ATE Blog
Part 36 offers and ATE Insurance
6th May, 2011
I have been asked to explain how After the Event Insurance works with Part 36 offers, so here goes.
As you will no doubt be aware, a Part 36 offer is an offer to settle made by either party in an attempt to conclude a claim early. They are most often made by defendants and can be in relation to liability or quantum or indeed both.
The rules state that, if a defendant makes a Part 36 offer and the claimant decides not to accept it, if they go to trial and less is awarded by a judge or if later the claimant is forced to accept less than was offered, the claimant has to pay the defendant's legal costs (and disbursements) incurred from the date the offer was made until the end of the case. What is more, the claimant also has to pay his/her own legal costs (so basically any disbursements if acting under a CFA) from the offer date as well, as these cannot be recovered from the defendant.
So this is where After the Event insurance comes in. You see the problem solicitors have is that they are dammed if they do and dammed if they don't. If they tell a client to accept an offer, they get hassle from the client who thinks the solicitor isn't getting them the right settlement and just wants to get their costs. If they tell the client to carry on and then fail to beat the offer, the client says they should have advised them to accept. So you see, ATE Insurance is as much to protect the solicitor here as the client. With our After the Event insurance in place, if a solicitor advises the client to continue, but then the offer isn't beaten, the insurance will kick in to cover the adverse costs and disbursements. Without it, the client has to pay these out of their damages OR (as is often the case we hear) they create such a stink that the solicitor ends up paying them.
Well at least this is all changing post-Jackson I hear you cry? Not a bit of it. Exactly the same rules will apply. So which is it? Protect your client from costs and yourself from accusations of bad advice or take a punt on each and every case. Bit like driving without a seat belt. Daft.
Box Legal Limited: After the Event Insurance Providers
www.boxlegal.co.uk | daniel@boxlegal.co.uk | 0870 766 9997
As you will no doubt be aware, a Part 36 offer is an offer to settle made by either party in an attempt to conclude a claim early. They are most often made by defendants and can be in relation to liability or quantum or indeed both.
The rules state that, if a defendant makes a Part 36 offer and the claimant decides not to accept it, if they go to trial and less is awarded by a judge or if later the claimant is forced to accept less than was offered, the claimant has to pay the defendant's legal costs (and disbursements) incurred from the date the offer was made until the end of the case. What is more, the claimant also has to pay his/her own legal costs (so basically any disbursements if acting under a CFA) from the offer date as well, as these cannot be recovered from the defendant.
So this is where After the Event insurance comes in. You see the problem solicitors have is that they are dammed if they do and dammed if they don't. If they tell a client to accept an offer, they get hassle from the client who thinks the solicitor isn't getting them the right settlement and just wants to get their costs. If they tell the client to carry on and then fail to beat the offer, the client says they should have advised them to accept. So you see, ATE Insurance is as much to protect the solicitor here as the client. With our After the Event insurance in place, if a solicitor advises the client to continue, but then the offer isn't beaten, the insurance will kick in to cover the adverse costs and disbursements. Without it, the client has to pay these out of their damages OR (as is often the case we hear) they create such a stink that the solicitor ends up paying them.
Well at least this is all changing post-Jackson I hear you cry? Not a bit of it. Exactly the same rules will apply. So which is it? Protect your client from costs and yourself from accusations of bad advice or take a punt on each and every case. Bit like driving without a seat belt. Daft.
Box Legal Limited: After the Event Insurance Providers
www.boxlegal.co.uk | daniel@boxlegal.co.uk | 0870 766 9997
