Litigation risk desk · Commercial litigation · Arbitration · Legal assets · Litigation finance
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Protect the downside.
Preserve the upside.
Independent information on litigation insurance for high-value commercial disputes, international arbitration and legal assets: after the event (ATE) insurance for adverse costs, capital protection insurance and judgment preservation insurance. Plain-English guides to how each works, what drives cost and what underwriters look at.
- [1]Adverse costsThe other side's costs if a claim fails. In loser-pays forums, often the largest variable a claimant cannot control.
- [2]LimitCover responds up to an agreed limit. Spend that runs past it — an appeal, a longer trial — stays with you.
- [3]IllustrativeA £40m claim with adverse costs insured to trial. A teaching model, not pricing or availability.
01 — What is at risk
A dispute is not a number. It is an exposure that grows every month it runs.
Choose a claim size and the costs you would insure, then read the plot stage by stage. Cover caps a layer of exposure up to a limit. It does not make the exposure disappear.
At trial
- Own-side costs
- £4.8m
- Adverse costs
- £4m
- Total exposure
- £8.8m
- Transferred
- £4m
- Carried by you
- £4.8m
Illustrative model. Ratios are a teaching device, not market data, a quotation or an indication that cover is available.
02 — What can be protected
Start with what you cannot afford to lose.
Capital committed to a case or a book of cases
Deployed capital is the exposure. Protection preserves an agreed portion of it if the case fails.
- Capital deployed into a case or portfolioCapital ProtectionDownside protection for capital committed to litigation, so an agreed portion of that capital is preserved if the case fails.
- Capital across a book of casesPortfolio Capital ProtectionProtection assessed across a cross-collateralised portfolio rather than a single matter.
- A funder's deployed commitmentLitigation Funder Capital ProtectionCapital protection written for funders deploying non-recourse commitments into cases.
03 — Is my situation suitable
Underwriters read a dispute through six questions. So should you.
No two matters are placed on the same terms. These are the questions that decide whether a conversation with the market is worth having — and what it will turn on.
- 01MeritsIs there an independent view on liability?Usually counsel's opinion, read as underwriters read it: for the weaknesses.
- 02QuantumIs the figure claimed supported by evidence?Expert quantum, not the pleaded number.
- 03ProportionDo the costs make sense against a realistic recovery?The budget is weighed against what is likely to be recovered, not what is claimed.
- 04CounterpartyCan the other side pay — and can you make them?Solvency, assets and the enforcement route are part of the risk.
- 05ForumWhich costs rules and security practice apply?The forum decides which exposures exist at all.
- 06TeamWho is running the case?Experience in comparable disputes is itself an underwriting factor.
You do not need every answer before cover can be considered. Most matters begin with some of these unresolved; part of underwriting is identifying which gaps matter to a placement and which do not.
04 — How cover is structured
The anatomy of a policy, annotated.
Every placement is bespoke, but the architecture is recognisable. Read it the way an underwriter drafts it: term by term, with the notes in the margin.
Schedule — specimen
Illustrative
- Insured
- The party carrying the exposureClaimant, defendant, funder, firm or investor — the structure follows whose balance sheet is at risk.
- Cover
- Adverse costs · own costs · capital · judgmentLayers are chosen separately. Most programmes insure some, not all.
- Limit of indemnity
- An agreed ceilingOften sized to the costs budget through trial, and revisited as the budget moves.
- Staging
- Cover that steps up with the caseLimits and premium can be staged so early cost reflects early risk.
- Premium
- Fixed, deferred or contingentIn some markets premium is deferred and payable only on success. Terms vary by risk.
- Conditions
- What keeps the policy responsiveReporting, budget and counsel conditions — the terms that matter most after inception.
- Security
- Anti-avoidance and deedsWhere a policy is offered as security, wording is drafted for the court or tribunal that will rely on it.
04 · continued — The economics
A claim is not a cheque.
Between the pleaded figure and the money that reaches the balance sheet sit probability, costs, capital and enforcement. Insurance is bought to change the shape of that distribution.
Illustrative net position
£11.6m
From a pleaded £40m claim. Illustrative only — not a projection or a valuation.
Claim value
£40mThe number in the particulars.
Recovery probability
Applied to a realistic outcome, not the best case.
Own legal costs
Solicitors, counsel and experts through to trial.
Funding return
Where external capital is deployed.
Enforcement drag
Time, jurisdiction and counterparty.
05 — Which jurisdictional factors matter
The forum decides which exposures exist at all.
Where costs follow the event, adverse costs dominate. Where they do not, judgment and capital risk take over. Seat, institution and enforcement route shape the rest.
- UKUnited KingdomHighLoser paysCosts shifting makes adverse costs the dominant quantifiable exposure.
- USUnited StatesLowerEach side bears its own, generallyWithout general costs shifting, judgment and capital risk dominate over adverse costs.
- EUEuropeDependsVaries by member stateRules differ materially between member states; structure follows the forum.
- AUAustraliaHighLoser paysSecurity applications against funded claimants can be routine.
- SGSingaporeHighLoser paysA principal seat for international arbitration in Asia.
- HKHong KongHighLoser paysOutcome-related fee structures for arbitration have changed the funding landscape.
- MEMiddle EastDependsVaries by court and free zoneCommon-law free-zone courts and arbitral centres operate alongside local courts.
- ARBInternational ArbitrationDependsTribunal discretionSeat, institution and enforcement route drive the structure more than nationality.
General orientation, not advice. Costs rules have exceptions, and the position in a particular matter depends on the court or tribunal, the rules applied and the conduct of the parties.
Who we act for
Different balance sheets carry different exposures.
- Businesses & CorporatesClaims are assets. Costs are liabilities.Pursuing or defending substantial commercial claims without exporting the downside to the balance sheet.
- Law FirmsThe firm's balance sheet is carrying the case.WIP, conditional and contingent fee exposure across a growing book of matters.
- Litigation FundersNon-recourse capital, recourse-shaped protection.Preserving deployed commitments and improving the risk profile presented to investors.
- InvestorsLegal assets, underwritten.Credit funds, family offices and specialist investors seeking a defined downside on legal-asset exposure.
- Insolvency ProfessionalsPursue recoveries without estate risk.Administrators, liquidators and trustees advancing claims for the benefit of creditors.
- Private EquityTake the dispute out of the deal.Contingent litigation exposure that blocks, prices or delays a transaction.
Common questions
Questions buyers ask first
What is litigation insurance?
Litigation insurance transfers a defined financial risk arising from a dispute — adverse costs, own costs, deployed capital, judgment value or contingent liability — to an insurance market in exchange for a premium.
Who is litigation insurance for?
Corporates, law firms, litigation funders, investors in legal assets, insolvency professionals and private equity holders of contingent legal exposure.
Are ATE insurance premiums recoverable from the other side?
In England and Wales, generally not for policies taken out since April 2013, following the Legal Aid, Sentencing and Punishment of Offenders Act 2012; limited exceptions apply. The premium is therefore usually a cost to the insured, which is why deferred and contingent premiums are common.
Who pays for litigation insurance?
The insured party — usually the claimant, sometimes a funder or law firm on its behalf. Premiums may be paid up front, or deferred and payable only if the case succeeds, often from the proceeds.
Is litigation insurance the same as litigation funding?
No. Funding pays legal costs as they arise in exchange for a share of any recovery. Insurance pays only if a defined loss occurs, in exchange for a premium. The two are often combined.
Does this site quote prices or confirm that cover is available?
No. Every risk is underwritten individually. Nothing on this site is an offer of insurance, and no cover exists unless and until a policy is issued.