Helene Pines Richman outlines the dangers of acting without insurance
Conditional fee agreements (CFAs) are now a regular feature of the cost landscape particularly in certain types of cases. Almost hand in hand, the rules relating to after the event (ATE) insurance have developed not only in respect of the duty of care owed to clients but also the effects inter partes. The Code of Conduct 2007, r 2.03(1)(g), of which solicitors will be aware, provides that a solicitor must discuss how a client will pay for litigation and whether his liability for another person’s costs may be covered by existing insurance or whether special insurance can be obtained. Solicitors, however, may be less cognisant of the current position in respect to their exposure under the wasted cost jurisdiction and/or third party funding rules (CPR Rules 48.7 and 48.2, respectively).
Early safeguards
Solicitors should raise the issue of ATE insurance and make sure the discussion is well documented, to safeguard any later defence to a negligence claim by a losing client facing a monstrous costs order.
The failure to raise the issue or the
