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What is ATE Insurance and what are its benefits?

What is ATE Insurance and what are its benefits?

what is ATE Insurance

After-the-Event (ATE) insurance is a specialised type of legal expense insurance designed to protect individuals and businesses involved in litigation from the financial risks associated with legal proceedings.

In some cases, parties may already have legal expenses insurance in place before a legal issue arises. This is referred to as “before the event” (BTE) insurance.

ATE insurance, on the other hand, is arranged after a legal issue has emerged. This coverage is especially beneficial for claimants who might otherwise be discouraged from pursuing legitimate claims due to the potential costs and financial risks of being the losing party. Additionally, ATE insurance can address a defendant’s demand for “security for costs” in a legal dispute.

If you are wondering, “What is ATE Insurance?”, Annecto Legal can provide the guidance you need. Annecto Legal bridges the gap for clients requiring access to legal advice on any commercial dispute, eliminating financial uncertainties and unforeseen legal expenses at a low cost.

What is ATE insurance?

ATE insurance covers the legal expenses and costs incurred during commercial disputes. It can be used in conjunction with conditional fee agreements, damages-based agreements, and third-party funding to support litigation.

Typically, ATE insurance will cover the opposing party’s legal fees and other costs if a business or individual loses a commercial dispute, as well as the client’s own disbursements. This type of insurance helps to mitigate the financial risks of pursuing legal action and provides peace of mind to individuals or businesses involved in commercial disputes.

ATE insurance policies are often customised to specific case types and can cover a range of costs, including court fees, counsel fees, and other legal expenses. Commercial ATE insurance can provide indemnity for various legal disputes, such as commercial contract disputes, intellectual property disputes, shareholder disputes, professional negligence, property disputes, and more.

There is sometimes an upfront cost for commercial ATE insurance. However, it may be possible to defer payment of this insurance premium until the conclusion of the case, and clients may only pay the premium from the funds received if their claim is successful. You should always ensure that the sum insured by the ATE insurance is sufficient to cover the costs of your opponent’s legal expenses.

What are the benefits of ATE insurance?

ATE insurance provides a number of benefits to parties looking to pursue a legal action, including:

  • It removes the risk of having to pay the opponent’s legal costs if the claim is unsuccessful.
  • Claims can be pursued to their fullest extent as clients do not have to worry about the repercussions due to risk mitigation.
  • It can provide protection from interim costs orders. In some circumstances, a costs order can be made in favour of a party, allowing them to recover the costs of an interim hearing, irrespective of who actually wins the case at the final hearing. Depending on the policy, ATE insurance may protect against adverse costs in interim hearings.
  • It can strengthen a claimant’s negotiating position. Opponents are aware that the claimant is financially protected against adverse costs, which can encourage more favourable settlement offers and deter the opponent from prolonging litigation in the hope of outspending the claimant.

Choosing the right solicitor

When considering ATE insurance, it is also important to note that having the right solicitor is also vital for your case. When making a claim, it is not essential to instruct the most expensive solicitor; however, your typical high street solicitor may not be the best choice either.

You should always choose a solicitor with the right specialism for your case to ensure the best outcome. It is also important to consider how your solicitor will be perceived by an opponent.

In addition to this, you may wish to think about your solicitor’s willingness to share the risk and their experience in working with legal funders and insurers. If you need assistance in getting the right representation, then Annecto Legal can assist with this too.

ATE insurance and alternative funding methods

ATE insurance can be used in conjunction with various alternative litigation funding methods. These include:

Conditional Fee Arrangements (CFAs) – CFAs, commonly known as “no win, no fee” agreements, allow clients to defer legal fees until the case is resolved. When a no win, no fee basis is combined with ATE insurance, claimants are protected against the risk of paying the opposing side’s costs if the case is lost. This combination makes pursuing a claim less financially daunting, as the claimant does not have to worry about their own legal costs or adverse costs.

Damages Based Agreements (DBAs) – Under DBAs, solicitors receive a percentage of the damages awarded to the claimant if the case is successful. When paired with ATE insurance, the claimant gains added security against adverse costs, ensuring that they are not liable for the opponent’s legal fees if the case fails. This combination can make DBAs more attractive to claimants who might be concerned about the financial implications of losing.

Third Party Funding – Third party funding involves investors funding the legal costs in exchange for a share of the proceeds if the case is successful. ATE insurance can complement funding by covering the potential adverse costs, reducing the financial risk for both the claimant and the funder. This makes the case more appealing to third-party funders, as the overall risk profile is lowered.

How can Annecto Legal assist?

Annecto Legal help clients realise the value of their commercial litigation claims. The application, proposal form, costs and ATE insurance premium structures can be particularly complex. If you have been left wondering ‘What is ATE insurance?’, we recommend that you contact our team as soon as possible so that we can provide the guidance you require.

We provide our services to a range of clients, including businessessolicitorscommercial insurance brokersindividuals, insolvency practitioners and liquidators.

Get in touch with an expert member of our team to find out more about ATE for commercial disputes and which legal expenses insurance is the right litigation funding choice for you.

Unfortunately, because of the high costs of legal actions in the UK, we only assist in disputes in which the financial value of the claim is over £250,000, at the absolute minimum. We would like to be able to help on other claims, but we just don’t have access to any products that can assist on smaller matters.

Get in touch

* Annecto Legal can only assist on case where the loss is in excess of £100,000, with the exception of data breach claims. If you need assistance on a claim worth over £100,000, please get in touch using our form or the details below:

Registered Office

Annecto Legal Ltd, 106 Kennedy Building, Murray Street, Manchester , M4 6HS

Phone

0800 612 6587

Email

info@annectolegal.co.uk

Contact us directly 

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