Litigation Protection hikes ATE premiums

Leading after-the-event insurer Litigation Protection has hiked its premiums in the first post-Callery v Gray movement in the insurance market.And it has led the company's managing director, Brian Raincock, to predict that the 350 figure which the Court of Appeal said was reasonable in a minor road traffic claim 'may swiftly be overtaken by insurance market forces'.Following an actuarial review, Litigation Protection has unveiled guideline premiums from 275 for road traffic personal injury matters and from 700 for other personal injury matters, for 25,000 of cover.

All cases are individually assessed.Previously, premiums started at 250 for straightforward cases and 450 for 'special' cases, such as repetitive strain injury and industrial disease claims.The 350 premium in Callery was for100,000 of cover.

The same amount of cover with Litigation Protection would cost 'considerably more than 275', a spokesman said.Mr Raincock said the low level of premiums since conditional fees were introduced in 1995 are now 'coming home to roost'.

He said that, like others in the market, Litigation Protection's accounts are showing losses, particularly on old cases.James Innes, chairman of Abbey Legal Protection, which runs the Law Society-backed Accident Line Protect scheme, said he was happy with the 350 figure, which is 50 more than the starting point forAccident Line's premiums.

'We have lost money,' he said.

'We need to increase premiums slightly and that's what we'll be doing.'David Marshall, treasurer of the Association of Personal Injury Lawyers, noted that Master O'Hare, in his report to the Court of Appeal in Callery, said the market is immature and volatile.

'I am a little bit concerned that this appears to be a quite substantial increase,' he said.However, Emmanuel Gilbert, managing director of thejudge.co.uk, an on-line database of after-the-event insurance, said the new premiums are 'broadly in line with what's available elsewhere'.Mr Gilbert added that his reading of Callery was that 350 was a reasonable premium for a straightforward fast-track road traffic case, irrespective of the level of cover.

Such a case would never need 100,000 of cover anyway, he maintained.