In insurance, ATE stands for “After the Event”. It’s a type of Legal Expense Insurance which is purchased only after the event which led to the claim has taken place. This is normally at the start of, or sometimes during, the litigation process. In conjunction with “No Win, No Fee” Agreements, the insurance is designed to protect the claimant from the legal costs and disbursements if the legal action is ultimately unsuccessful.
The associated legal costs and disbursements are usuallysuch things as costs towards expert reports, court fees, legal counsel and even the other party’s legal costs which a claimant would be liable for if their claim was not successful.
Why do I need ATE insurance?
Whilst it’s not a legal requirement to take out ATE insurance, it is the responsibility of your solicitor to investigates ways in which you may be able to fund your legal action. Rarely can clients afford to pay the fees upfront, so Legal Expense Insurance is often the appropriate choice.
Legal expense insurance can exist as add-ons to home insurance or car insurance (BTE) but often it is limited in terms of the types of legal actions they cover, and the limit of indemnity provided.
ATE is available to clients at the start or even during the legal action and will be designed to deal with the specific features and risks related to the legal action. As a result, it is often recommended by solicitors as the best solution to progress with your claim.
The ability to insurance the adverse risks of litigation is the primary mechanism for solicitors to be able to provide a ‘no win no fee’ agreement, as it ensures that if a claim is unsuccessful, the insurance will cover the other parties’ costs, as well as any expenses solicitors need to pay when building the case.
What does ATE insurance cover?
ATE insurance policies typically cover the disbursements required to progress your legal action but also the other sides costs for defending the case if your legal action is ultimately unsuccessful.
If you are successful, these elements are considered “Recoverable”, which means they are normally paid by the defendants as part of the settlement.
These can include court fees, expert report costs, investigation costs and barristers fees.
There are also time costs attributed for the defendant’s legal representatives for defending the Legal Action. In the event your legal action is unsuccessful, the other side will expect these to be re-paid.
ATE insurance provides protection for these adverse costs also.
When should ATE insurance be taken out?
ATE insurance is taken out after the event has taken place and as early as possible in the litigation process to ensure the best possible coverage and price.
It is possible for ATE policies to be arranged at any later stage of the case, but this can be difficult and expensive to secure as the process moves forward.
Who can purchase ATE insurance?
Any person involved in a legal action can purchase After The Event insurance, subject to the merit, although it is far more uncommon for defendants.
It is an SRA requirement for solicitors to explore all funding options available to that client in order to finance the litigation. This includes any existing BTE policies within house / motor insurance policies. In the main, these policies can be very limiting and restrictive and could cause issues further down the line.
It is their role to advise the client on the best course of action, which is often ATE as it is designed for the very specific litigation they are pursuing.
ATE policies must be arranged through your legal representative, as it is extremely uncommon for Insurers to operate on a direct to client basis. Solicitors receive special exempt professional status from the Financial Conduct Authority to provide advice about insurance products due to their own regulation by the Solicitors Regulation Authority.
How much does ATE insurance cost?
The cost of an ATE insurance policy depends on a number of factors, including type of legal action, assessed risk and fees required to reach conclusion. Often, low value claims of a similar nature can be grouped into what is termed a “scheme”. This is where the general risk is shared amongst all policy holders and follows a general insurance principle of “the successes of the many pay for the losses of the few”.
As it is difficult to tell which cases will succeed and at which stage of litigation, all policies should be incepted at the outset of the legal process. The result is a much lower premium price point for every claimant and much faster policy inception.
When is ATE insurance paid?
Most ATE insurance policies operate on a deferred payment basis meaning there is no upfront fee to pay when taking out a policy. It’s paid for after the claim by deducting the amount from the damages awarded or a small amount of circumstances it can be recovered from the defending party.
However, it could often be payable upfront by a litigation funder (if one is being used) which reduces premiums as the credit risk to the insurer is removed.
Is anyone applicable for ATE insurance?
ATE insurance is available to both claimants and defendants (although it is far more common for claimant parties), generally when there is no fixed recovery rate, and it can cover any type of litigation where there is financial risk, such as clinical negligence cases, commercial disputes and also personal injury claims.
Your solicitor, however, will be able to confirm whether ATE insurance is available, and any potential limitations with purchasing it.
ATE insurance – done the right way
As a truly independent FCA regulated insurance broker, amberis works with industry leading insurers to create bespoke ATE solutions which are best suited to meet the protection needs of solicitors and their clients.
Our areas of expertise include personal injury, civil litigation, financial mis-selling, group litigation and energy misrepresentation, and our 20 years’ experience has allowed us to build prosperous relationships with a range of commercially aware, highly trusted insurers.
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.
