The legal expenses market is gearing up for massive growth, following dramatic cuts to legal aid planned for this year.
State-funded legal help is set to be abolished, in all but a minority of personal injury cases.
Brian Raincock, managing director of Litigation Protection, believes this sweeping change will create a vibrant market in after-the-event legal cover.
He said: "Before-the-event cover will be eclipsed by the after-the-event market. We forecast the ATE market will grow by 200% in 2000, as insurers have put funding in place for advanced premiums and work in progress."
Raincock stresses that ATE cover is more practical, as it can be bought as the need arises, and is more likely to ensure cases are handled by independent lawyers.
He explained: "Some before-the-event legal insurers have introduced panels of tied legal advisers which can restrict the choice to clients."
Alex Wise, spokesman for Eastgate Assistance, agrees the changes to legal aid will have a significant impact on demand for legal expenses products.
But unlike Raincock, he views this as a real opportunity for brokers to provide commercial firms with before-the-event affinity cover for their employees. His firm is in the process of signing what is believed to be the largest affinity deal for legal expenses cover with Eagle Star, involving one million policyholders.
Wise said: "Brokers should be able to exploit the removal of legal aid to develop a portfolio of legal expenses provision, but it is entirely in their hands."
However, Peter Holding, a director of the Helphire group, said very few members of the public are aware that the government is cutting legal aid.
He forecasts higher sales of legal expenses cover in the longer run as an add-on to motor and household policies, but in the short-term he said legal expenses insurers must raise awareness of their products.
