Future of CFAs, ATE insurance and costs transfer "at risk"
After-the-event (ATE) insurance could be at risk of abolition according to inferences made in Lord Justice Jackson’s report on civil litigation costs reform.
The report stated: “ATE insurance is a mechanism which can protect the litigant against liability for the other side’s costs. However, such insurance comes at a price, sometimes a very high price. It is then a matter for the cost shifting rules to determine upon which party that price should fall.
“Prior to April 2000, that price fell upon the insured party. Since April 2000, it has fallen upon opposing party. Of course, to the extent that cost shifting is abolished or, alternatively, one way cost shifting is introduced, then the need for ATE insurance abates.”
However, Jackson remains adamant the report is not a statement of conclusion for change, or indicator of a future solution on costs reform. He said: “The facts set out in the report have been gathered from many sources.
“They are not intended to support any particular conclusion. On the contrary, I hope to ascertain, with the assistance of the consultees, where those facts lead us.”