press release
Insurers urged to engage with Jackson review on BTE/ATE products
11 May 2009
Wide ranging report will herald major changes to the insurance sector
Lord Justice Jackson’s review of the civil justice cost regime
should act as rallying call for insurers to engage with the
year-long review during Phase 2, according to Nichola Evans,
partner at law firm Browne Jacobson.
The report, which looks at litigation funding options such as
conditional fee arrangements, BTE and ATE insurance as well as
American-style collective (or ‘class’) actions, suggests that all
areas are under review albeit that it seems to be accepted that
CFAs are now part of the legal landscape. .
Nichola Evans said: “This report is important to the insurance
industry as it has not only looked at the current funding regime,
but also new ways of funding litigation, such as contingency fees
and self funding systems. Lord Justice Jackson has investigated
other options that are widely used in other countries such as
Germany, Australia and Canada.”
The report also addresses the issue of a potential contingency
model, which would have serious consequences for insurers who find
themselves funding the defence of litigation. “For insurers the key
concern here would centre on the issue of contingent costs, which
would see the losing side in a case paying an additional layer of
costs. This extra cost would be based on the amount between
assessed costs (ie the amount the courts allow) and the amount by
which the contingent fee exceeds this,” explained Evans.
She continued: “This wide ranging review contains a huge amount
that is of interest to the insurance community. For instance, Lord
Jackson’s suggestion that BTE insurance should be considered as
mandatory in future in cases of motor insurance and the fact that
he is asking the insurance industry to actively investigate how
that might work and how such insurance might be promoted. In
addition, the positive noises he is making about the future of
‘class’ actions in the UK, have potentially huge implications for
the insurance industry.
In addition ATE insurers will want to get involved in the
dialogue on whether or not ATE premiums are reasonable and
appropriate, whether the premiums should be recoverable and also
whether access to justice can be preserved where there is an ATE
and a success fee”
“Once we have fully digested the implications of the review, I
think it’s time for the insurance industry to get behind this
review and express its views on whether or not these proposed
changes would work in practice and if so whether they really are
the best solution for litigation funding going forward.”
A final review, containing recommendations from Lord Justice
Jackson is due for publication at the end of the year.
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