What is ATE?
When you engage the services of a Law firm for the purposes of a personal injury (PI), road traffic accidents (RTA) or workplace injury claim, you will often sign up to a no win no fee agreement; which means the Law firm will need to fund the cost of running your case until the claim is successful. To ensure the solicitor is not left out of pocket if they lose your case, an insurance policy is purchased. This insurance is usually paid for at the end of the claim if you win and will repay the solicitor their costs of running your failed claim.
Historically, PI and RTA claims have high success rates so insurance policies were not too expensive.
So, what went wrong?
It is well known that solicitors have had agreements with Insurance providers in which they will charge higher amounts for the insurance policies and in return receive a commission back from the insurance provider. This ensures the Solicitor is essentially paid a fee for ensuring a specific insurer is used. A number of law firms have received fines from the Solicitors Regulation Authority (SRA) for receiving these commissions without disclosing them to their clients first. So not only were you overcharged for an insurance policy, the extra money was paid to the solicitor as a commission that was not disclosed.