After The Event Insurance Recoverability

I love reading case law and then seeing the reports on various websites and in points and replies, seeing how cases can be interpreted or misinterpreted as the case may be. For instance, Brush v Bower Cotton apparently is an authority for and against the recoverability of estimated time and time spent drafting attendance notes. How can one thing say two things? Interpretation.

So we have Christie v Wiles, a case that proceeded before District Judge Troy in Newcastle County Court. The background was that Mr Christie instructed Messrs Winns Solicitors to pursue a claim for personal injury and entered into a CFA with ATE. Investigations were undertaken with the client’s insurers with regards to alternative funding. The client’s insurers never responded and so the ATE remained in place. It was accepted by Mr Stansfield of Horwich Farrelly that a claimant was not obliged to use unsuitable Before the Event Insurance. Mr Stansfield however had established on the back of ‘one call’ that there was BTE.

As an aside, the Defendants routinely state that they establish there was LEI in one call, but a) never disclose evidence that it was suitable and b) often get it wrong as it later transpires that the LEI is not an insurance policy but is Legal Assistance. Secondly, due to the fact that ‘Insurers may exchange information for the prevention of fraud’ they are entitled to find out the policy information, whereas Claimant Solicitors have to obtain prior authority from the client to find out such information due to Data Protection imposed by the Insurers. Not sure how an agreement to exchange information for the prevention of fraud applies to disclosure of policy information – double standards if you ask me.

In Christie v Wiles, DJ Troy found that a simple letter of enquiry was too complicated for insurers to understand notwithstanding the fact that they are supposed to be capable of understanding complicated legal jargon – has he not read the small print on his insurance?

DJ Troy found that it was reasonable that if suitable enquiries into alternative funding were made, and it was found that there was no suitable insurance, then the ATE was recoverable. However, in the instant case, it was held that the client should have produced the documentation, notwithstanding the fact that insurers change the policies regularly and so the Defendants scored a close win. You wouldn’t think so having read the Horwich Farrelly website.

All changed in Giles v Veolia. No enquiries were made as the client was a bus passenger and was suing the bus company. It was held in that case that even where no enquiries were made, as the policy held by the bus company was not suitable, and it was unreasonable to use the tort feasor’s policy, the ATE was recoverable. Furthermore, it was held that should BTE be discovered at a later date, if the ATE has already been entered into, it does not have to be unpicked!

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After The Event Insurance Premiums Recoverability in the Portal system

When the RTA portal was designed and the rules written, the easiest thing ever would have been to state that a premium was recoverable and it should be either staged or one stage only. But oh no – that would be too easy.

Instead, the rules were drafted to say ‘may’ and so began the war of county court decisions vs county court decisions.

Wanting their cake and eating it, the Defendant lobbyists argued for staged premiums when it was fixed price, or fixed price when it was staged and/or argued there was no need for such a premium as there was no risk on the portal – notwithstanding the huge variety of ways of the case falling out of the portal, the delays caused by Defendants on the go-slow………………

So, the mantle was thrown down for District Judge Smedley sitting in Liverpool County Court to create a test case and the Claimants and Defendants sat back and waited for his decision released today. The salient points are:

“…So, the claimant and his solicitor dealing with funding at the outset know that their particular claim may or may not resolve within the Protocol. If they choose a single premium policy and the case settles within the Protocol, it will be said on assessment that they should have chosen a staged, reduced-premium policy. If they choose such a policy and the case exits the Protocol and goes to trial, it will be said they should have chosen a single premium policy – in each case because the choice made was unreasonable. I accept Mr. Finn’s evidence on this point. There is no “right” or “wrong” decision to be made. Both single premium and staged premium policies are legitimate.

Having regard to all the matters I have considered, I am satisfied that in the present stage of development of the use of the Protocol, with the inevitable teething problems, and with the uncertainty whether a case will remain in the Protocol or not, a claimant and his solicitor are entitled to choose either a single premium policy or one with staged premiums. Either is permissible; neither can properly be said to be unreasonable…”

So DJ Smedley agrees with what most people other than insurers thought.