Is After the Event (ATE) Insurance the alternative to Litigation Funding?

ATE Insurance is an opponent’s costs insurance policy purchased by a Plaintiff, typically around the point at which proceedings are issued. Whilst there is no indemnity for own Legal Fees, Insurers may also consider own disbursements such as Counsel or Expert Fees. Own Disbursements if included within the limit of indemnity are insured in the event of a loss, not funded during the life of the litigation.

Underwriters can offer a variety of premium payment structures and in some circumstances may offer part or all of the premium on a contingent on success basis. Therefore the premium is only payable in the event of a successful outcome. If the case is lost the client benefits from the indemnity but as success has not been achieved, the contingent premium is not payable.

ATE Insurance reduces a Plaintiff’s litigation costs exposure and is therefore attractive to both those who can and those who cannot, afford to lose. The disclosure of the existence of ATE Insurance may also demonstrate to the Defendant that the Plaintiff has the ability to fund their legal action and potentially encourage settlement discussions? Furthermore, ATE Insurance may assist a Plaintiff in resisting a Security for Costs Application? If not then Insurers may be willing at an additional cost to provide a Deed of Indemnity alongside the ATE policy.