain clinical negligence proceedings".
1.5 In the Committee's view, the wording of section
58C(2) at least arguably requires any regulations under that section
to relate only to specified descriptions of proceedings and policies.
Even if that view is found to be stricter than justified, the
wording of the Explanatory Notes appears to create a clear expectation
that coverage of the Regulations in respect of proceedings will
be less than comprehensive. The Committee accordingly reports
these Regulations for appearing to be of doubtful vires
and (to the extent that the vires exist) making an unexpected
use of the power under which they were made.
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