ATE insurance
Is ATE Insurance Worth It?
An honest look at when after-the-event insurance earns its cost, when it doesn't, and what to check before you buy.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIP
- Security for costs
- The opponent's costsThis cover
- DisbursementsThis cover
- Own legal costs
The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
Is ATE insurance worth it?
It is worth considering when losing would leave you with an adverse costs bill you cannot comfortably absorb, and especially when the premium is payable only if you win. It is less worth it when the costs risk is small relative to your resources, or when the premium would take a large share of a modest recovery.
- Reading
- 2 min
- Sections
- 4
- Questions
- 5
On this page · 7 sections2 min read
Key points
4 to know
- ATE converts an uncertain adverse costs bill into a known premium.
- A contingent premium means you pay nothing if you lose.
- Check the limit, the conditions and when the insurer can withdraw cover.
- It is a regulated insurance product; the question is fit, not legitimacy.
How we arrange it
One outline. We take it to the insurers that write ATE insurance.
You don't need to find, contact and brief each insurer yourself. Send us one confidential outline; we approach the market on your behalf and bring the terms back side by side.
Going direct
- Each insurer, separately
- Repeated to every insurer you approach
- Research who writes this kind of risk
- Different formats, hard to compare
- Calls, forms and follow-up with each one
Through us
- Us, once
- Shared once, and only where you agree
- We identify the markets that suit it
- Set side by side on limit, premium and conditions
- A short outline — we do the chasing
Nothing is shared with any insurer until you have agreed what will be presented, and to whom.
When ATE is worth it
- When the other side's likely costs would hurt your balance sheet
- When you face or expect a security for costs application
- When a funder requires it
- When an insolvent estate cannot risk its assets
In each case the policy turns an open-ended exposure into a defined cost.
When it may not be
When the adverse costs risk is small relative to your resources, when the forum rarely shifts costs, or when a high contingent premium would absorb much of a modest recovery.
Self-insuring can be rational for a well-capitalised claimant with a strong case.
Is ATE insurance a con?
No.
ATE is a recognised insurance product written by insurers and widely used in commercial litigation. Concerns have been raised in the past about premium levels in some consumer markets, which is why it matters to read the terms: the limit, the premium, the conditions, and when the insurer can withdraw cover.
What to check before buying
- The limit and whether it matches the realistic adverse costs
- What happens to the premium if the case settles
- The conditions you must follow
- The circumstances in which cover can be withdrawn
- Whether the policy can be used as security
- The insurer's financial standing
Frequently asked
5 questions · answered in plain terms
Is ATE insurance a con?
No. It is a recognised insurance product. As with any policy, the value depends on the terms, so check the limit, premium, conditions and withdrawal rights.
What happens to the ATE premium if my case settles?
It depends on the policy. Many contingent premiums become payable on a successful settlement, often from the settlement sum.
Can an ATE insurer cancel my policy?
Policies usually allow the insurer to withdraw in defined circumstances, such as a material fall in prospects or a breach of conditions. The wording sets out what happens to cover already provided.
Is ATE worth it if the other side is unlikely to get costs?
Less so. Where the forum rarely shifts costs, the adverse costs risk ATE covers is small and other cover may matter more.
Should a company with a strong balance sheet buy ATE?
Sometimes. Even well-capitalised claimants use ATE to cap a large adverse costs exposure, to meet security or to keep the risk off the balance sheet.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.
Related