A recoverable premium for after the event insurance based on 20 per cent of damages awarded or agreed was likely to be unreasonable in all simple road accident cases in which the compensation payable exceeded about ?2,000. However, an agreement for such a premium was not champertous.Costs issue relating to the recovery of an after the event ('ATE') insurance premium in accordance with s.29 Access to Justice Act 1999. The claimant sustained personal injuries in a road traffic accident and accepted a sum of £13,000 paid into court on 3 January 2002, becoming entitled to her costs on the standard basis in accordance with CPR 36.13. An ATE insurance premium was claimed at £2,600, namely 20 per cent of the damages recovered. The limit of indemnity was £10,000. The issues were: (i) whether the premium was champertous; and (ii) whether the method of calculating the premium, and the premium itself, were reasonable.HELD: (1) The agreement for the insurance premium to be 20 per cent of any damages awarded was not champertous. There was no danger that the insurer might be tempted to act improperly (R v Secretary of State for Transport, ex parte Factortame & Ors (2002) EWCA Civ 932). The company made its profits from the insurance not from the litigation. It did not divide the spoils but relied upon the fruits of the litigation as a source from which the insured could satisfy her liability for the premium in return for the provision of a genuine service, namely the ATE insurance cover which was external to the litigation (per Lord Mustill in Giles v Thompson (1994) 1 AC 142). (2) It was open to an insurer to calculate and charge premiums on whatever basis best suited its business. The question was what amount ought reasonably to be payable by the paying party in accordance with s.29 of the 1999 Act. (3) A recoverable premium based on 20 per cent of damages awarded or agreed was inherently flawed. Such a premium was likely to be unreasonable in all simple road accident cases in which the compensation payable exceeded about £2,000. In such cases, ATE insurance with a greater limit of indemnity than was provided here was available for around £400 including insurance premium tax. (4) As the defendant had conceded that the appropriate premium should be no more than £350, that figure would be allowed plus insurance premium tax, making a total of £367.50Judgment accordingly.