In a world where financial uncertainties loom large and the landscape of litigation is ever evolving, After The Event (ATE) insurance has emerged as a critical tool for both claimants and legal professionals alike.
This type of insurance covers the insured against the risk of having to pay their opponent’s legal costs if they lose their case. In uncertain times, particularly in the wake of financial mis-selling scandals and evolving case law, ATE insurance is becoming increasingly vital.
The rise of financial mis-selling cases
Financial mis-selling refers to the practice of deliberately or negligently selling financial products that are inappropriate for the customer’s needs. Over the past decade, this has been a major source of litigation, with mis-selling scandals such as Payment Protection Insurance (PPI) and interest rate swaps in the UK making headlines.
These cases have underscored the importance of ATE insurance as an essential safeguard in financial disputes, and case law around financial mis-selling has shifted significantly, with courts increasingly siding with claimants who have been wronged by financial institutions.
And yet, whilst this trend is a positive development for consumers, it also means that defendants are more inclined to fight these claims vigorously.
This is where ATE insurance becomes crucial, offering claimants the confidence to pursue justice without the fear of overwhelming legal costs should they lose.
Why ATE insurance is essential in uncertain times
The global economy is currently facing heightened instability due to a range of factors, such as geopolitical tensions, inflationary pressures, and the after-effects of the COVID-19 pandemic.
Financial mis-selling claims have surged as a result of this economic uncertainty, with businesses and individuals seeking recourse for ill-advised financial products sold during times of instability.
In these uncertain times, ATE insurance offers several key advantages, such as:
Providing protection against adverse costs
ATE insurance is particularly important in financial mis-selling cases because these disputes often involve large, well-resourced defendants such as banks and financial institutions.
In these cases, the claimant is not only responsible for their own legal fees but also for the costs of the opposing side if they lose the case, however, with ATE insurance, claimants are protected from the risk of having to pay substantial legal costs, allowing them to proceed with litigation without fear of financial ruin.
Levelling the playing field
Financial institutions typically have deep pockets and the means to mount robust defences. For individual claimants, this can make the prospect of litigation daunting, although, ATE insurance helps level the playing field by covering the claimant’s legal fees, enabling them to engage top-tier legal representation and pursue their case with confidence.
This is particularly important in financial mis-selling cases, where complex legal arguments and expert testimony are often required.
Facilitating access to justice
Without ATE insurance, many claimants would be unable to afford the costs associated with litigation, particularly when taking on large corporate entities.
ATE insurance promotes access to justice by enabling individuals and smaller businesses to pursue claims they would otherwise be forced to abandon due to the financial risks involved, and this has been especially important in financial mis-selling claims where many victims may not have the resources to challenge well-funded financial institutions on their own.
Mitigating financial uncertainty
The global economic environment remains unpredictable, and litigation can be a lengthy and expensive process, though ATE insurance offers peace of mind by providing financial protection against the risk of losing a case and being ordered to pay the other side’s costs.
For claimants dealing with financial mis-selling, this mitigates the financial uncertainty involved in pursuing a legal claim, allowing them to focus on the merits of their case rather than the potential financial fallout.
Financial mis-selling and the role of ATE insurance
The PPI scandal serves as a prime example of how ATE insurance has played a crucial role in enabling consumers to hold financial institutions accountable for mis-selling, where many claimants were able to seek compensation thanks to ATE policies that covered the risk of adverse costs. The truth is that without such coverage, these individuals would have faced significant financial barriers to pursuing legal action.
More recently, interest rate swap mis-selling has become a focal point for litigation also, where many businesses were sold complex financial products that they did not fully understand, leading to significant financial losses when interest rates fluctuated.
As with PPI, these cases often pit small businesses against large financial institutions, and ATE insurance has been critical in allowing claimants to pursue compensation without the fear of adverse costs.
But ATE insurance also plays a significant role in collective actions, where groups of claimants band together to pursue a claim against a defendant. In these cases, the financial stakes are often high, and the potential for significant legal costs looms large.
Here, ATE insurance provides the necessary security for claimants to proceed with confidence, ensuring that financial mis-selling cases can be pursued even when the financial stakes are considerable.
The future of ATE insurance in financial mis-selling cases
In today’s uncertain financial climate, ATE insurance offers crucial protection for claimants involved in financial mis-selling cases, and by providing coverage for adverse costs, ATE insurance ensures that individuals and businesses can pursue claims against large financial institutions without fear of financial ruin.
As case law continues to evolve and new mis-selling scandals emerge, the importance of ATE insurance in facilitating access to justice will only increase.
For claimants seeking redress for financial mis-selling, ATE insurance is an indispensable tool in navigating the legal landscape, and we’re proud to say that amberis is here to help.
We do ATE Insurance the right way
amberis are a truly independent FCA regulated insurance broker working with industry leading insurers to create bespoke ATE solutions which are best suited to meet the protection needs of solicitors and their clients.
Our 20 years’ experience has allowed us to build prosperous relationships with a range of commercially aware, highly trusted insurers, and our areas of expertise include personal injury, civil litigation, financial mis-selling, group litigation and energy misrepresentation.
With amberis, you can rest assured you’re working with the best. Our underwriters are credible, UK domiciled and regulated by FSCS, with a high claims payment ratio and willing to communicate and engage with our customers directly.
As a result, we’re able to offer a unique and flexible approach to ATE insurance, and we can work seamlessly alongside your team as a strategic partner.
