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ATE Insurance Coverage Options
When securing ATE insurance through TheJudge, each policy is tailored to the requirements of the client. Cover can typically be arranged for:
- Adverse costs, i.e. the costs incurred by the opponent in the litigation
- Own disbursements, such as expert’s fees and court fees
- Counsel’s fees
- Own solicitors’ fees
As TheJudge is a broker of litigation insurance, as opposed to an insurance provider, we are not restricted by limits on the amounts of cover we can secure. As such, there is no cap on the level of cover potentially available for a given case. TheJudge can secure ATE insurance cover of less than £100,000, ranging to over £20m in relation to an individual case.
How it works
Assume a client finances its own disbursements, counsel’s fees and solicitor’s fees on an interim basis but has an ATE insurance policy in place covering all of the above costs. Should the case be unsuccessful, the insurer will reimburse the client for the disbursements, counsel’s fees and solicitor’s fees paid, together with any liability for adverse costs, up to the limit of indemnity afforded under the policy.
ATE insurance in practice – Worked Example
The client pursues a breach of contract dispute against a supplier, on the advice of his lawyer that the case has a greater than 60% chance of succeeding. After two years of litigating, the case loses by the narrowest of margins as the trial judge favoured the witness evidence of the defendant.
|Client's liability at conclusion without insurance|
|Lawyer's fees incurred to conclusion||£300,000|
|Disbursements incurred to conclusion||£100,000|
|Adverse costs order against client||£350,000|
|Client's total uninsured costs liability||£750,000|
Alternatively to the above uninsured scenario, the client may have elected to obtain ATE insurance at the outset of the case. Had the client done so, the ATE provider may well have agreed to insure the following:
|ATE Insurance Policy Coverage|
|50% of the client's own lawyer's fees||£150,000|
|100% of the client's own disbursements||£100,000|
|100% of the potential adverse costs order||£350,000|
|Total policy coverage||£600,000|
Client's liability at conclusion with insurance = £150,000.
The above illustrates that the client’s exposure reduces from £750k to £150k, simply through the use of insurance.
And the cost of the policy in these circumstances? Had the client secured an ATE policy on the basis of a contingent premium, the cost in the event of a loss situation would have been ZERO. To learn about the available premium options, click here.
At TheJudge, we strongly recommend a market search to source competitive ATE insurance options irrespective as to whether ATE is being sourced as a standalone product or in conjunction with litigation funding.
Where both litigation funding and insurance is sought, we believe it’s in the client’s best interest to search both the funding and insurance market to achieve the best result. Some litigation funding companies can offer to arrange a client’s ATE insurance on their behalf, or indeed to directly indemnify the client for any adverse costs orders. Be aware that this is rarely to the client’s advantage as the cost of this form of ‘insurance’ is often significantly higher than sourcing the cover and funding independently via TheJudge.
Click here to make an application for litigation funding or insurance.