Insurers give Irvine grudging support

Lord Irvine has won a private assurance from the insurance industry that it will be able to underpin his legal aid reforms with affordable conditional fee insurance premiums.

But despite the assurance, made at a meeting between the Lord Chancellor and leading insurers last week, many insurers still hold private reservations about Lord Irvine's reforms – especially his ability to get them up and running by 1 April next year.

Lord Irvine is due to lead a debate on his reform blueprint in the House of Lords this Tuesday and the insurers have provided him with statistics which will support his claim that he can meet the April deadline.

The managing director of after-the-event insurer Litigation Protect, Brian Raincock, who was at the meeting, said Lord Irvine had sought assurances that the insurers could deliver and the answer from them had been a clear “yes”.

But privately many of the insurers who attended the meeting still have their doubts.

“Solutions will be found, but it most certainly can't be done for everything,” one leading insurer told The Lawyer.

“The insurance industry is going to take its time. It is not something that will be rushed.”

Another insurer said that while the industry had “the capacity to underwrite these risks, this does not mean that it will”.

Meanwhile, battle lines remain fixed between before- and after-the-event insurers.

Before-the-event insurers have dominated the legal insurance market – and they are unlikely to support the expansion of an insurance scheme that would deprive them of customers.

Raincock said that a joint working party had been set up between the insurance industry and the Lord Chancellor's Department which could help iron out the differences between the insurers.

But one before-the-event insurer insisted that his form of insurance would continue to be cheaper and “make more sense”.