Costs review sees ATE, CFAs and cost transfer as problem
Lord Justice Jackson published his preliminary Civil Litigation Costs Review on Friday that could see the abolition of after-the-event (ATE) insurance.
His reports says: “ATE insurance is a mechanism which can protect the litigant against liability for the other side’s costs. However, such insurance comes at a price, sometimes a very high price. It is then a matter for the cost shifting rules to determine upon which party that price should fall. Prior to April 2000, that price fell upon the insured party. Since April 2000, it has fallen upon opposing party. Of course, to the extent that cost shifting is abolished or, alternatively, one way cost shifting is introduced, then the need for ATE insurance abates.”
Lord Justice Jackson said: “Today marks the beginning of the second phase of the Costs Review, namely the consultation period. The facts set out in the report have been gathered from many sources. They are not intended to support any particular conclusion. On the contrary, I hope to ascertain, with the assistance of the consultees, where those facts lead us.”
The consultation ends on 31 July 2009.
