What Is After The Event Insurance (ATE)?

After the Event Insurance (ATE) is a crucial but often misunderstood element of civil litigation in England and Wales.

For claimants pursuing a legal case, ATE insurance can offer significant financial protection, ensuring that the risks of litigation don’t outweigh its potential benefits.

This guide aims to demystify ATE insurance, explaining its purpose, costs, and how it works, particularly in no win, no fee agreements.

By the end, you’ll have a clear understanding of whether ATE insurance might be right for you or your clients.

What Is After The Event Insurance (ATE) And What Does It Cover?

ATE insurance is a policy taken out after a legal dispute arises to protect the insured party (usually the claimant) against the risk of losing their case. They’re often used in personal injury and medical negligence claims.

Unlike Before The Event Insurance (BTE), which is purchased in advance of any dispute, ATE is arranged once a claim is already in motion.

The primary purpose of ATE insurance is to cover the potential legal costs a claimant might have to pay if their case is unsuccessful. This includes:

• The defendant’s legal costs (if ordered by the court).
• The claimant’s own disbursements, such as expert fees, court fees, and other expenses not covered by conditional fee agreements.
• In some cases, the premium for the ATE insurance itself, although this depends on the terms of the policy.

ATE insurance is particularly common in personal injury claims, medical negligence cases, and other areas where claimants may be deterred from pursuing justice due to the financial risks involved.

How Much Does After The Event Insurance Cost For Legal Expenses?

The cost of ATE insurance varies depending on several factors, including:

• The nature and complexity of the case.
• The likelihood of success (often assessed by solicitors or insurers).
• The level of cover required.
• Whether the premium is deferred or payable upfront.

ATE insurance premiums can range from a few hundred pounds to tens of thousands for complex cases.

However, many ATE policies offer a deferred and self-insured premium, meaning the claimant only pays the premium if the case is successful. This deferred payment structure is one of the features that make ATE insurance accessible to claimants with limited financial resources.

It’s also important to note that since the Jackson Reforms in 2013, ATE premiums are no longer recoverable from the losing party in most types of claims. This means claimants typically bear the cost of the premium themselves if their claim succeeds.

How Does ATE Insurance Work In A No Win No Fee Claim?

ATE insurance is often paired with no win, no fee agreements, also known as Conditional Fee Agreements (CFAs). Here’s how the process typically works:

1. Claimant Consults a Solicitor – The solicitor assesses the case and determines its prospects of success. If the claim appears strong, the solicitor may recommend a no win, no fee agreement and suggest taking out ATE insurance.
2. ATE Insurance Policy Is Arranged – The claimant secures an ATE policy to cover the legal costs that may arise if the case is unsuccessful.
3. Litigation Proceeds – If the case is successful, the claimant receives their compensation, and the solicitor recovers their fees from the defendant. The ATE premium is then deducted from the compensation or paid directly by the claimant, depending on the arrangement.
4. If the Case Fails: The ATE policy covers the claimant’s liability for the defendant’s legal costs and other disbursements, shielding the claimant from potentially significant financial losses.

ATE insurance plays a critical role in levelling the playing field, giving claimants the confidence to pursue justice without fear of financial ruin.

What Are The Pros and Cons Of ATE Insurance?

Pros

• Risk Mitigation: ATE insurance protects claimants from having to pay the defendant’s legal costs if the case is lost.
• Accessibility: Deferred premiums make ATE insurance accessible to claimants who might not have the means to pay upfront.
• Increased Confidence: Knowing that financial risks are covered allows claimants to focus on their case without undue stress.
• Flexibility: Policies can be tailored to suit the specific needs of a case, including varying levels of cover.

Cons

• Cost: ATE premiums can be high, especially for complex cases. Since these are not usually recoverable from the losing party, they reduce the claimant’s overall compensation.
• Eligibility Criteria: Not all cases qualify for ATE insurance. Insurers assess the merits of each claim before offering cover.
• Limited Availability for Defendants: ATE insurance is generally designed for claimants, meaning defendants often need to explore alternative options.

How Do I Get ATE Insurance And Who Pays For It?

ATE insurance is typically arranged through a solicitor or specialist broker. The solicitor plays a key role in evaluating the claim and liaising with insurers to secure appropriate cover.

Who Pays for ATE Insurance?

• If the Case is Successful: The claimant pays the ATE premium, often from their compensation.
• If the Case Fails: The claimant does not pay the premium; it is self-insured under most policies.

It’s worth discussing payment structures with your solicitor upfront to ensure you fully understand your financial obligations in different scenarios.

Check If You Have Before The Event Insurance (BTE)

Before taking out ATE insurance, it’s essential to check whether you already have Before the Event Insurance (BTE). BTE is often included in:

• Home insurance policies.
• Car insurance policies.
• Trade union memberships.

If you have BTE insurance, it may cover the legal costs of your claim without the need for additional ATE insurance. Your solicitor can help review your existing policies to confirm coverage.

Key Takeaways On After The Event Insurance

• What It Is: ATE insurance provides financial protection for claimants against adverse costs and disbursements in civil litigation.
• When to Use It: It is particularly valuable in no win, no fee claims and cases with significant financial risks.
• Costs: Premiums vary but are generally payable only if the claim succeeds.
• BTE Insurance Check: Before taking out ATE insurance, confirm whether you have existing legal expense cover under BTE policies.
• Consult a Solicitor: A qualified solicitor can guide you through the process of securing ATE insurance and ensure you fully understand its implications.

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You can also head here to learn more about the Compensation Recovery Unit and its role in legal cases.