Liability insurers in the after the event legal expenses market could be forced to pay for policies taken out before proceedings begin if a dramatic ruling is allowed to stand.
Manchester-based solicitors Amelans this week won its test case for payment against the former CGU before a specially convened hearing of Chester County Court.
It means that Amelans can now collect on its Temple Legal Protection policies contested by CGNU even if they were issued while proceedings were being “contemplated”.
Partner Andrew Twambley hailed the ruling as “a victory for the common man against oppressive insurers”.
The ruling could break the deadlock which has plagued the after the event legal market as insurers refused to pay out on policies taken out before proceedings.
Foil president Andrew Parker said he was disappointed by the decision but did not think it would set a binding precedent as Amelans claimed.