Dispute type
Group / Collective Actions Insurance
Risk transfer that may be arranged around the cost and capital profile of group / collective actions.
- A judgment or award won
- A judgment against you
- Funder capital deployedConsidered
- Law firm fees and WIP
- Security for costs
- The opponent's costsConsidered
- DisbursementsConsidered
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
Can group / collective actions be insured?
Group and collective actions usually combine third-party funding with ATE covering the group's or class representative's adverse costs. Funders may protect part of their capital, and portfolio structures can apply across related claims.
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Key points
- Up-front spend is significant before liability is decided.
- Costs allocation between claimants must be settled early.
- Funding and distribution terms may be reviewed by the court.
The risk profile
Group and collective actions combine many claims, significant up-front spend and complex funding arrangements.
Adverse costs may be shared among claimants or concentrated on a representative.
Which structures apply
ATE for the claimant group or class representative; capital protection and portfolio cover for funders.
Illustrative scenario
A group of 2,000 claimants brings product claims under a group litigation order. ATE covers the group's share of adverse costs, and the funder protects part of its capital.
Figures are invented to show the mechanics. They describe no real client, matter or outcome.
Underwriting considerations
Claimant book-building, common issues, funding and distribution terms, and how costs are allocated between claimants.
Frequently asked
Who is liable for adverse costs in a group action?
It depends on the procedure and any court order: costs may be shared among claimants or fall on a representative. ATE is typically arranged for the group or representative.
Are group actions usually funded?
Many substantial group and collective actions are backed by third-party funding combined with ATE.
How is ATE priced for a group action?
On the case as a whole: merits, the size and cohesion of the group, the budget and the defendant's ability to pay.
Do all claimants need to be insured?
Usually the policy is arranged for the group or the representative, so claimants do not need individual policies.
Can a group action settle if the insurer objects?
Policies usually require the insurer to be consulted on settlement; the funding and litigation management agreements also govern it.
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.
Where to go next
Relevant cover
Other disputes
Jurisdictions