Top-up legal expenses insurance cover with premiums that can be recovered after 1 April are being sold for just £1, the Gazette can reveal.

After-the-event (ATE) insurer Keystone Legal is offering a product for cases insured by other legal expenses insurers that run out of cover, or where continued support is declined, after the Jackson reforms come into force.

Currently, the ATE premium for a successful claim can be recovered from the losing defendant, but that privilege will disappear from 1 April.

Anthony Mowatt, chairman of Keystone Legal, said the product was designed to address the ‘unintended consequences’ of civil litigation reforms rather than undermine them.

He said it was unfair that even a modest proportion of existing claimants with a claim open before 1 April should be exposed to significantly increased ATE premiums post-Jackson. Paying a nominal sum for supplementary top-up cover would protect them from that possibility, he said.

Clients who need extra cover would also miss out on the planned 10% increase in general damages because their case started before 1 April.

‘This gives solicitors and their clients an option to get additional indemnity on a case that is already under way,’ Mowatt said.

‘We’ve sought advice about this and we’ve read the rules very carefully – it is compliant in terms of recoverability, although I’m sure the defendant is likely to challenge it.’

Mowatt said the firm had not placed a limit on the number of £1 premiums it could process before 1 April.