Insurers attacked for 'sitting on the fence'

After-the-event legal insurer Brian Raincock has attacked the Association of British Insurers (ABI) for “sitting on the fence” over the issue of expanding conditional fees insurance beyond personal injury cases.

Raincock, managing director of Litigation Protection, said that despite a request from the Lord Chancellor's Department (LCD) the ABI had so far not come up with any ideas on how to assist with improving access to justice.

“The potential for 'no win no fee' agreements is considerable and could relieve the Legal Aid Board of a huge burden,” he said. “It is disgraceful that the ABI is sitting on the fence.”

He said traditional legal expenses insurers were not keen to change to conditional fees because they would cannibalise their existing sales.

“It's an indictment of the British insurance industry that it continues to be ambivalent.”

But Tony Holdsworth, chairman of the Legal Expenses Insurance committee of the ABI and managing director of DAS Legal Expenses Insurance Company, replied: “He would say that, wouldn't he? Conditional fees are his business.”

He added that although the ABI had not expressed an opinion on the matter, the consensus among insurers in Europe, particularly in Germany where legal fees insurance was more advanced, was that members of the public were “better advised to take out traditional before-the-event legal insurance to cover all contingencies.”

There have been unconfirmed reports that the LCD intends to extend conditional fee agreements beyond personal injury cases in October.