We speak to numerous law firms who want to grow their practice and increase the amount of quality cases they work on but too often there are limited resources (usually time) to make this happen. There is a simple, tried and tested solution to this problem that is now easy to access here on Australian soil and does not cost a cent in marketing budget.
Convert up to 35% more instructions into legal claims
It is common for solicitors to miss out on a high % of cases that are brought to them due to the potential adverse cost risk and/or wider financial risk to the plaintiff. An estimated 35% of plaintiffs with a strong legal claim do not end up pursuing the claim because of this financial risk.
ATE insurance transfers the financial risks of a legal dispute by removing the adverse cost risk for the plaintiff and can be extended to include own disbursement cover and an element of own costs. Therefore, if the solicitors in your firm are spending valuable time on taking instructions which don’t result in pursuing a legal claim due to financial risk, having easy access to an ATE policy for these clients can produce elevated conversion rates. No budget needed, one informed conversation with the client is all it takes.
Missed opportunities caused by industry’s biggest misconceptions
Misconception 1 – ATE Insurance is only for people who can’t afford adverse costs
ATE Insurance is a means of transferring or mitigating risk. It is just as much for clients who can afford to pay adverse costs as can’t afford to pay.
For businesses, it can remove a legal dispute from their balance sheet in part or entirely and turn a cost centre into a potential profit centre for your client. By having an ATE solution in place, risk can be transferred for both own costs in pursuing the claim and the possibility the company may be ordered to pay its opponent’s legal costs if unsuccessful. In the absence of an insurance policy, the legal action must be recorded in formal accounting entries as a potential liability, therefore staying on the balance sheet.
ATE insurance has been used as ‘security for costs’ instead of making a cash payment into court or using a bank guarantee, avoiding tying up capital for an unknown length of time.
Misconception 2 – ATE Insurance is only for large or funded cases
ATE insurance can be used in conjunction with Third Party Litigation Funding (TPF) or for high value cases. TPF is not a prerequisite of obtaining cover nor does the case value need to be seven figures. There are policies in place for both funded and unfunded cases. If a law firm portfolio policy is in place, same applies, these can cover cases whether a TPF is involved or not. If a matter is funded, an ATE insurance policy often forms part and parcel of the agreement. Even though a funder has capital to pay an adverse costs order if one was made, they often prefer not to take the risk.
In circumstances where there is a volume of cases, an ATE scheme could be arranged. For example, a Personal Injury Law Firm with a Motor Vehicle Accident ATE cover. The level of cover could be as little as $100,000, with the premium coming in as low as $1,000 plus taxes per policy. On the flip side of that, arranging cover for complex commercial disputes worth several million dollars, is common practice. Policies can be arranged with a fully contingent premium, upfront or a combination of the two depending on the individual circumstances. Therefore, there is little reason not to explore this resource for your clients.
Misconception 3 – ATE applications are time consuming
Working with a highly experienced broker, like Vie Legal Insurance could save substantial amounts time.
Understanding how to present a case to an insurer for cover is important. Which insurance companies need what supporting documentation? Advice from counsel or a brief case summary? What are the turnaround times and step by step guide for a smooth process? Are disbursements costs covered and what premium is payable? Can I obtain multiple quotes?
Vie will help you obtain and compare quotes from insurers. Vie can also assist law firms in sourcing scheme disbursement funding, WIP funding and/or funding for individual clients. Consequently, saving your firm’s valuable resource, time.
If you are a commercial litigation law firm with clients who have an ongoing or potential legal claim for a monetary reward, a simple and easy way for you to grow your firm without any additional marketing effort is available to you with one call.
We understand each firm has specific, individual needs therefore if you would like a no-obligation consultation call to discuss these needs, simply book a convenient time in the calendar with our expert advisors.