ATE Insurance Under Threat For Medical Negligence Claims

The Ministry of Justice (MoJ) are looking to completely abolish the recoverability of ATE (After the Event) Insurance, as reported recently by Temple legal. Although this sounds like something only those working in the Legal sector would care about it could potentially have a massive effect on those wanting to claim against the medical profession in the future. To make sense of what’s going on let’s first look at what ATE insurance is.

What is ATE insurance?

After the Event insurance protects clients from unexpected fees or costs incurred during a claim. Our no win no fee policy means that you will not incur any cost in regards to our services, even if your claim is unsuccessful. However, if your case is unsuccessful, you are still liable for all disbursements incurred such as medical expert reports, expert fees for attending conference or court fees. Your ATE insurance would cover you for all of these fees meaning you won’t have to pay a penny.

How will this change affect a potential claimant?

Without the changes coming into force it’s difficult to say what the effects will be on medical negligence claims. However, it looks as though it could discourage many people from making a claim, as they may not be able to afford to take such a financial risk if they may be liable for a hefty insurance premium.

Speaking from the side of the ATE insurers David Pipkin, underwriting director for Temple, said “I believe there won’t be a market because we, as ATE insurers, can still sell it but I don’t believe clients will be able to afford to buy it. Do the lawyers want to pay for it?

Head of Medical Negligence at Scott Rees & Co, Jeanette Aspinall, describes the potential problems this could cause and offers a proposal “One proposal is that, rather than remove ATE recoverability from all cases, it be removed for cases which will fall within the fixed costs regime. The level of damages where this new regime would apply has been mentioned as being up to anywhere between £25k and £250k. ” she goes on to explain that “The majority of claimants will simply not be able to afford the entire cost of the premium. Some of these people will have suffered a life-changing or traumatic experience. By way of example, many cases involving the loss of a child or a parent fall within the level of cases that this ruling is most likely to affect. These cases may not attract high level of damages but can be complex and obviously upsetting for the family who are trying to find out what has gone wrong. This is only going to serve to make the NHS even less accountable for their mistakes and lessons will not be learnt.”

Why are the MoJ doing it?

To put it simply, it’s all down to costs. The civil litigation, funding and costs team stated in July 2015 (as reported by Litigation Futures): “This government is building on the substantial civil justice reforms of the last Parliament”. These followed Lord Justice Jackson’s report and are intended to control costs and discourage unnecessary litigation, while allowing access to justice for meritorious cases. Indeed, discouraging unnecessary claims from being made is a very valid reason, similar to how the legal aid, sentencing and punishment offenders act cracked down on whiplash claims, but is it a step too far making access to justice harder and harder for genuine claimants?

Jeanette Aspinall, Head of Medical Negligence at Scott Rees & Co, said “By abolishing the recoverability of clinical negligence premiums altogether access to justice is being further limited and will be taken away from thousands of victims of medical accidents every year.”

What happens now?

Temple have been advised that the review will lead to formal consultations. Implementation has been quoted to be around 12-24 months after the formal consultations. These reforms are unlikely to need primary legislation, therefore removing the need for Parliament to debate them. This means that the implementation can happen quickly and without major political obstacles.

It’s a change likely to alter the legal landscape for those seeking justice against the medical profession, particularly for those on low incomes or out of work. Taking legal action against the medical profession may prove to be too risky or expensive for many, which could result in genuine medical negligence never being investigated and malpracticing medical organisations never being held accountable.

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