One possible reason for pursuing a professional negligence claim against a lawyer is a failure to provide adequate advice regarding funding options; for example, conditional fee arrangements or After the Event Insurance (ATE).
The Solicitors Regulation Authority makes it clear that lawyers have a duty to explain and advise on all possible funding and insurance options when taking instruction from clients. Any neglect of this obligation could give rise to successful litigation in the event that the client loses money as a result of this omission.
ATE insurance is in place to provide protection to the client in the event that their litigation is unsuccessful – it allows them to recover part or all of the costs of the litigation.
Between 2006 and 2014 a great number of insurers were offering ATE policies that cost little or no money to the client. For example, with so-called ‘contingent deferred premiums’ the cost of cover was not incurred until the client had successfully resolved his or her litigation.
In the case of the claim being unsuccessful, the client would not incur any cost and the policy would automatically come into effect, covering a significant sum of legal fees. This type of premium was obtained for a great many claims and was applicable to any case considered to have a greater than six-in-ten chance of success.
However, in the wake of the Jackson legal reforms, the situation changed. Before this time, successful claimants were able to recover the cost of the premium from defendants – in contrast, post-Jackson claimants cannot recover the cost of premiums from the defendant and must instead use their damages settlements to pay for the price of cover.
ATE negligence claims
In cases where firms failed to advise clients of the suitability of ATE insurance, and significant legal costs were incurred, those affected may be able to make professional negligence claims against the lawyers concerned.
Although instances of this kind of negligent omission were more common in the pre-Jackson environment, ATE insurance is still available, and often at only negligible cost, to claimants in the UK. As such, any failure to advise of its suitability could result in strong grounds for a professional negligence claim.
Could you make a professional negligence claim?
Whether you were a private or a commercial client, if your lawyer failed to advise you of all your funding and insurance options and this has led to you unnecessarily sustaining financial loss, you may be able to make a professional negligence claim against your lawyer.
For more information about your rights, your options and how we may be able to assist your case.