After-the-event (ATE) insurance premiums are being increased because solicitors are not advising clients to buy the products, according to a study.
The study, commissioned by Allianz Cornhill Legal Protection (ACLP), found that a "significant" number of solicitors failed to advise clients to take out ATE insurance cover when they were pursuing a claim.
This, argued ACLP, not only increased the risk to the consumer but also led to increased premiums.
Peter Dobie, ACLP underwriting director, warned that by doing this solicitors were "upping the risk value of premiums", so fuelling a rise in premium prices.
The research also revealed concerns over before-the-event (BTE) insurance. It found that some solicitors did not ask whether clients held a BTE policy because a valid policy could render their services useless.
Mounting layers of regulation had also become a worry, the research found. Dobie said there was confusion about compliance with the different regulators involved in the ATE market.
Failure to understand compliance practices could leave holes in standards, the research showed.
"It is debatable whether anything being done by the government will clarify the position of solicitors," Dobie said.
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