In this After the Event (ATE) insurance case, the court provided further guidance on when actual damage was suffered in a tortious claim.

The defendants were panel solicitors responsible for vetting claims pursued under an ATE scheme. Claims accepted had to have at least a 51% prospect of success and be for at least £1k. The scheme was a disaster and AXA alleged that the defendants had failed to vet the claims properly.

The court had to consider the issue of when the cause of action arose. It held that claims where the policy incepted more than six years before proceedings were issued were time barred. Actual loss arose when insurers were committed to the flawed transaction rather than when the underlying claim “failed”. The liability was not contingent – insurers’ exposure to a greater risk could constitute actual loss.