Glossary of Industry Terms

Glossary of legal terms which you may come across whilst browsing our website:
After the event insurance (also known as ATE Insurance, Post Event Insurance, LEI Insurance ): An insurance policy purchased after a dispute has occurred, covering the legal costs in the ensuing dispute.
There are various types of ATE policies offering a range of cover options:

• Own side solicitor cost cover: This means insurance cover for the solicitor’s own base fees. Generally insurers prefer either the client or the solicitor to bear an element of the risk in the litigation, but we are able to secure both sides’ costs cover in certain circumstances.
• Own disbursement cover: Insurance cover for the client’s own disbursements, such as Counsel’s fees, expert fees, Court fees etc.
• Adverse costs Insurance: Insurance cover to indemnify the Insured in respect of their liability for the opponent’s costs in the event that the litigation is unsuccessful.

Before-the-Event Insurance (‘BTE insurance’): A legal expenses policy purchased before the event giving rise to a legal dispute has occurred. BTE insurance is often sold to private individuals as an optional ‘add-on’ to another insurance policy, such as a motor, contents or household policy. BTE insurance is also available to commercial policyholders, to cover the risk of the business becoming involved in litigation.

ATE Broker: TheJudge is a broker of ATE Insurance and Litigation Funding, including Third Party Funding.  Unlike an insurer or tied insurance agent (coverholder) TheJudge is independent and therefore provides completely impartial advice.
ATE Insurers: Insurance companies who underwrite After the Event insurance risks.  There are a number of insurers who write ATE insurance. TheJudge works with all the leading insurers and is therefore well placed to liaise with multiple ATE markets simultaneously on the client’s behalf. Ensure you carry out due diligence as to the security of any ATE insurer with whom you intend to incept a policy. At TheJudge, we can provide guidance (but can make no warranties) as to the security of the various insurers.
ATE Premium: The consideration that the Insured agrees to pay in order to obtain the insurance cover required. There are a variety of different types of premium and premium payment terms. The following represent some of the most common types of ATE premium:

• Self insured ATE premium: This means that the insurance company has agreed to insure the cost of the premium as part of the policy coverage. Therefore, in the event of an unsuccessful outcome, the insurance company will either reimburse the client for the cost of the premium (if the premium was paid at the outset) or will not seek payment of the premium (if the premium was deferred)
• Deferred ATE premium: This means that the premium does not need to be paid to the insurer at the outset and only becomes payable at the conclusion of the litigation.
• Conditional upon success ATE premium: This is means that the client has no premium to pay upfront and no premium to pay at all if the case is lost. If the case is unsuccessful, the insurer pays the claim up to the policy limit and receives no premium.

Limit of indemnity: The maximum amount that the insurer will pay in the event of a claim under the policy.

Top-up insurance: This is where a policy is purchased to top up an existing insurance policy. For example, an Insured may have a Before-the-Event (‘BTE insurance’) policy and the legal costs reach the limit of indemnity before the case has concluded. In those circumstances, the Insured can apply for an ATE insurance ‘top up’ policy.

Insurance Premium Tax (IPT): The amount of tax that is to be applied to the premium, currently 5% of the Gross premium payable.

Coverholder:  The term given to an insurance intermediary that carries out various functions on behalf of an actual insurer. It is important to note that such companies are not insurance companies and therefore do not have the financial security of an insurer, but merely act as agents for insurers.  Accordingly, it is important to ensure that any coverholder is fully authorised to act for the insurer and provides clear disclosure to insurers of the risks placed on their behalf.

Disbursement Funding: The term given to a finance company that loans a client money to pay for their interim disbursements cost in litigation.

Third Party Funding (also known as professional funding): The term given to a finance company that loans money to a client to enable them to pay for their interim disbursements incurred in the litigation.