By Matthew Pascall, Senior Underwriting Manager at Legal Futures Associate Temple Legal Protection
Clients lose good cases. Clients settle good cases on poor terms because the adverse costs consequences of losing are potentially catastrophic. Solicitors fail to tell clients about after-the-event insurance or enquire if it might be available.
These things happen in every type of case but there is a certain irony if they happen in the context of a professional negligence claim. Your client might have been the victim of someone else’s negligence but you want to be sure they do not become the victim of yours!
Temple insure a very large number of professional negligence claims. They vary in value, complexity and the number of those involved. Most of these cases require an individual assessment of the merits by an underwriter – not always an easy task in the post MBS v Grant Thornton world in which we now practice.
At times we see a case where it’s pretty obvious something has gone wrong but our old friends causation and quantum are often still problematic as well our new friends scope of duty and nexus. Nonetheless, in the cases we are asked to consider, the solicitor has recognised the need for ATE insurance and sent the case to us to assess.
Is it negligent not to discuss funding with a client?
The 2011 SRA Code of Conduct (in force up to the 24 November 2019) recommended “discussing how the client will pay, including whether public funding may be available, whether the client has insurance that might cover the fees, and whether the fees may be paid by someone else such as a trade union” (IB (1.16)). The current code is less prescriptive but still refers to the need to ensure that clients are in a position to make informed decisions about the services they need (paragraph 8.6) and that clients receive the best possible information about how their matter will be priced and about the likely overall cost of the matter (paragraph 8.7).
In Andrews v Messer Beg Ltd [2019] EWHC 911 (Ch) [2019] P.N.L.R. 23 Stephen Jourdain KC (sitting as a judge of the High Court) reviewed the duty of a solicitor to provide advice about funding and insurance in the somewhat unusual context of a case where such advice had not necessarily been given by the solicitor but counsel had given a number of pieces of isolated advice about funding. The solicitor argued that by doing so counsel had assumed a duty to provide the advice and thereafter to keep it under review.
The judge rejected that assertion. He pointed out that a solicitor was under a clear duty to discuss funding with a client at the outset but counsel owed no similar duty unless specifically asked to advise. The judge added at para. 55 of the judgment: “If a barrister chooses to give advice in relation to the funding of the litigation, the barrister will owe a duty to use reasonable care in giving the specific advice given, but that does not mean that the barrister, by giving specific advice, assumes a continuing duty to keep the question of funding under review and to advise on it as and when required as the matter progresses.”
Whilst solicitors should take care to comply with their obligations under the SRA Financial Services (Conduct of Business) Rules and the SRA Financial Services (Scope) Rules, they do need to take care to discuss and explore ATE insurance with clients. They need to understand how ATE works and how it can protect their client.
At Temple we can provide solicitors with guides that explain how our ATE works both in general terms and in the context of the particular areas of law they practice. We also have a client guide that seeks to explain ATE insurance in simple and straightforward terms. We are always happy to spend a few minutes explaining ATE to solicitors (and we have even discussed it with counsel!).
To ensure you and your clients are properly informed about ATE insurance for professional negligence cases please call Matthew Pascall on 01483 514428 or via email to matthew.pascall@temple-legal.co.uk.
