The rush for ATE – and the risk of claims arising
After-the-event insurance premiums have been a plague to surveyors, who have borne the brunt of claims arising from the property crash.
As has been well documented, this is set to change when the civil litigation reforms come into force: from 1 April 2013, claimants will no longer be able to recover ATE premium from the losing defendant.
Whilst this will come as a welcome relief to defendants, solicitors representing claimants on claims without the benefit of ATE insurance may themselves be at risk of a professional negligence claim. If a solicitor does not secure ATE insurance for their client before 1 April, their client will not be able to recover the premium and may legitimately complain that it could have avoided the cost had the solicitors acted promptly and advised them properly.
The problem is compounded by the rush of firms trying to secure cover while the premium is still recoverable. With insurers struggling to process the unusually high number of applications, even applications submitted prior to 1 April may not be processed in time. Once defendants are no longer footing the ATE bill, there is a real risk that disgruntled claimants may look to their solicitors to cover this cost instead.