A client is considering entering a conditional fee agreement with a solicitor to finance a professional negligence lawsuit against another solicitor. Furthermore, the client wants to obtain an after-the-event insurance policy.
What the after-the-event policy will cover?
A client is considering entering a conditional fee agreement with a solicitor to finance a professional negligence lawsuit against another solicitor. Furthermore, the client wants to obtain an after-the-event insurance policy.
What the after-the-event policy will cover?
The disbursements and the other side's solicitor's costs in the event the claim is unsuccessful.
(D) If a claim is unsuccessful, an after-the-event insurance policy will cover the disbursements and the other party's solicitor's costs. Disbursements refer to the expenses incurred by the solicitor to progress the claim, such as court fees, expert reports, medical records, and so on. After-the-event policies also cover the risk of having to pay costs to the other party if the client's claim is unsuccessful.
Options (A) and (B) are incorrect as the policy only covers the liability to pay the other party's costs and the client's disbursements. After-the-event insurance is often associated with a conditional fee agreement, so the client is likely not liable to pay their solicitor's costs if the claim is unsuccessful. However, this is due to the conditional fee agreement rather than the after-the-event insurance policy.
Option (C) is incorrect as an after-the-event policy does not cover the payment of damages.
Option (E) is incorrect because after-the-event insurance does not apply when the claim is successful. In that case, the disbursements and costs are recovered from the defendant.