ATE insurance premiums must relate to the cost exposure they purport to cover
One of the main Jackson reforms to affect civil litigation, which came into force in April 2013, was the abolition of the recoverability of after-the-event (ATE) insurance premiums and success fees in conditional fee agreements (CFAs) from the losing (paying) party.
This applies to ATE policies and CFAs entered into after 1 April, save in relation to a few select classes of cases. Where the ATE policy or CFA was entered into before 1 April, losing parties will continue to be liable to pay what can sometimes appear to be unreasonably large premiums and success fees.
The reasonableness of the levels of ATE premiums sought to be recovered by successful claimants is a recurring theme in many payment protection insurance (PPI) mis-selling cases. The decision in one such case, Kelly vs Black Horse Ltd, might provide some ammunition when challenging such premiums…
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