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National law firm, Irwin Mitchell, which has one of the UK’s largest professional negligence teams, has announced that they are actively looking to represent clients with professional negligence cases against their former lawyers who had failed to discuss litigation funding options with them in advance of prior litigation (see below link to The Times news article: “Missed out on ATE? Then now’s the time to sue, says law firm”).

Irwin Mitchell consider that any claimant who has lost a case and incurred significant legal fees and adverse costs as a result, may have a potential claim against their former solicitors to recoup some of those costs stemming from any failure there may have been to give adequate advice about the After-the-Event insurance options available to cover their potential cost exposure.

There may also be potential actions for loss of chance where, for example, clients chose not to pursue potentially strong cases because of concerns about their legal costs exposure, which may in reality have been insurable. Similarly, actions may also be considered against law firms who acted for clients with funding difficulties but were unwilling to offer to act on a CFA and did not advise that there may be other firms willing to consider such arrangements.

At TheJudge, we have seen a handful of similar claims over the last few years, the majority of which were settled relatively quickly. However, this is the first time that a major law firm made a public statement of intent to actively pursue such claims. The move suggests that their own research has revealed the prospect of fresh claims that can be successfully brought against firms who failed to advise adequately. If that is the case, it would reflect what TheJudge has seen where complaints have already been made, particularly in relation to the availability of own side’s costs insurance.

This news story may create a ripple of nervousness amongst law firms. The expectation is that there may be a number of sizeable cases where law firms may have incorrectly assumed that ATE insurance would not be available or of interest to their client.

What measures can firms take to guard against such claims?

For concluded cases, there may be little to be done, however we believe it would be prudent for all lawyers to consider their existing caseload, regardless of what stage the case is at procedurally, to determine whether they have given appropriate advice about potential insurance options, including the ability to insure a client’s own legal fees, disbursements as well as any adverse costs.  It may still be possible to insure fees and costs retrospectively, as well as the legal costs risk going forward.

Crucial to this discussion is an explanation of the different ways in which insurance premiums can be paid, ranging from traditional upfront premiums, to fully “contingent upon success” premiums, which are only payable if the case succeeds, with no premium to pay at all if the case loses.

Need help? Speak to our team

If you need assistance in determining what options might be available for a client, then of course that is what TheJudge does best.

We are probably the best placed company in the UK to provide a quick independent overview of what might be available, and if a client chooses to make an application, we can liaise with multiple insurers and/or litigation funders on their behalf to seek a range of insurance offers.

Link to The Times Law Blog: http://blogs.thetimes.co.uk/section/law-central/109458/missed-out-on-ate-then-nows-the-time-to-sue-says-law-firm/