The Insurance Conundrum in Relation to No Win No Fee Will Dispute Claims
General – what is the relevance of insurance protection to no win no fee will dispute claims
1. In any Will dispute or Will contest claim a risk can arise once court proceedings are brought, to the person bringing or defending them. The risk is that the claim (or defence) is lost as a result of which the losing party can be ordered by the Court to pay the winners’ legal fees. Legal fees in a case of this nature can be substantial – certainly in the tens of thousands of pounds.
2. If the person bringing the Will dispute or Will contest claim has the benefit of a no win no fee arrangement then notwithstanding the “loss” of the claim, he or she won’t be responsible for his or her own legal costs. However, as mentioned, this will not apply to the winners legal costs which the Court is likely to order them to pay.
3. Under a no win no fee arrangement this can be substantially ameliorated if not avoided altogether by means of a specialist insurance policy called “After the Event” or “ATE” insurance. Of course it is only available if you and/or your Solicitors have persuaded the insurance underwriters that you will win or successfully defend your Will dispute/Will contest claim. Equally (and even more encouraging), you don’t actually have to pay the premium for this insurance up front – rather it reflects the no win no fee arrangement itself whereby the policy premium (or fee) is only paid if you win your case and you pay nothing at all if you lose.
What then you might ask is the conundrum or “difficult question” arising from the use of ATE insurance in no win no fee Will dispute or Will contest claims?
Actually, there are a number:
• If you have no money in the first place and a somewhat speculative or weak claim then perversely your lack of funds strengthens your claim. How so? Well quite simply it means that whatever costs your opponent spends defending your claim are unlikely to be recovered by him (or her) even if you lose and are ordered by the Court to pay the winners’ costs. This will make it easier for you to obtain a settlement or agreement whereby you receive a limited amount from the estate, probably reflecting the sum which your opponent might otherwise “waste” on their own legal fees and their risk of losing overall. Perversely, if you obtain ATE insurance in a case of this nature it might actually encourage your opponent to defend your claim, make no attempt to settle it or to reach an agreement with you, and take it all the way to a trial knowing that their costs will (to a large extent) be met by your insurers.
• The ATE insurance premium might prevent you for reaching settlement or agreement terms. You might regard it as a good thing to go all the way to a trial, but in most instances it won’t be. Cast iron defences or claims are very difficult to find so there is always a significant financial risk associated with taking a case all the way to a trial. Given your liability to pay the ATE insurance premium is triggered if you do reach an agreement, you need to be cautious about when and whether (at all) to take on such insurance, particularly where your claim is a little weak and/or the estate is relatively modest or even an average size. This is because such premiums can often exceed £10,000 or even £20,000. Obtaining ATE insurance prematurely then can considerably distort your negotiating stance and might stop you from reaching an agreement altogether.
• Conversely, if you leave taking on your insurance until shortly before a trial, you might find that your insurance options become much more limited and that the premiums are even more expensive.
• Currently, your ATE insurance premium cannot form part of your claim for costs against your opponent should you go all the way to a trial and win with your opponent thereby being ordered to pay your costs. It will be paid from the part or share of the estate paid to you.
What can I do to limit or restrict these problems?
Each case turns on its own facts and circumstances. We don’t usually recommend that you take on ATE insurance straight away. We are more likely to recommend that you consider it at the start of Court proceedings, but again our advice will depend on the circumstances of your claim at that time. We are able to provide you with access to some of the best brokers for ATE insurance in the UK.
If you consider that any of these facts and matters are likely to apply to you, or you would like to ask us for more information about our no win no fee arrangement, or you simply want us to assess your claim, then please do not hesitate to contact us for a confidential no strings chat.