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After-the-Event (ATE) Insurance
What is After the Event (ATE) Insurance?
After The Event insurance commonly known as ATE is essential for solicitors who run cases on conditional fee agreements with their clients. ATE insurance protects a Solicitor’s client when or after that person or entity becomes aware of the need to litigate to protect their interests.
What does the ATE policy cover?
The policy covers the insured against various costs what could prove to be substantial that the insured may be liable for if the legal action prove to be unsuccessful. For instance:
Deferred and contingent upon success Premiums
Premiums are usually available on a deferred and self-insured (or contingent upon success) basis, which means that the premium is only payable at the conclusion of the case, and then only if the case is successful. If the case is unsuccessful, a claim can be made under the policy for the insured legal costs and the insurer does not collect a premium. ATE Insurers are therefore effectively speculating on the case succeeding in order to earn any income.
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ATE insurance covers the client’s liability for their opponent’s legal costs, whether that liability arises from a defeat at Trial, discontinuance or some other outcome, such as the failure to better a Part 36 offer for instance.​
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In addition, policies cover litigants own disbursements, including Counsel’s fees. It is important to note that ATE insurance will not cover the client’s own disbursements on an interim basis, but only at the conclusion of the case in the event of an unsuccessful outcome. In certain circumstances, it may be possible to negotiate cover for the client’s own solicitors’ fees, or a proportion of such fees. Once again, if own solicitors’ fees cover is purchased, the policy will only respond at the conclusion if the case is unsuccessful.
Types of After the Event insurance policies
Delegated Authority
Delegated authority schemes are undertaken by solicitors who have the authority to insure a volume of usually generically similar cases under a more standard ATE Insurance policy.
One Off Cases
One-off’ cases - in other words, individual bespoke policies
Big Ticket
Big Ticket’ items are ATE cases which require substantial limits of indemnity such as over £1,000,000 for instance which need a more bespoke approach.
ATE Product Features
Deferred Premiums
The premiums are structured to be fair to all parties and facilitate the principle that claims should be settled at the earliest opportunity.
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Policyholders are not required to enter into a CCA agreement as premiums are not payable until the end of a successful legal action. LEXAW will not demand for payment of the policy premium if the insured action is unsuccessful providing there is no alleged fraud.
Insuring all Cases
The widest possible spread of risk is necessary to keep premiums low so it is important that all suitable cases are insured at the earliest opportunity.
Quick and Simple Policy Administration
Our firms can incept their policies online via our ATE scheme control panel or they can also use an excel spreadsheet which they update and email to us as and when cases need adding or updating.
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LEXAW have developed key relationships with law firms through our knowledge and experience of the legal industry and understanding their business needs, their ATE requirements and providing them with the most comprehensive products supported by a rapid and reliable service.
Part 36 Offers
LEXAW offer a great level of protection for clients. The client's damages are ring fenced in the event of a failure to beat a payment in under CPR Part 36
The Cover
The policy covers your client for your unrecovered disbursements and the other side's costs. Our indemnity cover ranges from £25,000 as standard to £5 million.
Benefits Summary of ATE Insurance Cover
ATE Insurance provides cover if a case is lost as the policy will normally repay the other side’s costs and disbursements together with the claimant solicitor’s disbursements.
The ATE policy also usually insures its own premium and therefore the client usually has nothing to pay if their case is lost.
Furthermore for the right risk it can be extended to cover the insured’s Solicitor’s own legal costs. For instance this may take place where the Solicitor is not acting under a conditional fee agreement.
The ATE policy may also cover costs already incurred prior to the policy inception but this is subject to initial negotiation.
The standard cover is for costs incurred after the inception date of the policy up to conclusion of the legal action.
If you have any questions about After the Event insurance, or would like to discuss the insurance requirements of a particular case or client, please contact us and we will be happy to assist you.
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Our Contact Details
LEXAW INSURANCE,
West One
114 Wellington Street
Leeds
LS1 1BA
+44 (0) 8456 586618