Most lawyers will know about the landmark Court of Appeal decision in Callery v Gray. The Court confirmed it is reasonable for clients to enter into a conditional fee agreement (CFA) and to take out after-the-event (ATE) costs insurance before proceedings are commenced; insurance premiums are recoverable from the losing party, subject to an assessment of the reasonableness of the premium; and the cost of insuring the premium itself and the insurance premium tax are, in principle, recoverable.
But many lawyers are under the impression that CFAs and ATE insurance are only relevant for personal injury and Road Traffic Act type cases. Commercial clients with business disputes need to be advised that their legal costs could be ring-fenced.
