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No profit without an ATE policy?

This is interesting.

Pre-Jackson, many barristers were happy to work under a CFA as they made up for lost cases by charging a success fee on their 'wins'. This success fee was of course recoverable from the defendant.

Since April, this has all changed. Most barristers are now a little concerned. Do they continue to offer to work under a CFA or do they work on a standard 'pay me whatever the result' basis?

Interestingly, many are saying - 'it depends on whether you have an ATE insurance policy in place'.

Why this distinction I hear you cry? Well, without an ATE policy, the barrister is concerned that they may not get paid (or more likely be asked to write off the fee by their instructing solicitor). With ATE in place, they know they will be paid win or lose so are happy bunnies. If there is no ATE in place then they may as well be on a CFA and charge the client a success fee.

No problem there then? Er yes there is. You see almost all solicitors are now charging their client a success fee which is capped at 25% of the client's damages. The rules state that this cap includes any success fee payable to a barrister and so, if barristers operate under a CFA, this means they will be taking away the solicitor's success fee!

Simple choice then for solicitors. To protect your 25% uplift, you have to take out an ATE Insurance policy. If you don't, barristers are likely to want to operate under a CFA and so bang goes your profit if you win. If you lose and don't have any cover then bang goes your disbursements. Why wouldn't you insure the case?

Taking out an ATE policy will not only protect your client but it will safeguard your profit.

You all know what to do....

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