From hiring a lawyer to court fees and other expenses, taking legal action is quite expensive. This is where ATE insurance comes in handy. With After the event insurance you can have peace of mind that your legal expenses will be covered if you lose your case.
But how does ATE insurance work? Who needs ATE insurance and what are the benefits of having it? In this blog, we’ll answer these questions.
What is after the event insurance
In short, ATE insurance is a type of insurance that covers the costs of legal disputes or lawsuits, such as court fees and legal expenses. It’s often used in situations with a high risk of losing the case and incurring high costs.
ATE insurance helps to level the playing field between parties involved in a legal dispute by providing financial support.
ATE insurance is usually only available to policyholders; however, certain insurers will also cover defendants. It can be purchased before the proceedings have been issued or at any time after; buying ATE later in proceedings may result in higher rates and increases the difficulty in finding cover.
What does ATE insurance cover?
Adverse costs:
The insured party may have to pay these legal fees if they lose the case.
Your lawyer’s expenditure:
This covers the costs paid by the insured party’s attorney during the case, such as court fees, expert fees, and other expenses.
Opponent’s disbursements:
If the insured party loses the case, this covers the costs of the opponent’s lawyer, such as court fees, expert fees, and other expenditures incurred throughout the case.
Counsel’s fees:
This is the expense of hiring a lawyer or other legal counsel, which may be necessary in some cases.
Appeal process costs:
ATE insurances pays the legal fees for an appeal process
Here are some excellent areas that are covered by ATE insurance:
- Road traffic accidents
- Employer liability
- Public liability
- Slip and trip
- Industrial disease
- Abuse and discrimination cases
- Contract disputes
- Professional negligence
- Property disputes
How does after-the-event insurance work?
Accident Occurs: Sometimes, the policyholder experiences a personal injury, breach of contract and employment dispute which require filing a claim or lawsuit.
Filing lawsuit:
Policyholders may decide to pursue legal action and hire a lawyer, which is a highly costly option.
ATE Insurance Application:
A claimant applies for ATE insurance to avoid lawyer expenses, covering the legal costs of pursuing the claim and lawsuit.
Legal Costs Covered:
Your claim payout will include legal fees and ATE insurance if the claim is successful.
No Win, No Fee:
If the claim is unsuccessful, the ATE insurance policy usually includes a “no win, no fee” policy. This means that claimants don’t have to pay any legal costs or ATE insurance premiums.
ATE insurance only covers the claimant’s legal fees if the claim got unsuccessful.
How much is after the event insurance cost?
ATE insurance costs can vary depending on the type of legal case, the amount of coverage required, and the insurer’s underwriting criteria. Moreover, an issue with a higher chance of loss may result in a higher premium.
It’s also worth noting that ATE insurance is usually only available to those who have already started legal proceedings. The most valuable thing about ATE insurance is that it only charges a premium if you get a claim payout. If you lose the case, you are free from legal expenses and premiums.
Here are some average estimated costs of ATE insurance given in the table.
| Compensation amount | Basic Premium | Premium with IPT |
| £1k – £10k | £385 | £431.20 |
| £10k – £25k | £550 | £616 |
| £25k – £100k | £1,565 | £1,752.80 |
| £100k+ | £3,000 | £3,360 |
What is the percentage of ATE premiums?
When a claim is satisfactorily resolve through negotiation and court proceedings, the premium might be determine as a percentage of the expenses or 30% to 45% of the insurance cover.
After the event, what insurance premium options?
Premiums can often be arrange in a variety of ways.
- “flat premium” means a single price.
- The staged structure premium – grows as some critical milestones in the case are met.
- Premiums are calculated as a percentage at the end of the case.
ATE Insurance premiums usually depend on case success. This is a crucial difference between ATE insurance and other types of insurance. This means the Insured only pays the premiums if the policy’s Success level is met.
How Does ATE Insurance Relate to a CFA?
Conditional Fee Agreement considered as a “no-win, no-fee” contract. If the claim is unsuccessful, the claimant’s lawyer agrees not to charge for his services. Even with such a contract, the claimant may be held liable for his lawyer’s fees and some of the Defendant’s costs if he loses.
The Law Society’s recommended form of CFA states that if the claim is rejected, the claimant may be required to pay his lawyer’s costs. The Claim Safe covers this danger After the Event Insurance coverage.
Is after the event insurance recoverable?
