Client information - after the event insurance

PROTECTING YOU FINANCIALLY WHEN MAKING THIS CLAIM

Insuring Against Losing

Although we believe your claim is likely to succeed, we strongly recommend that you insure against the risk of either losing your claim or having deductions made from the damages you recover. This sort of insurance is called After The Event insurance (“ATE insurance”). As we have explained, if your claim is unsuccessful, you will not liable for this firm’s costs, but we recommend that you purchase insurance because:

  • If you lose your claim you would have to pay our expenses (called disbursements) i.e. what we may have to pay on your behalf for items such as your expert report as well as court fees and counsel’s fees for both advice and court appearances if necessary. It is difficult for us to predict what the total of these disbursements may be because many of them depend on the complexity of issues which may only come to light later in the case, and of course much will depend on whether the defendant agrees to settle with you, and if so at what stage. We can say however that the disbursements will certainly be many hundreds of pounds, and could well exceed £4,000 if Counsel is involved and/or a trial takes place.
  • If you lose your claim or even if you win it, you might also have to pay some or all of your opponent’s costs, disbursements and VAT (“the Defendant’s Costs”). These would normally total many thousands of pounds but again the exact sum is difficult to predict at this stage. Explaining all of the circumstances in which you may have to pay the Defendant’s Costs is quite complex. Nevertheless, a brief summary is as follows:
    • In many situations where you may have to pay the Defendant’s Costs, the maximum sum which you would pay is the amount of compensation and interest you win, although this cannot be guaranteed. The most likely circumstance where this would occur is if you “failed to beat the defendant’s offer”. This would happen if the defendant offered you compensation which you refused to accept (normally because the offer seemed too low) but later in the case you were forced to accept that offer (or a lower offer) or the court awarded you the same amount as the defendant had offered (or less). If you ended up with less than the defendant had offered, then you would have to pay the Defendant’s Costs from 21 days after their offer, until the end of the case. It is quite likely that as a result you would then receive no compensation whatsoever.
    • Another circumstance where this would occur is if (as part of the process leading to an eventual trial) we or the defendant made an application to the court about anything concerning your case, and the court ruled in favour of the defendant and (as is normal) then awarded costs against you.
    • There are other situations however where the Defendant’s Costs are not limited to the amount of damages you recover. Some of the situations are reasonably clear e.g. if you conduct your case unreasonably or your claim is misconceived or fundamentally dishonest, but other situations are less clear and may depend on future court rulings.
  • If we need to instruct a barrister, having ATE insurance will avoid you having to pay your barrister a “success fee” out of any compensation you receive, and so may save you money even where your claim is successful.

Because of these risks and advantages, we strongly recommend that you should buy ATE insurance to protect yourself. We recommend that you obtain a policy from Leeward Insurance Company Limited (“Leeward”) which we will purchase on your behalf to provide that protection.

MOTOR/NON-MOTOR/PUBLIC LIABILITY (SLIP & TRIP)/INDUSTRIAL DISEASE

FIXED MONEY SUM:To purchase this policy now, the premium is £795 plus IPT at the rate when the premium is paid (currently 12%). This price does not vary during the lifetime of your claim.

It is important to note that if a policy is purchased at a later point in your claim then the premium will be more expensive than that listed above. It is better to insure the claim at the outset to ensure that you have cover for all eventualities, such as an offer is received or you need to issue proceedings, and to guarantee that you are securing the cheapest premium.

The benefits of the policy (as well as its key terms and exclusions) are set out in the “Key Facts; Policy Summary” document, but we would specifically mention:

  • You do not have to pay anything for this policy now.
  • If your claim is unsuccessful do not have to pay for this policy.
  • If your claim is successful, the premium will be deducted from the damages you recover.
  • The policy gives you the ability to ensure that the defendant pays you the correct level of damages because you can confidently reject a damages offer which is too low (if we advise you to) and if you later receive less than the sum you rejected, the policy will pay your liability for the defendant’s costs. This benefit alone may well outweigh the cost of the premium.
  • The policy guarantees that if you win you will be paid a minimum of £1,000 and if (with our agreement) you reject an offer but end up with less than the sum you rejected, it will pay 75% of what you would have received, up to a maximum of £5,000.
  • We do not receive any commission on this policy.

We would advise you however that we are not insurance brokers. The legal expenses insurance market is complex and changes frequently. Accordingly we do not offer professional advice on all policies available in the market.

Unless you instruct us otherwise, we will arrange for a Leeward insurance policy to be taken out to protect you against the risks set out above. In doing so you will be agreeing to allow the insurer and our agents Box Legal Limited, to inspect your file and receive ongoing information from us regarding the progress of your case and its outcome. You will also be agreeing with Leeward that we can act on your behalf to ensure that the policy terms are complied with and that any policy premium received and your right (if any) to recover it from the defendant(s) is held in trust for your insurers, until the premium is paid. Most importantly, your instructing us to proceed will constitute your irrevocable agreement to allow us to receive your damages and to deduct the appropriate premium from the damages and to send it to the insurer in settlement of the liability to pay the premium.

The Insurer

Please note that Leeward Insurance Company Limited is incorporated in Bermuda and is regulated in Bermuda by the Bermuda Monetary Authority under the Bermuda Insurance Act 1978 as amended. Any transaction with Leeward Insurance Company Limited will not fall within any compensation scheme, but you have the right to refer any dispute under the policy to the Financial Ombudsman Service in the United Kingdom. Alternatively, any dispute under the policy will be dealt with by an arbitrator appointed where necessary by the Law Society in accordance with the “Arbitration” section of the ClaimSafe policy. The policy is governed by English law. We have carefully considered the effect of this on your behalf, and we are satisfied that overall, taking into account all reasons which might lead to non-payment, there is a very low risk of non-payment of claims, and indeed this policy appears to be superior in this regard to many on the market. Please let us know if you would like further details.

Please also note that as with many insurance policies, our relationship with Leeward Insurance Company Limited is intended to be long-term and a high level of claims on the ClaimSafe policies which we take out for our clients may prejudice that relationship and eventually increase premiums or involve payments which this firm may be responsible for. If in the future the circumstances of your own case, materially conflicts with ours then we will recommend that Counsel’s advice should be obtained on those areas of conflict, for which the policy will pay any irrecoverable costs.

Authorisation

We are not authorised by the Financial Conduct Authority. However, we are included on the register maintained by the Financial Conduct Authority so that we may carry on insurance mediation activity, which is broadly the advising on, selling and administration of insurance contracts. This part of our business, including arrangements for complaints or redress if something goes wrong, is regulated by the Solicitors Regulation Authority. The register can be accessed via the Financial Conduct website at https://register.fca.org.uk/s/

The Law Society of England and Wales is a designated professional body for the purposes of the Financial Services and Markets Act 2000. The Solicitors Regulation Authority is the independent regulatory arm of the Law Society. The Legal Ombudsman deals with complaints against lawyers. If you are unhappy with any insurance advice you receive from us, you should raise your concerns with either of those bodies.

Products

We only select products from a limited number of insurers for legal expenses insurance policies, but we are not contractually obliged to conduct business in this way. If you wish you can ask us for a list of the insurers.