The premium on the Claimant’s After the Event Insurance policy was only payable at the end of the case.
The Defendant argued that it was not liable to pay the ATE Insurance premium because deferring payment of the premium was providing the Claimant with credit and the policy was therefore subject to the Consumer Credit Act 1974 ("the Act”). As the Act had not been complied with (no Consumer Credit Act agreement had been signed) the agreement was unenforceable and therefore the ATE Insurance premium was irrecoverable.
ATE insurance was an entirely new product and there was no established normal business practice. Payment of the premium only fell due at the end of the case. The After the Event insurance policy was still in force (i.e. the case was still not at an end, because the proceedings were not concluded until costs were assessed). A premium is not deferred unless the payment is not required for a significant period beyond the end of the case. The ATE Insurance policy was not therefore caught by the provisions of the Act and no consumer credit agreement was required. The After the Event Insurance premium was accordingly recoverable.
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