ARAG ATE policy safeguards claimant

On the 18th January 2013, the High Court overturned an earlier judgment that an ARAG ATE policy was not good enough security for costs.

The bespoke wording expressly stated that the policy would only be void should there be fraudulent non-disclosure (and not for innocent or negligent non-disclosure), and even if there was, the cancellation provisions expressly stated that ARAG would be liable for costs up to the date of cancellation, so minimising any risk to the defendants costs.

The case was not the type to have an adverse verdict at trial, as it centred on technical issues rather than contentious facts, and so there was no commercial reason why the claimant would wish to jeopardise the policy by not complying with its terms. Quite simply, the policy was for the claimant’s own protection.

This case clearly shows that defendants will use the ATE policy as a way of making life difficult for the claimant, but fortunately in this case, the claimant had an ARAG policy that provided the safeguard for the claimant should they lose, and likewise for the defendant.

Permission to appeal has not been granted as yet, and the claimant was awarded the costs of the application.

Big news for small businesses

The banking world has been in the dog house for a while now but a new initiative from the Financial Services Authority (FSA) looks to keep them there for a bit longer. Another mis-selling scandal has emerged in relation to the sale of interest rate swap products to small businesses.

According to an article in the Independent interest rate swaps are “complicated derivatives that have been sold as protection - or to act as a hedge - against a rise in interest rates”. The FSA have identified that more than 90% of the products were mis-sold to the small business sector accumulating to an estimated “total [of] as much as £1.5 billion across the sector”.

As a result of the mis-sold product many small businesses are left with hefty bills, however the FSA has set out a framework for the banks to provide compensation. As quoted in the Telegraph, Vince Cable sets out that “the immediate priority is to ensure small businesses are not driven out of business by banks pursuing liabilities for swaps that they mis-sold”.

With this in mind, ARAG can provide your small business customers with the means to pursue the compensation that they are entitled to with the support of Recourse After-the-Event insurance.