After the Event (ATE) insurance is generally not recoverable. However, this can depend on the jurisdiction and the specific circumstances of the case. In the UK, for example, ATE insurance premiums were recoverable from the losing party in litigation until April 2013. Now, they are generally not recoverable, except in certain types of cases such as insolvency proceedings.
After the event insurance for litigants in person?
After the event (ATE) insurance can potentially be useful for litigants in person (LIPs) to help fund legal costs in the event their claim is unsuccessful. Some key points for LIPs to consider regarding ATE insurance:
• ATE insurance covers the legal costs of the other side if you lose your case. It does not cover your own legal fees or expenses. As an LIP, you will not have legal fees to cover, but you could still be liable for the defendant’s costs if you lose. ATE insurance protects against this risk.
• ATE insurance policies for LIPs typically have lower premiums than for represented claimants. This is because the potential liability (the defendant’s costs) is often lower in LIP cases. The premium will still depend on the specifics of your claim though.
• You will usually need to pay the ATE insurance premium upfront before your claim commences. The premium is not recoverable from the defendant, even if you win your case. So you need to weigh up the premium cost versus the risk of facing a large costs liability if you lose.
• ATE insurance for LIPs typically provides more limited cover, e.g. £25,000 to £100,000. Higher covers are available but the premiums will be higher. You need to consider the likely costs liability in your particular case.
• Some ATE insurers specialize in cover for LIPs and may provide additional benefits like a legal helpline. But not all ATE insurers provide LIP-specific products, so you may need to shop around.
What is the Origins of After The Event Insurance?
The Access to Justice Act was passed in 1999 to provide an alternative to the traditional method of financing lawsuits.
With After The Event Insurance coverage, clients could protect themselves against the danger of having to pay the Defendant’s fees if their case was unsuccessful.
Previously, if you lost your lawsuit, you would be responsible for the Defendant’s legal costs, which may run into thousands of pounds.
Does ATE Insurance Premium become Expensive if taken late?
A common disadvantage of insuring late is that huge premium costs and ATE insurers evaluating premium costs are likely to be extremely strict.
If the ATE Insurance coverage is obtained initially, the event insurance premium will be very high.
Moreover, It will become challenging to convince the insurer that the claim made against you is still likely to succeed.
When to Purchase After The Event Insurance?
Before paying major legal fees or expenses, purchase ATE Insurance. Most ATE Insurance plans are purchased by solicitors who file claims.
After the Event Insurance will not cover fees and payments made before the policy’s start date.
Many ATE insurers offer standard ATE coverage if the case settles because many personal injury claims start in a similar risk category.
It’s best to obtain ATE insurance prior making a claim or lawsuit.
When is ATE insurance available?
Not all cases require ATE insurance, and ATE insurance will not always be available in all situations:
- ATE insurance is available to claimants and defendants.
- ATE insurance policy is public where there is no fixed recovery rate.
- ATE policy is not available where the case involves novel issues.
What are the advantages of ATE insurance for small businesses?
ATE insurance protects businesses from paying the other side’s fees in Lost cases.
The company will know the insurance premium’s drawback after receiving a quote.
ATE insurance helps the defendant to settle as they know the insurer evaluated the case or defense.
ATE insurance also shows the company’s long-term commitment to the case.
This insurance can be obtained at any point in the case; however, it may be more complex and costly later.
What are the disadvantages of ATE insurance for small businesses?
Most insurers will request a separate business case evaluation. The business will initially pay for such assessment, but the premium will usually cover it if the insurance is authorized. Insurers will not fund cases that are likely to fail.
If the likelihood of success falls below 60% at any point throughout the proceedings, the insurer will most likely remove the insurance cover.
The policy will include a list of exclusions. Typical exclusions include:
- Misrepresentation or fraud
- Withdraw due to lack of funds
- business’s opponent’s bankruptcy.
Some insurers may push you to agree on a fair settlement amount immediately. This means that the business would need approval from the insurer to accept a sum less than that amount.
Similarly, the insurer’s agreement is usually required before buying or withdrawing from the procedures.
Is ATE insurance worth it?
In certain situations, I think ATE insurance is useful. For example, ATE insurance may provide you piece of mind if you’re in a court fight where losing could ruin your finances. It’s essential to weigh insurance expenses against case losses.
My friend was once involved in a court fight over a contract breach. My friend was anxious about the potential costs if they lost the case because the other side was suing for a huge quantity of money.
They bought ATE insurance and, happily, the lawsuit was decided in their favor. The insurance fee was a little thing for him to pay for the peace of mind it provided, and it proved to be a wise investment.
