How much are the premiums?
|
This depends on many factors: the type of case,
the amount of cover required, the stage the case has reached and
the prospects of success are all factors. For a straightforward
personal injury claim insured at an early stage the premium
might be just a few hundred pounds, whereas for a complex clinical
negligence claim it might be tens of thousands of pounds. Solicitors
who use our broking service
have access to many of the leading insurers and in many cases
receive competitive quotations from which to choose. It can
be difficult to know whether an individual premium is reasonable
unless it is compared to others. Our database
service provides indications of the premiums insurers charge
if solicitors prefer to deal direct with insurers.
|
Can premiums be deferred?
|
It depends on the insurer. A small number defer
premiums until the conclusion of the case (and the premium is
only payable if the case is successful, in much the same way
as a success fee). If a premium is not deferred, it is common
for insurers to offer some kind of funding alternative. Subject
to the firm registering with a specified lender, the premium
and other disbursements are paid by a bank and then repaid at
the conclusion of the case: either by the client out of the
proceeds of the claim or by the insurer if the case is lost.
Usually, no interest charges are payable as the case progresses
so the effect is the same as having the premium deferred. The
main difference is that the interest charges on any loan are
not recoverable.
|
Is funding for disbursements available?
|
It depends on the insurer which is offering the
policy and is subject to the firm's registration with a specified
lender (see also above). Because disbursement funding is a common
requirement, most insurers have made arrangements with one or
more lenders. One point to mention is that those firms who are
able to organise funding through their own banks are likely
to obtain more competitive rates. Despite base rates being below
5%, most funding schemes on offer have an APR of at least 12%.
|
Do I have to insure all cases with the same
insurer?
|
As a solicitor, you have three choices:
1. Enter into an arrangement with one insurer to insure all
qualifying cases (usually those which are handled under a Conditional
Fee Agreement).
2. Decide which cases to insure (and when to insure them) and
then approach insurers on a case by case basis.
3. Don't insure any cases.
Each option has its advantages and disadvantages (although we
would strongly advise against option 3!). We would be pleased
to discuss this further - please telephone 01903 23 22 55.
|
Do any of the insurers guarantee recoverability?
|
| This is rarely available although may occasionally
be an option if you agree to insure all cases with the same
insurer. One of the main reasons a premium might be reduced
will be if it considered by the court to be too expensive. Ways
to counter this argument are to either obtain competitive quotations
(see our broking service)
or keep up to date with other premiums being charged for comparison
purposes (see our database
service).
|
What are the reporting requirements that the
insurers have after a policy is issued?
|
| This varies from insurer to insurer. The reporting
requirements are usually set out in the insurer's policy wording
and these should be strictly followed to avoid any problems
in the event of a claim. Usual requirements include reporting
when proceedings are issued, when a Part 36 offer is made, when
a trial date is set and when there is a change on the prospects.
|
Are all policies the same?
|
There is an enormous difference between the various
policies. Areas to look out for include:
*Whether costs before the date of the policy are covered
*Whether own counsel's fees are covered (if counsel is
not acting under a CFA)
*Whether there is a costs offset clause in the event
that a Part 36 offer is not beaten
*Whether the premium (and any associated loan interest)
is covered under the policy
|
What does a CFA policy cover?
|
| Generally, if you are acting under a Conditional
Fee Agreement, the after-the-event insurance policy will cover
all costs other than your own fees. So, the opponent's costs
and disbursements together with your own disbursements are usually
covered as standard.
|
What does delegated authority mean?
|
| This means that you, the solicitor, are given
the authority by the insurer to issue policies on the insurer's
behalf. So, you, not the insurer, decide whether or not to
insure a particular case. Usually you will be required to insure
all cases where you enter into a Conditional Fee Agreement with
the client and there may be certain types of case which you
have to refer to the insurer for prior approval.
|
| |
