The Court of Appeal has rejected a major challenge to the way claimant personal injury solicitors operate the Accident Line Protect (ALP) after-the-event insurance scheme.

It held last week that being on the ALP panel and so having to recommend the Law Society-endorsed after-the-event (ATE) insurance product is not a declarable interest under the now-repealed 2000 Conditional Fee Agreement Regulations. It found that solicitors join the ALP panel because of the quality of the product, rather than for work referrals, so nothing in the arrangements should affect their advice.

The Master of the Rolls, Sir Anthony Clarke, said the ALP panel was different from the panel involved in the 2006 Court of Appeal case of Garrett v Halton BC, where membership was a declarable interest, because it ensured a considerable flow of referrals.

The court added that requiring solicitors to insure all cases to avoid adverse selection is a legitimate obligation.

Sir Anthony nevertheless set out guidelines on disclosure of interest in applicable cases. He said consumer protection required fuller disclosure than claimant solicitors had argued for, to make clear ‘the nature of the benefit that accrues to the solicitor though continuing membership of the panel’. Failure to do so would be a material breach of the regulations.

This part of the ruling could help defendants challenge some other schemes.David Hartley, director of Accident Line services at provider Abbey Legal Protection, described the judgment as ‘a resounding victory for common sense’ which should ‘see an end to technical challenges to respectable schemes such as Accident Line’. He said: ‘We have seen many lawyers dancing on the heads of pins to attempt to wriggle out of costs liability. The Court of Appeal has gone a long way to ensuring that, in future, we know exactly where and with whom this liability rests.’

The three conjoined cases heard by the Court of Appeal are known as Tankard v John Fredericks Plastics [2008] EWCA Civ 1375. Warner Goodman, Leigh Day & Co and Walton Mills & Co acted for the respective claimants, with QM Solicitors (in two of the cases) and Beachcroft for the defendants. The Law Society intervened in each case to support the ALP scheme.