ATE insurers seek clarity in reform
After-the-event (ATE) insurers have called for a seat in the negotiations over the new RTA claims process, amid fears that the question of when solicitors can take out insurance is back on the table.
The Legal Expenses Insurance Group (LEIG), which represents seven insurers, has written to the MoJ to clarify whether the issue is live or not, and if it is, that ATE insurers will have their say.
In its original consultation, the MoJ proposed that ATE premiums should be recoverable only if liability is denied or no admission is made. After consultation it dropped the proposal and told ATE insurers that they did not need to be represented in negotiations.
Even though negotiations aren’t currently live, liability insurers seem determined to revisit the issue, and have threatened to pursue it to the European courts if necessary.
LEIG director Tony Baker argued that ATE initially covers risks such as a failure to agree quantum or causation even if liability is admitted. The MoJ’s proposal would have a ‘dramatic effect’ on the ATE market because it would lead to insurers only covering cases that by definition would be risky.
An underlying principle of the introduction of conditional fee agreements backed by ATE was that ‘the many pay for the few,’ allowing solicitors and insurers to make enough money from the winning cases to cover the minority of cases that are lost.