LEIG concerns at insurance changes in defamation proceedings – claimants could lose out, 27 October 2009

Legal Expenses Insurance Group

News Release : 27 October 2009

The Legal Expenses Insurance Group (LEIG) expressed concern today at the changes to insurance arrangements for defamation proceedings that were introduced earlier this month.

In future, early notice will have to be given to defendants if After the Event (ATE) insurance has been taken out. There will then be a 42 day cooling off period where, if the defendant admits liability and it leads to a settlement, the ATE premiums will not be paid by the defendant. Previously ATE premiums were recoverable in all instances where the claim was settled so long as they were deemed at a reasonable level.

Tony Baker, Director of the LEIG, commented:

The changes are introducing great uncertainty into the ATE market. They could reduce access to justice as claimants and their legal advisers may be reluctant to proceed if they believe insurance protection is either not available or the costs cannot be recovered, even for a successful claim.

The ATE market is dependent on the recovery of reasonable premiums in successful cases to meet the objectives of the Access to Justice Act 1999. If this does not happen then the ATE market cannot function on a commercial basis. The Access to Justice Act came about with the withdrawal of legal aid and was aimed at ensuring claimants, even with very modest means, could obtain access to justice; ATE is an integral and fundamental part of this legislation.

Tony Baker added:

The defamation changes to ATE premiums may see some insurers leave the market and those that remain may have to increase significantly premiums for the relatively small number of cases that remain. That could lead to challenges over recoverability of premiums from defendants and thus further uncertainty.

-ENDS -

Notes for Editors

1. The Legal Expenses Insurance Group (LEIG) was formed in April 2006 by a number of leading legal expenses insurers and intermediaries. The aim of the Group is to work together to protect and advance the rights of claimants to justice and fair levels of compensation. The following companies have to date joined the LEIG:

Albany

Angel assistance

ARAG

DAS

Elite Insurance Company

Financial and Legal

IGI Insurance

LAMP

MSL

Temple Legal Protection

Templeton Insurance

ULR Norwich

It is estimated that members represent in excess of eight million motor legal expense policyholders and over 16 million policyholders in general.

2. Tony Bakers contact details are:

Tony Baker

Tel: 01920 465000

Mobile: 07725 462528

Email: thetonybaker@gmail.com

A jpeg picture is available on request.

3. Website: www.leig.org

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