After event insurance (ATE) is an increasingly competitive market with numerous different products available.
When representing a client you can never underestimate the need for cover should your client not have the benefit of before the event cover. When acting it is crucial to ensure your client is indemnified against Defendants costs and disbursements should the matter fail.
Post LASPO (Legal Aid, Sentencing and Punishment of Offenders Act) newer competitive policies have become available on the market with reduced premiums and some with additional benefits, such as a Counsels advice for quantum (PI). Post LASPO the key change to after the event insurance is the premiums which are significantly less than pre April 2013 and in most instances are no longer subject to staged premiums.
From personal experience post LASPO, ATE providers appear more cautious when indemnifying claims. I would go as far to say I have seen insurance withdrawn on more cases in the last 16 months than I did in the five years pre LASPO. Often on cases that pre LASPO would have been indemnified. This trend appears to reflect the additional risks for funding providers.
Pre LASPO post issue premiums with some ATE premiums were in excess of £1,000 many now are fixed and some as little at £100, a significant difference. Taking into account the sheer change in premiums it is understandable why ATE providers appear less risk averse.
On failed claims it has become more apparent ATE providers will scrutinise the case and retrospectively seek to withdraw funding as opposed to paying out Defendants costs. This is of particular concern for practitioners.
From recent experience an ATE provider refused to pay out the Defendants costs post trial where a client unfortunately lost on liability at a trial following an RTA. The ATE funder had been regularly updated in the build up to trial sometimes more than once a week and indemnity was granted to trial. The client lost at trial and when seeking the Defendants costs the ATE provider stated the policy had been breached based on inconsistent evidence given at trial by the client. Having argued this point and highlighting the fact that the opposing barrister had given the client a real grilling so much so the client did not come across as a good witness. Could this have been avoided? Was it foreseeable? Probably not; it appears to be a case where the Judge simply preferred the evidence on the day of the Defendant. Within 24 hours of raising an objection the ATE provider paid the Defendants costs in full.
Perseverance can often be key. Do not simply accept a no, push matters as ATE providers will re-consider. You have a duty to act in your clients best interests and without funding your client will have to meet any adverse cost orders. This highlights the importance throughout the lifetime of a claim of regularly updating the ATE provider at every stage. Although this has always been a Solicitors requirement where funding is live it is more and more fundamental to ensuring no issues later arise. Also by updating the ATE provider and ending correspondence “we trust indemnity will remain” the burden switches to the ATE provider to come back to you should they no longer grant indemnity.
Another interesting point to be considered is what is best for our client in terms of acting Solicitors costs. As is pretty much standard most Solicitors charge up to 25% from the client damage towards legal fees, so with this in mind do we look for the cheapest ATE policy or the most suitable to our clients needs? This is a difficult point to consider as most clients are likely to want the cheapest say £100 whereas some depending on severity of injuries may be better off with a policy that also provides an advice on quantum (PI) which can be as little as an additional £40.00.
An ATE with advice provided appears a good product depending on the extent of the injury, a one size fits all approach is not suitable. One would expect competent fee earners handling claims to be in a position to value a claim accurately, therefore is it worth incurring the client the additional cost? Where the client has a fracture or more complex injury maybe the additional cost would be beneficial to obtain a second opinion thus to avoid any potential under settlement for your client, something Solicitors Professional Indemnity Insurers will likely favour.
One thing is for sure ATE premiums are increasingly competitive, however ATE providers will attempt to pull funding more often on cases where prospects are closer to the 51% threshold and ATE providers will scrutinise your case thoroughly. Therefore when acting you have to be fully familiar with the issues and ensure full disclosure to the ATE funder.