After The Event (ATE) Insurance
After The Event Insurance (ATE Insurance) is simply an insurance which covers the legal costs, fees and expenses involved in a legal action.
ATE insurance can be used in most types of legal action and by either a claimant or a defendant, although in reality ATE Insurance is mostly used by claimants. Some common types of legal dispute that use ATE insurance are, Plevin claims, PCP Claims, Mortgage Mis Selling Claims, Mis Sold Car Finance Claims, and Japanese Knotweed Claims.
ATE Insurance cover is usually arranged by lawyers on behalf of their clients, and they may have an arrangement in place with an ATE insurer, or they may use a specialist ATE insurance broker to source ATE cover.
When was After The Event Insurance invented?
ATE Insurance was created following the introduction of The Access to Justice Act which was bought into force in 1999, and paved the way for a new alternative to the traditional way of funding a legal action know as no win no fee agreements, or CFA’s.
This Act allowed client’s to insure themselves against the risk of having to pay the defendant’s costs, and own disbursement should their legal action be unsuccessful or abandoned. This insurance was called ATE, or After The Event Insurance, as it was purchased after the claim had arisen unlike more traditional insurances which you buy before an event occurs.
Do I have to pay for After The Event Insurance?
Unfortunately yes. Up until 2013 ATE insurance premiums were recoverable from the losing party as an additional liability they had to pay. But following the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, (LASPO), most ATE insurance premiums are now no longer recoverable, and must be paid by the winning claimant out of their damages recovery.
So what does ATE Insurance Cover?
Most After The Event Insurance policies cover the legal costs and expenses that a claimant would have to pay to a defendant when a legal action is lost or discontinued.
ATE insurance will also cover the disbursements and expenses which their lawyers have incurred in pursuing the legal action, for example medical reports, Court fees, Counsel’s fees, and Expert fees.
What does After the Event Insurance not cover?
ATE insurance policies will generally exclude own legal advisors fees. They may also exclude pre incurred costs and expenses, costs incurred by unreasonable behavior or actions, and any claimant who acts fraudulently would not be covered for anything in most ATE insurance policies.
Why should I buy After The Event Insurance at the start of my legal action?
ATE Insurance is purchased after an incident has taken place, but usually before any significant legal costs or disbursements have been incurred. Securing ATE insurance at the start of your legal action gives you the best chance of getting it at the lowest price.
Leaving it later in the legal dispute may mean the cost of your ATE insurance policy is much higher, or it can mean that you are unable to purchase it all at. For example securing ATE insurance a few months before trail is a very difficult task.
How much does an After the Event Policy cost?
ATE insurance policies can cost from £30 for a simple RTA accident, right up to many millions of pounds for large commercial ATE disputes. ATE underwriters base their premiums on risk, and so they look at the chance of having to pay out, along with the maximum amount they would have to pay out in the event of a claim. Then they would add a margin for their own costs, expenses and profit, thereby producing the final ATE insurance premium. (IPT tax would also be added).
We have more than three decades of experience in the legal expenses market, and 15 years of ATE (After the Event) insurance experience, dealing with many thousands of ATE policies and customers during that time. If you are in need of new ATE insurance capacity, or are considering a change, feel free to contact us for a discussion on what we can do for you.