BTE

A before-the-event legal expenses insurer has warned of the “unintended and very serious detrimental effect” of the government’s personal injury reforms on the market. He said the planned increase in the small claims limit for RTA cases would “cast doubt” on the ability of the BTE industry to provide legal representation.

Clients with before-the-event legal expenses insurance can now change from panel solicitors to one of their choice earlier than was previously the case following a subtle but significant shift made by the Financial Ombudsman Service. The point at which policyholders can exercise their choice of solicitor has been the subject of argument for years.

The role which before-the-event legal expenses insurance might play in improving access to justice is to be examined by a working group set up by the Civil Justice Council. BTE is to become more prominent in the wake of the government’s personal injury reforms, with one leading insurer predicting an increase in both demand and premiums as a result.

Leading legal expenses insurer DAS dipped into the red last year, while its after-the-event insurance business shrank. The Bristol-based company reported that a loss after tax of £5.7m for 2015, compared to a restated profit of £0.5m in 2014.

Legal expenses insurer AmTrust has acquired independent provider Arc Legal Assistance for an undisclosed sum. Meanwhile, fellow insurer ARAG plc yesterday announced a 12% growth in premium under management for 2015.

The role which before-the-event insurance might play in improving access to justice is one of three issues that a new Civil Justice Council working party is to consider. It comes as news emerges that the Civil Procedure Rule Committee is to begin work on slimming down the CPR.

A district judge has decided to halve the costs awarded to claimant solicitors for unreasonable and improper conduct in concealing from the paying party the existence of a previous conditional fee agreement and before-the-event insurance.

DAS UK Holdings has reported record income of £199.6 million in 2013, an increase of 10% over 2012. Profits before tax and reinsurance also grew strongly by 9% to £12.1m. Sales of after-the-event insurance rose 45% on 2012.

Leading legal expenses insurer ARAG has expressed its disappointment with the Law Society survey on before-the-event insurance, and suggested that the drive may be to aid law firms not on insurers’ panels.

Law firms which are not members of legal expenses insurers’ (LEI) panels charge “significantly higher” fees which “dwarf” those of panel firms, a leading LEI provider claimed yesterday.