You find yourself in a dispute with another party, you know it will cost you time, energy and finances in pursuing the legal action. It’s acknowledged that your claim has a good chance of success, however there is still a risk that you may lose the case. As a direct result, the other side are now coming at you to claim back their legal fees…
How can you protect yourself from such financial loss? The answer: After The Event Insurance.
What Is After The Event Insurance?
An After The Event insurance policy (ATE) is there to protect you from the adverse costs that you may be subject to if you are unsuccessful in a claim you may pursue. It can be obtained after the event has occurred. For example, you instruct a property solicitor to carry out work for you; you find out that you have been subject to negligent advice; and as a direct result you are the victim of financial loss. In the right circumstances, you are generally encouraged to take out ATE insurance. It will protect you from the future risk of your opponent’s costs, if you are unsuccessful in the claim.
What Is Its Purpose?
The key purpose of ATE insurance is to cover you from the future risk of costs from the opposing party.
NOTE: the insurance is not designed to pay you, the policyholder the actual damages that you are seeking to recover or will it cover the cost of your legal fees to progress the issue. Depending on the scenario and value of the claim that you are making, there may be appropriate Litigation Funding options available.
When Is It Available?
There are various funding options available for litigation whereby ATE insurance comes as standard.
A premium will be payable for the benefit of the insurance. Therefore, you must be commercially minded and decide whether the cost of the premium outweighs the actual cost of what you are seeking to recover.
WARNING: what can happen, if you are not appropriately advised, is that a premium is paid, but it is equal to the financial loss that you are seeking to recover.
ATE insurance can be available to you at any stage throughout your proceedings. As the case progresses, the scale of risk can either escalate or decline. The premium attached to the ATE insurance will slide in line with that risk.
What Will It Not Cover?
Legal expenses insurance will not cover damages compensation that you may be ordered to pay if you lose your case.
Appropriate Next Steps:
If you find yourself in the unfortunate situation whereby you/your business are, or foresee a dispute with someone, we at Griffin Law recommend that you:
- Obtain independent legal advice. This will allow you to understand your position clearly – including whether a litigation funder may be interested in assisting with the funding of your case, as well as covering the ATE insurance premium.
- Allow your solicitor to speak to the various ATE insurance providers to identify whether it is a claim that they would be interested in covering the risk of.
- Once the appropriate insurance is in place, and/or a litigation funder is on board, your solicitor can action the appropriate next steps to commence your claim.
Look Out For:
A solicitor or legal adviser who fails to discuss the possibility of insurance cover available to you.
If you find that you have not been advised about these options, you may have a potential claim of professional negligence against your solicitor/legal adviser. Griffin Law will take the time to speak to you about this and whether it is worthwhile pursuing with the assistance of either Before the Event Insurance, ATE Insurance and/or litigation funding.
In the case of Percy v Anderson-Young  EWHC 2712 (QB) the court allowed the recovery of the After the Event insurance premium from the other side. There was a considerable amount of argument heard as to whether this would be allowed or not.
There is also ongoing debate as to the appropriate level of premium that is payable as well as whether it is recoverable from the opposing party. These issues arose in the case of Rogers v Merthyr Tydfil  EWCA 1134.
Griffin Law is authorised by Temple Legal Protection to issue ATE insurance policies of up to £100,000 to protect you against the risk of being ordered to pay any opponents’ costs if a claim is unsuccessful.