Solicitors have been warned they could face professional negligence claims if their client cannot secure after-the-event insurance before civil litigation reforms come in to force on 1 April.
ATE insurers have told the Gazette they have been ‘inundated’ with law firms trying to secure cover while it is still recoverable from the losing defendant.
That rush is creating a backlog of applications that insurance firms say they will struggle to process in time for 1 April.
Russell Smart, chief operating officer at ATE insurer Elite, said underwriters cannot rush through applications as they have to assess risks.
‘The worry is the solicitor has to go back to their client and say "you have to pay for it now",’ said Smart. ‘It’s going to result in many complaints and potentially professional negligence claims against solicitors.’
In a letter to solicitors, Hannah Lee-Davey, head of professional negligence applications for commercial broker The Judge, has urged that any outstanding applications are made this week.
She said: ‘Indeed, given the large volumes of cases already being processed by insurers, it cannot be guaranteed that even applications made by this date will be assessed in time.’
James Delaney, a director of the firm, said lawyers were sending up to four applications each at a time and that demand had been ‘unprecedented’ in the past month. But with so little time before the Jackson reforms come into force, he said some would not be processed before 1 April.
‘We think some clients are going to miss the deadline and say they were not suitably advised,’ he added.