Commercial Litigation Funding
ATE Insurance Explained

ATE Insurance Explained

After the Event Insurance, also known as ATE insurance or Litigation Insurance, is where an insurance company provides an indemnity for legal costs in the event that a client loses a piece of litigation or arbitration. It therefore provides a safety net against an adverse outcome.  

Unlike traditional insurance which is taken out ahead of an event occurring, ATE insurance is available only to litigants who are already involved in, or who are contemplating, a legal claim.  ATE insurers will therefore be keen to only offer a policy for those cases where they believe the client’s claim is likely to succeed. Essentially, the insurer is making a bet on the outcome of the case.

ATE insurance can be used in isolation or in conjunction with a litigation funding agreement. For clients who have the ability to pay their own legal fees on an ongoing basis, but who would prefer to remove the risk of the case being unsuccessful, ATE insurance typically provides a more cost effective solution than pure litigation funding. To put that into context, take a look at our work on the case of Dresdner Kleinwort Limited & Anor v Attrill & Ors [2013] EWCA Civ 394 here.

For clients who do not have the ability to pay their legal fees on an ongoing basis, litigation funding may be the solution, albeit this would probably also involve taking out a litigation insurance policy. If the case is being litigated in England and Wales or indeed another jurisdiction where cost shifting rules apply, most funders will usually insist that the client has in place ATE insurance to cover the adverse cost risk.