What do Solicitors look for in Commercial Dispute Resolution After the Event (ATE) insurance ?
Are you a commercial / dispute resolution lawyer asking what after the event (ATE) insurance is, how it works and when is it used ? If so, please read on as you will hopefully find the below useful to both yourselves and your clients.
Traditionally, after the event (ATE) insurance is often just associated with lawyers and law firms who provide legal services for personal injury work, but this isn’t the case anymore and there is a wider marketplace in existence for both lawyers and law firms who handle cases along a more commercial lines / dispute resolution theme either for individuals or for companies with case types such as Professional Negligence, Director disputes, Business Interruption, Contentious Trust & Probate, breach of contract & defamation to name but only a few (a full list of all the commercial case types we cover is on our website – www.prosperityinsurance.co.uk).
There is no legal requirement to actually have an after the event (ATE) insurance policy in place to pursue a claim for compensation. However, it is advisable to have one, as without it, a claimant may potentially be exposed to unnecessary financial risk if the claim being pursued is then ultimately unsuccessful.
As a commercial / dispute resolution lawyer though, you do have a duty of care to advise your client of what an after the event (ATE) insurance policy actually is and does as per the SRA’s Financial Services rules so that the client is then able to make a decision on whether or not they wish you as their handling solicitor to then pursue a quote for an after the event (ATE) insurance policy on their behalf.
ATE insurance is an arrangement between the claimant who is bringing the claim, and the ATE insurance company which has been arranged and sold to them via by their handling solicitor. The claimants’ solicitor can be working on a CFA, DBA or hourly rated arrangement and it is the solicitors’ responsibility to make sure that their claimant is fully aware of the terms of both their retainer arrangement and what it covers, together with the after the event ATE insurance to limit their potential financial exposure going forward regarding their claim.
It is recommended that an ATE insurance policy be acquired at an early stage of the claims proceedings where the associated risk with the case is deemed as being relatively low. In some circumstance, this may not always be appropriate and sometimes may be more prudent to seek ATE insurance further down the line once the claims journey or process has already started.
ATE insurance is usually also limited only to the courts and laws of England and Wales. It cannot cover matters in other jurisdictions because of recoverability, regulatory, or licence requirements.
Solicitors should ideally look for in an after the event (ATE) insurer how long they have been in the market for, the variety of different case types which they will look to insure, the ease of the ATE application process and ultimately how quickly the insurer turns the quote/s around within for a response. Another good couple of points to also look out for would be to check that the insurance specialist has access to the wider market when obtaining quotes and that product wise, the ATE premium itself is both deferred and fully self-insured meaning that nothing is payable by the claimant upfront for the policy and then if the claim was to loose, the premium isn’t still payable by the claimant.
A typical ATE insurance policy will usually include and cover the following aspects – the claimants own disbursements incurred, such as reports that may be required or court fees, and their opponents’ costs and disbursements (otherwise known as adverse costs). The ATE insurance policy premium is also usually fully deferred until the case concludes, as well as being fully self-insured as mentioned above.
Each ATE insurance policy will also carry its own limit of indemnity (LOI) which is the amount that the claimant is usually insured up to for their claim.
Applications for after the event (ATE) insurance are individually assessed for cases of a commercial nature via a be-spoke proposal form along with supporting documentation such as the solicitors risk assessment and counsels opinion, etc, enabling the ATE insurer to then be able to make an informed decision based on the facts of the case provided.
Pricing for commercial cases is then completed usually on a be-spoke basis and will be provided on a staged basis usually covering the following 4 high level stages of the legal cycle – pre issue, post issue, disclosure and trial/hearing. The actual premiums in this regard will traditionally differ, as if insured earlier, will tend to be lower than those offered once a case has been progressed or proceedings have already been issued on.
We believe that the commercial / dispute resolution sector of the ATE market will continue to develop and grow further in the coming years as society becomes a lot more litigious as a result of more people becoming aware of their own legal rights.
If you are a commercial / dispute resolution lawyer or law firm and would like to find out further information or to arrange a face-to-face meeting or a video or telephone call to discuss your firms commercial ATE insurance requirements, then please contact our Business Development team via any of the following channels:
Telephone: 0800 524 4235
