ATE Sector Update

RTA (Road Traffic Accidents)

RTA has previously been seen as the ‘bread and butter’ of the ATE market, but this is no longer the case. And, whilst RTA claims make up the largest proportion of our ATE market at Prosperity Insurance, we have seen a drop in overall numbers, due to the government’s Whiplash Reform Programme and introduction of the OIC portal. 

Due to compensation awards for whiplash injuries now being prescribed, there is much-reduced demand for ATE in this sector. 

Movement in motor litigation and group action

The Volkswagen NOx Emissions Group Litigation was granted in 2020 and brought a large number of claims in, which could see more group actions come into play and a shift in ATE providers getting involved to provide cover. For example, the group action for the data breach at EasyJet is currently underway and likely to affect the ATE sector. 

Housing Disrepair

Changes in the law through the Homes (Fitness for Habitation) Act 2018 broadens the scope of these claims for the ATE sector, as tenants can now sue private landlords for disrepair if their home is not kept ‘fit for human habitation.  Whilst at Prosperity Insurance we only cover Housing Disrepair claims for public landlords, we are nevertheless still seeing an upward trend in this area.

Clinical Negligence

We still deal with a significant number of clinical negligence claims, which take longer to settle than ATE claims within other sectors, due to their complexity. 

There is a rise in the clinical negligence claim sector overall and the NHS Resolution’s annual report for 2021/22 itself shows a 13% increase in claims between 2021 and 2022. However, potential government reforms on fixed recoverable costs are likely to curb this increase if implemented in the upcoming years. 

Noise-Induced Hearing Loss Claims (NIHL) and Industrial Disease Claims

Claims for noise-induced hearing loss and industrial disease are in steep decline since working conditions have largely been improved via the Noise at Work Regulations 1989 and other subsequent reforms. 

It’s increasingly unlikely that either industrial disease or NIHL can be linked to exposure in the workplace after the early 1990s, coupled with the fact that the available pool of claimants is decreasing. 

Additionally, due to the age of most claimants for NIHL, medical experts are potentially likely to decide that hearing loss for NIHL claims is ‘de minimus’, and a result of natural age deterioration. 

Financial Misselling

As a result of the Plevin case, opening the door to a large group of claimants for compensation due to missold PPI, Prosperity Insurance saw an increase in these claims coming through for ATE.  

However, the recent case of Smith v RBS has slightly curtailed the number of claims as it clarifies the point at which limitation runs – crucially that primary limitation starts when the unfairness by the lender to the consumer ends – not when the relationship between consumer and lender ends. 

Although Plevin was the catalyst for claimants seeking redress for unfair PPI, demand will ultimately die down in this area for ATE in the not-so-distant future. 

Employers’ Liability and Occupiers’ Liability Claims

At Prosperity Insurance, we are continuing to see a steady influx of these claims come in for ATE. Unlike other ATE claims, which are relatively quick to conclude and settle, such as RTA claims, these claims take longer, often requiring medical evidence and expert reports. 

Unless there are drastic legal reforms in this area, we anticipate the continuation of a sizeable number of claimants who require ATE.

Data Breach / GDPR (General Data Protection Regulation) claims

GDPR, is an EU regulation implemented into UK law through the Data Regulation Act 2018, introducing data protection laws and with it an area of litigation for claimants who endured any breach of their private data. 

We are seeing this as a growing area of litigation, with a small but steadily rising number of ATE policies sought. This is partly due to the fact that, currently, ATE premiums are recoverable from the defendant if the claim is for misuse of private information and breach of confidence, which incentivises solicitors to obtain ATE. 

However, now the UK is no longer in the EU, it is no longer bound to the GDPR and the government is looking to reform the law in this area. Plans to implement a new Data Reform Bill were detailed in the Queen’s speech this year and are imminent. 

It will be interesting to see what impacts the changes in data reform will bring and what impact they will have on private litigation in this sector, and the recoverability of ATE premiums.   

Commercial and Insolvency

At Prosperity Insurance, we indemnify commercial and insolvency cases on a case-by-case basis, for which we are seeing a small but steady flow for ATE insurance, which we anticipate will continue. 

ATE indemnity insurance at Prosperity Insurance

We provide ATE indemnity insurance for all these areas of litigation, led by a team of highly experienced underwriters and solicitors. 

If you need to mitigate the risks involved in litigation, we can help by providing competitive rates for ATE insurance with fully deferred premiums.

For more details, we are delighted to talk to you directly at 0800 524 4235, or you can email us at info@prosperityinsurance.co.uk.