Leading ATE insurer, DAS LawAssist predict that the recent announcement to end the insolvency exemption from LASPO will penalise claimants but not end the need for ATE insurance.
Commentating on the announcement, Richard Whale, sales manager at DAS LawAssist said: “Lord Faulks said in his statement that the government has made a priority of addressing the high costs of civil litigation.
This decision doesn’t reduce the costs of litigation it just moves the burden onto the innocent creditors. This will mean that Insolvency Practitioners will be able to pursue fewer cases and less money will be recovered. This places even more financial pressures upon hard-up businesses and individuals.”
In a statement issued to Parliament on 17 December Lord Faulks outlined that as of 1 April 2016 the recoverability of success fees and ATE premiums in insolvency cases will cease.
Richard Whale continued: “What we have learnt from LASPO is that the need and desire for ATE insurance continues despite changes in premium recoverability. DAS LawAssist will still be offering ATE insurance as there will be a demand for it and we expect to see an increase in submission of insolvency cases before the April deadline.
“Whilst the premium will not be recoverable, ATE will still provide the means to pursue the recovery of owed debts and protection against the cost of litigation should the case be unsuccessful. However this decision by the Government means that the creditors will be penalised by having to pay the premium from the money they recover.”