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I was asked yesterday whether solicitors face a greater or lesser risk of professional negligence surrounding the advice given to clients regarding litigation finance and After the Event (‘ATE’) insurance, once the Legal Aid, Sentencing and Punishment of Offenders Act (‘LASPOA’) is enacted.

I answered by saying that there are disappearing risks, continuing risks and growing risks and, depending on the area of practice, that risk is probably growing rather than disappearing. Extending that conversation further, I’ve listed the more common professional negligence risks I could identify for solicitors below. I am sure this is not an exhaustive ist and specific risks will arise unique to individual circumstances, however, these risks are perfectly manageable provided solicitors arrange systems that will ensure fee earners have access to up to date information when they need it.

DISAPPEARING RISKS

1. Failure to advise about the existence of insurance or explain that the premium may be recoverable under the Access to Justice Act 1999
2. Failure to perform or recommend an adequate search of the ATE insurance market to maximise the potential for the premium to be recoverable
3. Failure to comply with the Notice of Funding rules to ensure the ATE insurance premium can be recovered inter-partes

Please note that these risks are not disappearing for those areas where there are exceptions to the upcoming legislation (e.g. publication and privacy proceedings, insolvency litigation, etc.)

CONTINUING RISKS

1. Failure to advise about the existence of ATE insurance
2. Failure to perform or recommend an adequate search of the market to ensure that the ATE insurance premium, and the terms of the cover, are competitive
3. Failure to understand the interaction between ATE insurance and security for costs orders
4. Failure to comply with clients’ instructions to adhere to the ATE insurance policy’s terms and conditions

GROWING RISKS

1. Failure to perform or recommend an adequate search of the market to tensure that the ATE insurance premium, and the terms of the cover, are competitive
2. Failure to put the client in an “informed position” about their litigation financing options
3. Failure to comply with clients’ instructions to adhere to the terms of a litigation finance agreement

Let us help you to manage those risks, using our unrivalled knowledge and experience of the ATE insurance and litigation financing markets. Contact us to discuss a particular case, or to talk about the options generally.