A Supreme Court Costs Office ruling has removed a barrier to personal injury sufferers taking after the event (ATE) insurance.
Amelans partner Andrew Twambley said the Tilby v Pizza Perfect ruling meant the general public were now in the same position as they would have been, had legal aid been available.
"They don't have to fork out if they can't afford it," Twambley said.
In the case, Karen Tilby sustained whiplash when her car was hit from behind by a Pizza Perfect deliveryman. After securing a conditional fee agreement (CFA) with her solicitors, Amelans, and an ATE policy with Temple Legal Protection, she settled with Pizza Perfect out of court for £2,000 and payment of reasonable costs.
But the two parties could not agree the costs, including Tilby's ATE insurance premium of £367.50 - payable only if she won the case.
Pizza Perfect's lawyers argued that because the premium was due at the conclusion of the case, the agreement between Tilby and Temple was a credit agreement. They said the agreement did not comply with the various statutory requirements for consumer credit and therefore was not recoverable as a matter of law.
Senior Costs Judge Hurst ruled Tilby's ATE insurance contract with Temple was not a credit agreement. He said: "I am not persuaded there is, as yet, any normal insurance business practice, which requires the ATE insurance premium to be paid at the inception of the policy."
Twambley said people did not want to sign up for interest-charging loans of £1,500, to pay their premiums, with no guarantee of ever recovering that money.
He said the case might push personal injury claims specialists into other methods of funding.