Daily Insurance Industry News
Daily Insurance Industry News
Thursday 18th of October 2018
January 21, 2010

Jackson report will cause surge of spurious claims

by Richard Kilner

Story link: Jackson report will cause surge of spurious claims

Specialist legal expenses provider ARAG has warned that access to justice will be damaged and frivolous claims will surge due to one way cost-shifting and the abolition of ATE insurance and Success Fee.

Business development and marketing director Paul Hurley has said that the have-a-go culture will be encouraged by shifting costs as the client stands to lose nothing.

Hurley warned that liability insurers would be flooded with claims, and that this would negatively affect the timescales in Ministry of Justice reforms due to be implemented in April.

He went on to state his disappointment with LJ Jackson, who failed to fully engage with ATE providers.

Following the withdrawal of Legal Aid, many insurers who filled the gap went bust or incurred substantial losses and withdrew from the ATE market.

Hurley criticised the understanding of the LEI market and the assertion that ATE insurance adds greatly to the cost of litigation, and called on the views of members of the LEI market to be taken into consideration.

He also warned of a declining uptake of BTE Insurance as gross premiums rise and fewer people opt for the coverage.

ARAG has said it would be a brave government that adopts these proposals, and cited previous government support for and backing of ATE Insurance.


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