After the Event Insurance delegated authority schemes

A ‛scheme’ (otherwise called a ‛facility’) is usually an arrangement between an ATE Insurer and a Solicitor whereby in return for the Solicitor insuring most if not all of his qualifying cases with that Insurer at an early stage, the Insurer entrusts the Solicitor with the authority to insure cases based on far less information being provided than is required for a one-off ATE risk. Indeed, the Insurer may even go so far as to allow the Solicitor to issue ATE Insurance policies without any prior referral to the Insurer whatsoever.

The other carrot that Insurers dangle which can influence Solicitors is the commitment that their premium rates and breadth of cover for a ‘scheme’ will be more advantageous than for bespoke risks offered on a case by case basis.

So the buzz words are lower premiums, more cover and ease of administration for those Firms of Solicitors who can demonstrate the necessary credentials – typically track record, expertise and volume of cases needing to be insured.

Schemes have historically only been available from Insurers for personal injury and clinical negligence cases, but it is now possible for Solicitors who can prove their mettle to obtain delegated authority Schemes for most other categories of litigation, notably insolvency, professional negligence, financial irregularity and personal/commercial contract risks. In fact, for the right Solicitor with the right Insurer, just about anything is possible!

Is there a catch?

Yes and no. No ATE Insurer wants to pick up bad risks, in other words those that will not generate a premium and which will cost the Insurer money by way of claims payments, so the rule of thumb is that the Insurer expects the Solicitor to win at least 8 and probably 9 out of every 10 insured cases. If the odds are worse than that from the Insurer’s point of view, the relationship will not run smoothly for long.

The key point is that you are more likely to find an Insurer offering a scheme that works for you just as much as it works for them if you go through us, as we will know all the available options plus what to watch out for.

So be wary of intermediaries who only offer one option and beware of any Insurer who sets up what is claimed to be a ‛scheme’ and then simply tries to cherry-pick the best cases without fear of competition and then declines the majority of cases presented for not having sufficiently strong prospects.