By Matthew Best, Underwriting Manager
Catastrophic personal injury
Our underwriting team were approached by a long-serving partner law firm, in relation to a potential top up in indemnity level on a complex, high value personal injury matter. Within this case study we highlight our flexibility when it comes to topping up indemnity levels.
The client was riding their bicycle when the defendant failed to give way on a roundabout. The client remembers passing the front of the defendant’s vehicle and then everything went black. Unfortunately, the client suffered complex injuries to both of her knees.
Liability was admitted and a defendant part 36 offer was received for £450,000. At this point there was £100,000 limit of indemnity [LOI] on the case. The client requested a further £100,000 cover.
After reviewing the case papers, our lead underwriter on this case considered what risk the client was exposed to. The client’s own disbursements up to and including trial were estimated at £160,000 – the big question was how much of these have been incurred post the defendant’s part 36 offer?
The defendant’s costs post expiry of their part 36 offer [which was of course capped at the damages level]; this was likely to exhaust the entirety of the £100,000 LOI already provided by Temple Legal Protection. The lead underwriter returned to the fee earner and advised that it would be helpful to know the amount of costs incurred by the defendant post expiry of their part 36 offer.
We quite strongly assumed that, if this case went to trial and failed on the part 36 point, that ALL estimated fees within the costs budget would apply [so about £81,000], plus a portion of incurred costs [£43,000 being 100%].
£80,000 own disbursements plus defendants’ costs estimated at £81,000 [plus a portion of incurred costs, say £15k] – gave a total of £96,000. We had to remember that the case would not lose in full [save for the minimal possibility of the defendant removing their liability admission]. Realistically the 100% exposure to the defendant’s disbursements [and actually the client’s] could be ‘taken off of the table’.
The client had £100,000 already, the only risk was not beating the part 36 offer made. So therefore, the current indemnity limit ought to suffice. However, the client might well have wanted a ‘cushion’ and requested a further £100k – in reality they probably needed £25k-£40k.
Temple Legal Protection returned to the fee earner with three options available to the client;
1. Top up by the £100k requested for an additional premium
2. Top up by £50k, for a smaller additional premium [it being noted that Temple will leave the option of a further £50k open to the client if needed], or;
3. Leave the indemnity limit as it is
This is just one example of how Temple deals with top up in indemnity requests. We work with our law firm business partners in order to provide an intelligent, helpful and economic resolution for their clients. We prioritise customer service and take the need for value for money very seriously.
If you have any cases at the moment that are insured by us where you feel a top up in indemnity might be necessary; please contact me to see what we can offer your clients. Call me on 01483 514804 or send an email to matthew. firstname.lastname@example.org