In the last 12 months, two unrated insurers have left the market. The latest message to solicitor firms is that they’re unlikely to have sufficient assets to meet their liabilities so policyholders are being advised to seek new cover. Besides creating uncertainty for both law firms and policyholders, this is an interesting and topical point as two law firms on the Roundtable panel have policies that have been affected. Will there be indemnity for costs and disbursements incurred to date?
Allianz Legal Protection’s latest Roundtable in London saw senior representatives from a number of law firms and industry bodies join us for a lively debate. Two of the topics discussed were after the event (ATE) insurance and the Civil Liability Act 2018, with both deriving many thought-provoking points.
ATE insurance and unrated insurers
Is price everything?
Everyone agreed that the abrupt departure of two providers has made solicitors think more carefully about who they place their ATE insurance with. It’s easy to opt for the lowest prices as it’s always great news for customers, however if the provider can’t make good on their promise to indemnify years down the line, then both the solicitor and customer are left in a very difficult position. It could result in the customer not being indemnified, having to pay higher premiums for policies purchased later in the litigation or even paying two premiums.
Top up insurance
Another issue this raised was the availability of ‘top up’ insurance. Whilst indemnity limits are pitched at a similar level across the market and are suitable for most cases, there’s always going to be the need for extra indemnity on cases that are complex, of very high value and where there are Part 36 offers. The group’s experience over a number of years with different providers was that some wouldn’t provide ‘top up’, even on cases with good prospects of success. This meant finding a new provider late in the day and customers paying very high premiums often disproportionate to the risk or level of damages.
So the conclusion is to do your homework on an ATE provider; ask them the right questions to make sure they’re the right choice and will be there for the customer in their moment of need – now and in years to come.
Civil Liability Act
As always when the debate flows, time was running out as the panel came onto the changes brought about by the Civil Liability Act and the associated impact of the whiplash tariffs. So the group focused on the most pressing points from their perspective and how, as an industry, these should be addressed.
Litigants in person portal
Whilst the media focus has been directed mainly towards the whiplash tariffs, practitioners have been considering what this will mean for their clients and businesses. The panel considered this to be of growing concern, especially when noting the inherent delays in building the necessary portal designed to provide access to those injured and unrepresented. The lack of certainty seems to be the most unsettling, particularly as April 2020 will come round quickly.
The Ogden Discount Rate
Perhaps the aspect often forgotten when considering the Civil Liability Act is one of its central pillars – the Ogden Discount Rate. Whilst discussion has often focused around the impact of the whiplash tariffs; the Discount rate has been reviewed under the act and, subsequently, it’s been revealed that it’ll change to -0.25%1. This is one which will clearly lead to further debate over time.
The value of professional support
Whilst attention is focused on this area, it’s crucial that those working on behalf of injured claimants do so in a compliant and considered way. There will continue to be people that have been injured through the negligent acts of others and it’s imperative that the professionals who’ve always fought on their behalf remain engaged with the victims of such incidents. Access to justice needs to be maintained as well as appropriate compensation.
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