After the event insurance - what does it cover?

• In its simplest form, ATE insurance covers the client’s liability for their opponent’s legal costs, whether that liability arises from a defeat at Trial, discontinuance or some other outcome, such as the failure to better a Part 36 offer for example.
• In addition, most clients also opt to insure their own disbursements, including Counsel’s fees. It is important to note that ATE insurance will not cover the client’s own disbursements on an interim basis, but only at the conclusion of the case in the event of an unsuccessful outcome.
• In certain circumstances, it may also be possible to negotiate cover for the client’s own solicitors’ fees, or a proportion of such fees. Once again, if own solicitors’ fees cover is purchased, the policy will only respond at the conclusion if the case is unsuccessful.   

Recoverable Premiums:

• In England & Wales, an After the Event insurance premium is, in principle, recoverable by the successful litigant as part of their costs from the paying party (Access to Justice Act 1999). Should an opponent challenge the recoverability of a premium, the specialist team at TheJudge will be on hand to provide independent expert evidence in support of the recovery. For more on premium recoverability, please click here.

Deferred and contingent upon success Premiums:

• Premiums are usually available on a deferred and self-insured (or contingent upon success) basis, which means that the premium is only payable at the conclusion of the case, and then only if the case is successful. If the case is unsuccessful, a claim can be made under the policy for the insured legal costs and the insurer does not collect a premium. ATE Insurers are therefore effectively speculating on the case succeeding in order to earn any income.

Premium discount for early settlement:

• ATE Insurance premiums will almost always have some form of premium discount factor built in. This means that the premium effectively increases, in line with the insurer’s financial risk, the closer the case gets to Trial. This means that the premium remains broadly proportionate to the cost exposure and provides the opponent with the incentive to settle the case early in order to face a reduced liability for the premium. 

It is normally the instructed solicitor or legal representative that makes the application for ATE Insurance, as opposed to the policyholder themselves. This is because the underwriters will inevitably want the lawyer’s views on certain aspects of the case, such as the key arguments, the legal issues, the prospects of success and the likely costs involved.

It is very important that independent expert help is sought when searching for appropriate After the Event insurance. TheJudge has been the leading independent ATE Insurance broker in this unique area of the insurance industry since 2000.

If you have any questions about After the Event insurance, or would like to discuss the insurance requirements of a particular case or client, please contact TheJudge or telephone 01903 22 78 65 and we will be happy to assist you.

Alternatively, if your firm or department would like us to visit you and provide comprehensive advice and After the Event training, click here.

For information on how to make an application for ATE insurance, click here.