The imminent introduction of costs shifting – or QOCS (as it has been labelled) in Scotland – for personal injury and clinical negligence cases provides a good opportunity for Scottish lawyers to explore the prospects of arranging ATE legal expenses insurance for their clients at an affordable price.
The experience of the same changes in England and Wales over 6 years ago should give a good indicator to Scottish lawyers representing pursuers. One consequence is that, since 2013, After The Event (ATE) insurance premiums have reduced significantly.
ATE insurance has been available in Scotland for nearly 20 years but the premium rating has often appeared too high for many pursuers to contemplate.
Whilst the overall exposure to the risk of litigation failing is unlikely to change following the introduction of costs shifting, the financial amount of adverse costs will reduce substantially. The pursuers will though still have the risk of paying for their own outlays if they lose.
In clinical negligence cases and higher value personal injury cases those outlays can often exceed £10,000 plus court fees. With that in mind I am certain there will be a range of insurance products for pursuers from ATE insurance providers.
Outlay funding, known as disbursement funding in England and Wales, has proven very popular. This will also be a feature added to many ATE insurance offerings, with some insurers covering the loan and interest charges. I foresee such insurance and funding being offered through the law firm for the benefit of the pursuers – much as it always has been.
In England and Wales, it is generally more difficult to arrange cover for an individual case and increasingly necessarily for a law firm to agree a facility with an ATE insurance provider. We don’t yet have sight of any regulations regarding QOCS and the commencement date is not yet known. But, as it is anticipated early in 2020, I suggest it is important for Scottish law firms to engage with ATE insurers now to ensure they will have a guaranteed insurance facility in place.
Liability insurers and their representatives continue to challenge the introduction of costs shifting in Scotland. The experience of this in England and Wales has not caused claims frequencies to rise. In fact, for certain types of personal injury case there has been a reduction in claims – although I accept this may be due to other reforms rather than just costs shifting alone.
I consider there is a real opportunity for Scottish lawyers to be able to offer their pursuer clients the option of affordable insurance protection.
ATE insurance providers already offer insurance in Scotland and many pursuers do take up such cover. At Temple Legal Protection we have been providing ATE insurance in Scotland for nearly 20 years and are currently engaging with many law firms to ensure they are ready to offer this to their client as soon as QOCS is introduced.
If you do one thing after reading this please review your ATE insurance and outlay funding arrangements/requirements and have dialogue with your insurers. We would be only too pleased to present our views as to what Temple Legal Protection can offer including outlay funding at very competitive rates.
Lastly, the current Scottish legal reforms do not extend to commercial litigation. ATE insurance is also available for commercial litigation risks and for those cases it is possible to obtain individual cover at premium rates which are proportionate to the risk.
You may also want to read about
- ATE Insurance for Clinical Negligence claims – link to https://www.temple-legal.co.uk/solicitors/clinical-negligence-ate/
- Personal Injury ATE Insurance – link to https://www.temple-legal.co.uk/solicitors/personal-injury-ate/
David was Director of Temple’s Underwriting Division for 14 years during which time he supported Temple’s coverholders with his exceptional knowledge, expert guidance and friendly countenance.
He is now a Non-Executive member of the board supporting the strategic direction of the company and attending key events and meetings with our customers.
David has spent over 40 years as a Legal Executive specialising in personal injury litigation. Initially, he was a claimant litigator pursuing leading industrial accident and disease cases.
As an Associate at Davies Arnold Cooper for over a decade he managed a team of lawyers and acted for defendants in personal injury and general insurance litigation. In this role, he became involved in the early development of the ATE market, assisting the ABI in their involvement in the Court of Appeal test cases such as Callery v Gray.
As the London representative for FOIL he was involved in the liability insurers’ approach to ATE and worked with the government and judiciary in several key consultations. He was a member of the CILEX National Council for over 15 years and was CILEX President in 1995/6.
Read articles by David Pipkin