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Herbert -v- HH Law in the Law Society Gazette

The Law Society Gazette has now reported on the Herbert decision, about which we posted yesterday. You can get to the full article here.

Most interesting are some of the comments in relation to ATE premiums, which seem to suggest that the true cost of premiums generally (and we should stress the finger is not being pointed at any particular firm of solicitors, or any specific insurer) are significantly lower than the amounts actually being charged to clients. If what one of the anonymous posters says is true this is a most serious issue - tantamount to fraud.

If you have been charged for an ATE premium call us on 0800 689 5183 or click this link to fill in a brief questionnaire online to start your claim. You may be entitled to a refund.

The comments here about ATE are all true. I speak from experience, but as a former lowly RTA paralegal - so admit I wasn't privy any board level discussions.

But my understanding of the process is this:

1) The actual price of the ATE premium is somewhere between £30 and £50 – i.e. that's what eventually gets paid to the insurer, but

2) An ATE policy certificate is made up for whatever figure the solicitor asks. In this case, it seems £349 because that's what HH thought they could get away with. Where I worked, it was around the £270 mark. Clearly HH are braver than my bosses were!

3) The fee earner running the case is trained to push the ATE policy on the client hard, make it appear that it would be crazy to run the case without them taking it out (even if liability had already been admitted by the other side, or the client was a passenger.) Where I worked, we would have to refer the client onto a team leader if the client was resistant, so he / she could apply more pressure.

4) In the vast majority of cases, the client doesn't have a clue, and just agrees to it. "Well, you're the solicitor (I wasn't a solicitor) so you know what you're talking about. If you say I need it and that's what it costs, I'll agree to it."

5) The case comes to an end and the ATE money is deducted from the client's damages (along with 25% of their damages in every single case of course!)

6) All of the money gets paid to the ATE insurer, they keep their chunk, and the rest goes somewhere else for the benefit of the solicitor. Usually the money goes to 'pot' held by a CMC to pay for new claims, or else another 'friendly' company that one of the directors of the firm has access to, either directly, or through a family member.

7) On the rare occasion the client complains about it – we just point them to the small print they signed at the start of the case where they agree to it, and the majority leave it there. If they kick up a stink and it looks like they might complain to the ombudsman, its refunded as a 'goodwill gesture.' That happened about one in a thousand times.

999 times £220ish commission = £219,780. You can see why it was done.

I'm glad I'm not involved any more. 

by Anonymous Poster commenting on the Law Society Gazette article 23/03/18
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