§ Mr. DismoreTo ask the Parliamentary Secretary, Lord Chancellor's Department what plans he has to ensure that after-the-event insurance premiums recoverable against a losing party will relate only to the risk against incurring a liability in a proceedings and not to financing or marketing expenditure; and if he will make a statement. [111654]
§ Mr. LockIn its recommendations to the Civil Procedure Rule Committee the Government made clear their wish that rules of court relating to success fees under conditional fee agreements or litigation insurance premiums should provide that only the element relating to the risk that was being covered should be recoverable. A recoverable success fee or insurance premium, in the Government's view, should reflect the related business overheads including, for example, the cost of marketing the services or products concerned. It would be neither desirable nor practicable to attempt to identify and exclude particular elements of normal overhead costs from success fees or insurance premiums.
The Government have also made clear that they do not believe that the costs relating to financing a case, such as actual or notional interest or credit charges, should be recoverable whether as part of the premium or the success fee.
966WIt is, however, for the Civil Procedure Rule Committee to decide what detailed rules of court are needed to govern the recoverability of success fees and insurance premiums.