Not all ATE policies are created equal

Considering some of the other scandals that have littered the headlines over the past couple of years, the collapse of SSB Group Limited (trading as SSB Law) seems merely unfortunate, by comparison.

As far as we’re aware, the failure hasn’t caused any deaths, in the way that Grenfell and various maternity scandals have, and nobody has been imprisoned through a gross miscarriage of justice, like the hundreds of subpostmasters prosecuted as a result of a computer error.

However, the financial and psychological impact on more than a thousand claimants who have been left facing huge legal bills that most cannot afford, is a serious scandal nonetheless.

While the circumstances surrounding the collapse of SSB Group are unique and still being investigated by both the SRA and the LSB, some of the fallout is a little more familiar.

A failure on this sort of scale inevitably undermines public trust in the legal profession, but the blowback reaches beyond law firms. The reputations of after-the-event (ATE) insurance and, by implication, its providers have been tarnished by association too.

The terms ‘no-win-no-fee’ and ‘after-the-event insurance’ have become a central part of this dreadful story but, like so many parts of the legal services vocabulary, they are complex and difficult for the general public to understand.

‘No-win-no-fee’ agreements have been a key feature of justice in the UK for a quarter of a century, but if the public only ever hears about them in the context of failures like this or speculative cold calls from marketing firms trying to generate work, it’s little surprise that the broader impression of such important tools is negative.

Few people are aware of the vital role that ATE insurance plays in providing access to justice or, for example, that most of those families seeking some form of redress in the aftermath of an avoidable maternity tragedy would have no hope of achieving justice without a CFA.

Just as the actions of SSB Law would be unrecognisable to most law firms, the apparent failure of ATE insurance to protect the clients from exposure to the opponents’ costs is quite alien to reputable ATE providers.

Whether or not the SSB Law clients’ claims were properly insured it does not seem as though they were made aware of any risks and communication between clients, SSB Law and the firm’s ATE provider does not appear to have worked.

There are inevitably many lessons to be learned from the demise of SSB Law, not least that ‘no-win-no-fee’ is easier said than it is underwritten.

ARAG is proud of the fact that we pay the vast majority of claims against our ATE policies. That is, after all, what insurance is for. But not all ATE providers could make the same claim.

Properly applied, secured and explained, after-the-event insurance is an essential tool in the pursuit of justice. For many claimants, it is their only hope, but they must rely on their solicitor to assess the quality of the policy and the integrity of the ATE provider.

Disclaimer - all information in this article was correct at time of publishing.