After the Event Insurance
Covering your opponent's costs if you lose
After the Event Insurance now makes it possible to insure against the risk of covering
your opponent's costs. Also, it is possible to have your insurance premium paid
by your opponent if you win your case.
Payment of the insurance premium is usually deferred until the conclusion of the
case. Then in the event of success it is recoverable from the opponent. Should you
lose the case, the policy covers the cost of the premium as one of the solicitor's
disbursements.
The limit of indemnity for the after the event insurance can be increased during
the case. And the solicitor can select the appropriate limit of indemnity.
See below for our Frequently Asked Questions regarding After the Event Insurance:
What is After the Event Insurance (ATE)?
ATE insurance is designed to protect your client against the downside of losing
at arbitration, adjudication or litigation.
What does After the Event Insurance cover?
ATE covers the opponents costs including disbursements that your client is liable
to pay in the event that he loses his case. Cover can be extended to insure your
client’s own solicitor/expert witness/barristers costs.
- If claimant loses – Insurers pay
- If claimant wins – No claim but premium recoverable from losing party subject
to test of reasonableness.
When can a policy be arranged?
ATE can only be effected after a cause of action has arisen, i.e. it is “after the
event”.
When does the policy pay out?
When the case is lost at court.
OR
When the case is not proceeding favourable and is terminated with the agreement
of Insurers.
Does the solicitor need to discuss alternative funding options with the client?
Yes. It is a requirement for all solicitors to discuss the availability of ATE insurance
with their clients to comply with Client Care Rule 15.
What information is required to provide an indication?
Completion of an application form and a review from the claimant’s solicitor, together
with any expert witness reports and the opinion of counsel.
How much does a one off case cost?
All cases are reviewed individually. However, in general, premium levels for those
cases going through to a trial are expected to average between 10% and 45% of the
limit sought. The limit can be any combination of claimant’s and opponent’s costs
and can include the insurance premium. Some insurers will consider an amendment
to the limit prior to the start of the trial, subject to their consent.
Can costs incurred prior to policy inception be included within the limit?
Yes. This can usually be included within the policy.
How much involvement does the underwriter have with the day to day running of the
case?
Provided there is no significant deterioration in the case, involvement is limited.
Underwriters generally avoid heavy-handed individual case monitoring.
Is the cost of the policy recoverable as an expense, in the event the case is won?
Section 29 of the Access to Justice Act 1999 now enables claimants to recover ATE
insurance premium by way of costs. However, there can be no assurance on this point
and any recovery (as is the case with other costs and expenses) may be subject to
a test of “reasonableness”. In that regard, Lockton may be able to assist in obtaining
quotations from other markets.
What percentage chance of success is require to provide an indication?
Generally no lower than 70%, in the opinion of underwriters.
If you require a quotation for a one off case, please complete the application form
below or if you require further information on delegated schemes, please contact
Steve Holland on telephone number +44 207 933 2444 or email
Steve.Holland@uk.lockton.com.