Recession prompts use of CFAs to sue for financial losses
Lawyers have increased their use of conditional fee agreements (CFAs) and after the event (ATE) insurance to take cases against financial firms for wrong or negligent advice to consumers the, Times reports.
It quotes Rocco Pirozzolo, a senior underwriter at ATE provider QBE, as saying: “Our insurance enables claimants to bring claims they would otherwise never dream of bringing against a deep-pocket opponent. Defendants have to focus on the merits of claims because they can’t just financially out-muscle claimants.”
It also quotes Anthony Maton, a financial litigation specialist with lawyers Hausfeld, who said: “Traditionally, firms have been inhibited from pursuing this kind of legal work either because they might have a conflict of interest with a bank, for example if they were on one of its panels, or because they wanted to keep on its right side in the hope that they’d get some of its corporate work. But as the recession has worsened, increasing numbers of lawyers have seen an opportunity to move into this field.”
