If you are an after-the-event insurer, you are probably rather busy right now.
Solicitors are (metaphorically speaking) queuing outside your front door, down the street, round the corner, and in some cases halfway down the M4 to sign their clients up to policies before 1 April (‘J-Day’).
That, of course, is the day from which clients will no longer be able to recover their ATE premium from the other side when they win, and will instead have to pay for it from their own pockets (or their damages).
Rocco Pirozzolo of QBE, which underwrites mainly commercial litigation, tells me that demand from solicitors has been soaring since the start of the year – while in the personal injury space, people at ARAG tell me they are so busy that they will be staying open all over Easter (the reforms come in right on the back of the Easter bank holiday – great planning as usual).
But that is not the only reason why ATE insurers aren’t taking much leave right now. They also need to work out how on earth they are going to adapt – and price – their products for the uncertain post-Jackson world.
In personal injury, of course, we are about to see the introduction of qualified one-way costs-shifting (QOCS). One of Jackson’s main aims for QOCS was that it would do away with the need for ATE altogether.
But fortunately for the insurers, the actual implementation of QOCS (the rules surrounding part 36 offers, the unexpected and unexplained introduction of terms such as ‘fundamentally dishonest’ instead of ‘fraud’ in the last few weeks) seems to have created enough uncertainty to convince cautious lawyers that ATE may still be needed.
I somehow doubt that was the government’s intention.
With ATE paid for by clients post-Jackson, the cost of premiums should come down, as clients and their legal advisers become much more price sensitive. ATE insurers are now busily working out their new models, and I would expect the new products to be stripping out any bells and whistles that they can, and bringing the cost down as low as it can go while still providing meaningful cover.
ATE insurers are currently providing details of their new products for the April edition of Litigation Funding magazine’s regular table of ATE insurance.
That table, which provides a straightforward way of seeing and comparing the range of ATE products on the market, has been published in the magazine for more than a decade. But from 1 April, it will become a tool that lawyers will not want to be without.
Rachel Rothwell is editor of Litigation Funding magazine, providing in-depth coverage on costs and the financing of litigation.
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