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What now for the ATE market?

Posted by David Brown, ATE underwriting manager at Litigation Futures Associate DAS UK [1]

Brown: Greater confidence

In the Court of Appeal decision in the conjoined cases of West and Demouilpied, reported on Litigation Futures [2] in July, the court addressed the issues of reasonableness and proportionality, and the ‘proper’ approach to the assessment of costs, including after-the-event (ATE) insurance premiums.

It was a potentially huge moment for the ATE market, so I thought it might be useful to share my thoughts on the outcome, and break it down to its key elements – DemouiIpied for Dummies, if you like.

Background

Significantly, this was the first time an ATE premium had been scrutinised by the higher courts since Rogers v Merthyr Tydfil CBC in 2006. And whilst the decisions in West and Demouilpied focused on ARAG’s underwriting methodology, given the direct involvement of both DAS and LAMP in the assessor’s hearing prior to the appeal, this decision was always going to have wider ramifications for the market – and, of course, for the NHS.

It was anticipated that the decision would provide lower courts with much-needed guidance on how to deal with the future assessment of ATE premiums in the post LASPO costs landscape.

The decision

The bottom line is that ARAG was successful in recovering the ATE premiums associated with these cases in full, and there are a number of useful points to highlight that I think will assist the ATE market at large. The court:

The impact

The impact of the decision remains to be seen, but here is what I think we can expect to see:

Whichever way you look at it, this will all be good news for access to justice, and a sustainable ATE market.