DCA reforms may hit the ATE market hard

The DCA has confirmed its intention to press ahead with reforms aimed at speeding up the claims process. After the Event (ATE) insurance will be targeted - 3rd May 2007

Following the recent press release from the DCA on the future of personal injury claims - more here - the ATE insurance market is in turmoil.

The DCA are promoting new processes within the claims environment that will mean simple personal injury cases will not require any ATE cover. The risk of having to take out court proceedings in the majority of claims is relatively low and the DCA have (subject to further consultation) mooted the prospect of stripping out ATE insurance until the legal arguments have been aired. Only when amicable negotiations fail, should ATE be considered.

This would be a huge blow for the ATE insurers who have spent the last 10 years slowly building their business models. They currently insist on many solicitor practices taking out cover with them from a very early stage in each and every claim. The DCA has proposed that this is a potentially unnecessary expense.

This new initiative has yet to be agreed but the concept seems sound and both sides of the divide are unlikely to object to the changes. This will affect simple claims such as car accident compensation cases where costs are generally squeezed to the bare minimum.

More information can be found on the DCA official website: