Matthew Williams answers the following question: Can After the Event Legal Insurance (ATE) be available for an arbitration claim?

1. Calling all
Alternative
Business
Structures:
Have your say
The Legal Services Board will shortly be launching a survey of
all alternative business structures (ABS) to understand more
about how they operate, the use of external investment, and
their views on regulation. We explore why it’s important that
your business responds.
n 6 October 2011, ten years since the idea was first
proposed, a law firm was granted the first ABS licence
in England and Wales. A licensed conveyancing firm was
granted an ABS licence to provide ‘reserved instrument activities’ in
conveyancing, regulated by the Council for Licenced Conveyancers.
Five years on from that and there are now nearly 800 ABS,
regulated by the Solicitors Regulation Authority, the Council for
Licensed Conveyancers, the Institute of Chartered Accountants
of England and Wales, and the Intellectual Property Regulation
Board. They provide services in all parts of the legal services market
and to a wide range of legal services users. This represents a slow
revolution in how legal businesses structure themselves.
Building on a survey of ABS we conducted in 2013, we are seeking
to understand the views and experience of this diverse group
of businesses. We already recognise the many positive benefits
that ABS have brought to the legal services market in terms of
innovation, customer services, and strategic thinking.
However, while some in the sector continue to focus on the
risks of ABS, there is more that needs to be done to illustrate
the benefits of involving non-lawyers in the management and
ownership of law firms.
The LSB has a strong track record of using its research findings to
drive change in the regulation of legal services. For example, we
used the findings of the 2013 survey of ABS to support changes
in the SRA ABS licencing process, and our joint research with the
SRA on innovation in legal services resulted in them developing
SRA Innovate - http://www.sra.org.uk/solicitors/innovate/sra-
innovate.page. These examples demonstrate the benefits of
participating in research to help shape future reforms.
Want to take part?
Your business will shortly receive an email invitation to participate
in the survey and a link to the survey online. This email will be
addressed to your head of legal practice or head of finance.
We estimate that the survey will take around 10-15 minutes to
complete. If you want to register your interest or haven’t received
an email please contact robert.cross@legalservicesboard.org.uk
Robert Cross, Project Manager (Research), Legal Services Board (LSB).
Can After the
Event Legal
Insurance
(ATE) Be
Available for
an Arbitration
Claim?
TE has evolved from a product that was predominantly
used in combination with conditional fee agreements to
facilitate the bringing of personal injury claims, to one
that is now used in a much wider range of disputes, including
commercial disputes, both national and international.
Parties increasingly have options available to them on funding
and cover, and another option may relate to the forum for
determination of a dispute. Commercial agreements are likely to
include a dispute resolution clause. Parties often opt to arbitrate
(rather than litigate through the courts). There can be various
reasons for that, one of which may be a desire to keep a dispute
confidential. Alternatively, arbitration may be the appropriate route
for international disputes as provided for by treaty etc.
The relevant arbitration rules are likely to give rise to the potential
for cost shifting at the arbitrator’s discretion. That in turn gives
rise to applications for cover for adverse arbitration costs. An
arbitration process can have similarities to a court process, but
there are also differences. For example, selection and makeup of
the arbitration panel/arbitrator, significantly limited potential for
appeal, and a lack of a cost assessment process. Insurers will take
these and other factors into account when deciding whether, and
at what price, to offer terms.
The recent decision in Essar Oilfields Services Ltd v Norscot
Management Pvt Ltd[2016] EWHC 2361 (Comm) is of interest.
The arbitrator decided section 59 of the ICC rules allowed him a
wide discretion to determine and award ‘other costs’. Exercising
that discretion on a fact specific basis, he included in an award
the costs the claimant had incurred on third party funding and the
success fee. That decision went in a polar opposite direction to the
recent changes in the law on recoverability of ATE premiums and
success fees in the courts. The award was challenged on the basis
it was said to be outside the tribunal’s powers but was upheld on
appeal. If the rationale in Essar is followed, there appears to be no
reason why an award could not in principle include the cost of an
ATE premium. It remains to be seen what developments there will
be. Watch this space!
Matthew Williams, Head, AmTrust Law.
O
A
December 2016 Modern Law 23
EDITORIAL BOARD