Judge: Irwin LJ and Coulson LJ
Citation:  EWCA Civ 1220
In assessing the proportionality of the recoverable part of a block rated ATE premium, the court must have regard to the specific matters set out in 44.3(5) and, if relevant, any wider circumstances under Rule 44.4(1). Irreducible or unavoidable costs should not be considered within the proportionality assessment. (See also the summaries in respect of recoverability of the ATE premium more generally, and the correct approach to assessment).
“ Such a premium cannot, in our judgement, then be assessed as disproportionate. Any attack on proportionality would be… based on the difference between the amount recovered and the amount of the recoverable element of the premium, when considered as part of the overall cost. There are two reasons why a discount for proportionality is inappropriate. Firstly, being a block rated premium, the amount of the reasonable premium bears no relationship to the value of the claim, much less the amount for which the claim was settled. Secondly, ATE insurance is critical to access to justice in clinical negligence claims, as was made clear by the Court of Appeal in Rogers and by the government, both in its formal response to Sir Rupert Jackson’s recommendations and in the explanatory memorandum accompanying the Regulations.”
“ We consider it is clear that, on the basis of these rules, questions of proportionality are to be considered by reference to the specific matters noted in 44.3(5) and, if relevant, any wider circumstances identified under Rule 44.4(1). Accordingly, the wider interpretation is correct. There are several reasons for that conclusion.
 First, Rule 44.4 is expressly signposted in Rule 44.3(2).
 Secondly, Rule 44.4(1) expressly states that it is dealing with assessments of both proportionality and reasonableness.
 Thirdly, Rule 44.3(5) is easily reconciled with the signposting in Rule 44.3(2) to Rule 44.4 on the basis that proportionality is sufficiently established by satisfaction of Rule 44.3(5), but failure to satisfy Rule 44.3(5) does not preclude establishing proportionality by reference to other circumstances under Rule 44.4.
 Fourthly, as [Counsel for the Respondent] accepted in an answer to a question from the Master of the Rolls during argument, his interpretation was to the effect that Rule 44.3(5) should be read as saying ‘Costs incurred are proportionate if and only if they bear a reasonable relationship to…’. Not only is that not what the rule says, but those words comprise the original formulation proposed by Sir Rupert Jackson, which was not adopted by the Civil Procedure Rule Committee.
 Finally in this context, it is clear that Rule 44.3(2)(a) was intended to give effect to the recommendation of Sir Rupert Jackson in his review that Lownds should be overturned by rule change.”
“ The exceptions of those items of cost which are fixed and unavoidable, or which have an irreducible minimum, without which the litigation could not have been progressed. Court fees are perhaps the best example.”
“We recognise that this means that when undertaking the proportionality exercise, it is those elements of costs which are not inevitable or which are not subject to an irreducible minimum which will be vulnerable to reduction on proportionality grounds in order that the final figure is proportionate. Such costs are, however, likely to be costs which have been incurred as a result of the exercise of judgement by the solicitor or counsel. Those are precisely the sorts of cost which the new rules as to proportionality were designed to control.”
 See Marcus Smith J in Malmsten v Bohinc  EWHC 1386 (Ch)