Introduced in April 2013, the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) made it impossible for creditors to recover success fees and After the Event (ATE) premiums from their opponents – with insolvency claims being a temporary exception. In 2014, despite pressure from R3 and other groups, the government rejected calls to extend this exemption.
You might query why we’re talking about this now, but from April 1, 2015, it will no longer be possible to enter into conditional fee agreements or ATE policies where the price of litigation can be recouped from the debtor. These costs will now be deducted from any money awarded in the event of a successful claim.
This is important because it leaves a very slender window of opportunity for any clients looking to benefit from the exemption’s provisions for insolvency claims.
Solicitors and insolvency practitioners must counsel their clients to apply under these enhanced terms now. ATE insurers are not expecting the volume of applications to exceed the highs of early 2013 (when LASPO was introduced), but it would be unwise to risk the unnecessary embarrassment of a late, rejected application because of simple complacency.
Annecto Legal will endeavour to process all ATE applications as quickly as possible. However – with the exemption set to end in the coming weeks – we have set a hard deadline of March 6, 2015. Applications submitted after this date will not be processed.