Glossary of Terms
Please find below a list of terms which you may come across whilst using our website, and their general meanings.
After the Event insurance (sometimes also known as ATE insurance, Post Event Insurance, LEI Insurance)
An insurance policy purchased after the event giving rise to a legal dispute has occurred, covering the legal costs in the ensuing dispute.
ATE broker
TheJudge is a broker of insurance and funding products. Unlike an insurer, funder or tied insurance agent (see “Coverholder”) TheJudge is independent and therefore provides entirely impartial advice
ATE insurers
Insurance companies who underwrite after the event insurance risks. TheJudge works will the leading insurers in the industry 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 accept 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 (see Deferred premium, Self insured premium, Contingent/Conditional premium, Rebated/Staged premium, Upfront Premium)
Adverse costs insurance
Insurance cover to indemnify the insured client in respect of their liability for the opponent’s costs in the event that the legal action is unsuccessful.
Before the Event insurance (sometimes also known as BTE insurance or pre-existing legal expenses insurance)
An insurance 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 other insurance products such as motor insurance or home insurance. BTE insurance is also available to commercial entities, to cover the risk of the business becoming involved in litigation.
Contingent/Conditional premium
An ATE premium which is dependent on a successful outcome of the insured risk. These types of premium are only payable in the event that the insured has met the definition of success under the applicable policy. In the event that this definition of success has not been met, the premium is not payable.
Conditional Fee Agreement (or ‘CFA’)
An arrangement between a law firm and a client whereby the law firm agrees to defer an element of their fees to the conclusion of the legal action, with the same only becoming payable if the legal action is successful. The client can usually seek to recover the success fee which the law firm charges in return for this service (in England and Wales), from the losing party.
Contingency Fee Agreement (sometimes referred to as an Alternative Fee Agreement)
An arrangement between a law firm and a client whereby the law firm agrees to defer an element of their fees to the conclusion of the legal action, with the same only becoming payable if the legal action is successful. The success fee which the law firm charges in return for this service is usually an agreed proportion of the damages/compensation awarded or agreed.
Coverholder
The term given to an insurance intermediary that carries out various functions on behalf of the 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.
Deferred premium
An ATE premium which is payable at the conclusion of the insured risk. This type of premium is not payable at the inception of the policy.
Disbursement funding
The term given to a finance company that loans a client money to pay for their interim disbursements costs in litigation.
Insurance Premium Tax (or ‘IPT’)
The amount of tax which is applied to the ATE premium, currently 6% of the gross premium payable.
Limit of indemnity
The maximum amount which the insurer will pay in the event of a claim under the policy.
Litigation Containment Insurance (sometimes also known as Defendant Outcome Hedging, Stop Loss, Litigation Buyout Insurance)
An insurance policy typically used by defendants in legal actions whereby the insured client will retain an element of risk (often known as an “excess” or “retention”) and the insurer will agree to cover anything exceeding this.
Portfolio Facilities
An arrangement between a law firm or an insured client, and an insurance provider whereby preferred terms and premium rates are provided in respect of insurable cases in return for a guaranteed volume of work.
Rebated/Staged premium
An ATE premium which is discounted in the event of an early settlement of the legal action. Alternatively, the ATE premium may increase at certain stages, as the legal action continues unsettled.
Recoverability support
The support which TheJudge and/or the insurance providers with whom we work will provide to the law firm and the insured client in the event that the paying party challenges the reasonableness of the ATE premium, either verbally or in writing.
Self insured premium
An ATE premium which is insured by the insurer in the event that the legal action is unsuccessful. Policies which include a self insured premium will not require the client to pay the premium in the event of an unsuccessful outcome to the legal action, as the insurer includes this risk within the policy.
Upfront premium
An ATE premium which is payable at the point of the policy being accepted.
Third Party Funding (sometimes also known as Litigation Funding, Litigation Financing, Professional Funding)
The term given to the funding of the legal action by a financing company which supplies cash flow to the client to enable them to fund the interim legal costs incurred.
