After the Event Insurance
For many clients, the expenses related to litigation and dispute resolution are a significant concern. After-the-Event (ATE) legal expenses insurance can be used to reduce the risk of litigating and to satisfy a security for costs order.
For the benefit of the client, ATE is perhaps best thought as a form of ‘swap’: For either no upfront fee or a small upfront fee, the insurer takes on the risk of a potential adverse costs award. The client will have swapped their obligation to pay the defendants in the event of a loss, with the obligation to pay the insurer in the event of a win.
This is generally an attractive swap as the client is likely to be in a better financial position following a win than following a loss. Also, the payment to the insurer will only be a percentage of the adverse costs, rather than the whole amount. The actual amount the client will pay for the insurance will depend on how long it takes to settle the case:
- An early settlement and the client could pay as little as 10-20% of the amount insured (the adverse costs) as an ATE premium.
- If the case goes to trial, it is more likely to be in the 40% to 65% range (depending on the insurer and the case) of the amount insured.
- So if a client needs £100,000 ATE insurance their premium could be £40-65,000 if they win at trial, and as low as £10,000 if the claim settles early.
- If the case goes to trial and loses the insurer will pay out £100,000 to the defendants, and the client will pay nothing (or nothing further – if a deposit premium has already been paid).
What are the benefits of using ATE legal expenses insurance?
There are several benefits to using ATE legal expenses insurance, including:
- Reduced financial risk: ATE insurance can provide legal protection for any legal costs incurred in a case, including the risk of having to pay an opponent’s legal costs if the case is lost.
- Access to justice: The risk of having to pay substantial legal fees on top of the other side’s costs can often put parties off pursuing a legal case. ATE insurance can make it easier for individuals and businesses to access justice by providing financial support for legal proceedings.
- Cost-effective: ATE insurance is often more cost-effective than paying court fees and expenses out of pocket.
- Flexibility: ATE insurance can be tailored to specific legal disputes, providing coverage for a wide range of claims. This includes commercial contract disputes, intellectual property disputes, shareholder disputes, and many others.
- Quick resolution: ATE insurance can encourage early settlement of a dispute. The opponent may be more likely to settle rather than risk going to trial and potentially incurring substantial legal costs.
How can Annecto Legal assist with ATE legal expenses insurance?
Most clients are heavily reliant upon their solicitors to advise them on insurance and funding for commercial disputes. However, few solicitors are well-placed to provide the comprehensive advice that ensures clients can make a fully informed decision.
Annecto Legal prides itself on offering a professional service at market leading rates to solicitors who are seeking to navigate this complex marketplace on behalf of their clients.
Small businesses that may struggle to pay an adverse costs order may require ATE insurance to ensure that they can take on a more equipped opponent on equal terms, or to meet a security for costs application. This prevents them from having to concede early or accept a poor offer due to being unable to pay out legal costs further down the line.
Annecto Legal helps large corporates to small business owners with ATE insurance to enable access to justice as well as the transfer of financial risk away from business’ balance sheets.
How can Annecto Legal assist with ATE legal expenses insurance?
Annecto Legal assists clients in realising the true value of their commercial litigation claims. The proposal forms, quotation, terms and conditions and premium structures of ATE legal expenses insurance can often be complex. Therefore, we recommend that you contact our team as soon as possible so that we can begin to provide the guidance that you require.
We provide our services to a range of clients, including businesses, solicitors, commercial insurance brokers, individuals, insolvency practitioners, liquidators and law firms.
Contact: David Law: david.law@annectolegal.co.uk (+44) 7540 303035
Or Mark Beaumont: mark.beaumont@annectolegal.co.uk (+44) 7730 217643