When you lose a case you kiss goodbye to your legal costs under a CFA but your client is still responsible for your disbursements and, worse still, the other party's full legal costs. Was your client fully aware of this risk? Our examination of some client 'Rule 15' letters reveal that clients are often left in the dark about their risks if they were to lose their claim.
If you have failed to advise your client fully about the risks of going to court and offer them After the Event Insurance, then get your cheque book out and prepare to fill in a claim under your Professional Indemnity insurance policy (and as most claims come within the deductible/excess, in reality this means you pay). If have done the right thing and purchased an ATE Insurance policy for your client then the battle will now really begin!
We have heard many stories of firms struggling to deal with the aftermath of a lost case whereby their ATE Insurance Provider has called for and examined the solicitor's file in an attempt to 'avoid' paying. Many times we have been told by solicitors that, after a long battle with the ATE insurer, the insurer has pointed to 'catch all' policy terms to avoid paying claims. A classic is the term 'the claim must have 60% or more prospects of success'. Of course it is easy for an insurer to point to this clause after the claim has been lost and say - 'see - it can't have had sufficient prospects as a Judge has found against your client.' How do you fight that one? Well - with difficulty. We don't think you should have to - I mean why would a firm risk spending all that time on a claim which they thought was rubbish? A Conditional Fee Agreement by definition should weedle out poorer cases as a solicitor doesn't want to risk working for nothing. The time you spend battling with your After the Event Insurance provider isn't productive (you can't bill it!) and worse, the defendant solicitor rarely sits back and waits patiently to receive the underwriter's money - they threaten enforcement. What you need is an insurance policy that pays out and pays out quickly.
The underwriter we use has a solution to this fiasco - they let the solicitor decide if a case has prospects or not. If a case is lost, they don't ask for the file but simply for the solicitor to list the items they need to claim. Once submitted, the underwriter sends a cheque in settlement within 7 days.
If only other insurance were so simple....
Box Legal Limited: After the Event Insurance Providers
| 0870 766 9997