The High Court's chief costs judge's decision on the Claims Direct test after-the-event (ATE) cases was a step in the right direction, the Forum of Insurance Lawyers (Foil) said.

Foil president Tim Wallis said clarity was emerging in the ATE market, but warned that the recent judgment was "not the end of the road".

He added that the judge said there was a far greater problem in the guise of the ratio of costs to damages in simple claims.

The judge also noted, as did Lord Hoffman in Callery v Gray, that the "Civil Justice Counsel initiative is ongoing to try to resolve the wider costs problems", Wallis said.