What you need to know and do to apply for Commercial ATE Insurance

What is Commercial "litigation" After-the-Event insurance?

​

In the UK and many other jurisdictions, recourse to the law for civil and commercial or business disputes is very expensive and uncertain.

 

A claimant is often exposed to not only their own legal costs and expenses but also to opponent’s costs should the claim lose or discontinue.

 

After-the-Event insurance covers the legal costs and expenses of legal action up to a sum insured, or limit of indemnity, and insurers will pay a valid claim if the outcome of the claimant’s litigation is unsuccessful.

 

Why use After The Event Insurance?

​

​

​

​

​

​

​

​

​

​

​

​

​

​

So what does ATE Insurance Cover?

​

Most After The Event Insurance policies cover the legal costs and expenses that a claimant would have to pay if a legal action is lost or discontinued.

​

These may include:

​

• Own disbursements, such as expert reports and court fees.

• Own counsels fees if requested.

• Opponents costs.

• Partial own sides solicitors fees if requested. 

• Limit of indemnities from £25,000 to £10,000,000.

​

Do I have to pay for After The Event Insurance?

​

Unfortunately yes. Up until 2013 ATE insurance premiums were recoverable from the losing party as an additional liability they had to pay. But following the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, (LASPO), most ATE insurance premiums are now no longer recoverable, and must be paid for by the claimant either out of their damages recovery, or from alternative resources.

​

What ATE premium terms are available? 

 

Our partners can secure preferential premium terms, including fully deferred and contingent, meaning you do not need to pay any premium until the conclusion of your claim, and only then if your claim is successful. Clients whose claim is unsuccessful, do not pay.

​

Other premium methods can included part paid up-front and part deferred, fully paid up-front, staged and discounted. There are many methods now available to help with your own circumstances.

​

How much does a Commercial After the Event Policy cost?

​

ATE underwriters base their premiums on risk, and so they look at the chance of having to pay out, along with the maximum amount they would have to pay out in the event of a claim. Then they would add a margin for their own costs, expenses and profit, thereby producing the final ATE insurance premium. (IPT tax would also be added).

​

The higher the limit of indemnity you seek, the higher the price will be. Other factors influencing the overall premium could include at what stage your claim is at in the legal process, the closer it is to trial, the more expensive it will be. The type of dispute could also have a bearing on cost, as can the law firm and counsel being used. 

​

As a very rough guide, expect to pay between 25% - 50% of the limit of indemnity for cases at or near issue, and more if they are closer to trial.

​

​

​

​

Why should I apply for ATE Insurance at the start of my legal action?

​

ATE Insurance is purchased after an incident has taken place, but usually before any significant legal costs or disbursements have been incurred. Securing ATE insurance at the start of your legal action gives you the best chance of getting it at the lowest price.

 

Leaving it later in the legal dispute may mean the cost of your ATE insurance policy is much higher, or it can mean that you are unable to purchase it all at. For example securing ATE insurance a few months before trial is a near impossible task.  

​

Our Partners Core products include:

​

• After the Event legal expenses insurance (ATE) 

​

• Deeds of Indemnity – Insurers provide Deeds of Indemnity or non-avoidance clauses to satisfy a Security for Costs award in the courts. We can assist in obtaining these deeds to ensure your insurance policy stands up to scrutiny.

​

• Cross Undertakings in Damages Insurance – Insureds are covered in the event that a freezing order or arrest of a vessel is deemed ‘illegal’ and the opponent is awarded compensation for loss of use of their assets. We can provide cover for both legal costs and damages.

​

• Defendant ATE Insurance – Although ATE is generally geared towards protecting the claimants’ position, we can also assist helping clients who find themselves on the receiving end of an unmeritorious claim. Policies can be extended to include damages as well as legal costs. Cover can be provided up to £5M+ and premiums are paid at inception.

​

• Portfolio or Work in Progress (WIP) Insurance – is a unique hybrid of ATE insurance which insures solicitors’ Work In Progress on an aggregated basis across a portfolio of claimant litigation where the solicitor is at risk for their fees under Conditional Fee Agreements, Damages Based Agreements, or similar. We work on both the firm and Claimants’ behalf providing credible options of protection. Sums insured of £5M+ can be arranged with premiums typically contingent upon the realisation of the portfolio’s performance.

​

Top Tips on how to apply for ATE Insurance

​

 

​

​

 

 

​

​

​

​