Could Lamp Insurance liquidation be the start of more failures in the ATE arena?

Lamp-Insurance-liquidation

The news that Lamp Insurance Company (LAMP) has been forced into liquidation will certainly have come as a surprise to most of the law firms that were using the company’s After the Event insurance products, but the pressures on the sector have been so great for so long, that it was only a matter of time before we saw another ATE provider leave the market.

While it is not yet clear precisely what brought LAMP to the point of insolvency, there is no doubt that the uncertainty in the clinical negligence market and the sometimes extreme delays in the recovery of ATE premiums has put great pressure on cash flow, especially for some smaller providers.

The consistent challenging of ATE premiums in clinical negligence cases has been continuing for many years. ARAG policies have themselves been challenged on numerous occasions and two case have recently been the subject of a test cases in the Court of Appeal. Judgment is expected before the summer recess.

While it is only right that the validity of ATE policies should be tested and confirmed in the courts, as they have been many times, the repeated challenging of every possible aspect of policy and premium is a tactic that only really serves to drive up costs on all sides.

The result is that all but the most determined, secure and financially resourced providers will struggle, ultimately reducing market choice for solicitors and their clients. ARAG remains resolute in our commitment to deliver access to justice for all people, whether they can afford it or not, whatever challenges the ATE sector may present.

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