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Litigation Insurance in United Kingdom
Costs shifting makes adverse costs the dominant quantifiable exposure.
UK
London
51.51° N · 0.13° W
- Loser-pays costs shifting
- Security for costs applications
- Costs budgeting
Illustrative. The forum decides which exposures exist at all: its costs rules, its approach to security and how its judgments travel.
How can litigation insurance work in United Kingdom?
Costs shifting makes adverse costs the dominant quantifiable exposure. That can shape which exposures dominate — loser-pays costs shifting, security for costs applications, costs budgeting — and therefore which structures may be considered. Availability, admitted status and enforceability of any instrument depend on the forum and on policy terms, and are confirmed matter by matter, subject to underwriting.
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Forum file
United Kingdom
UK
- Costs rule
- Loser pays
- Weight of adverse costs
- High
- What tends to dominate
- Adverse costs; security for costs
- Relevant cover
Risks to check first
- Loser-pays costs shifting
- Security for costs applications
- Costs budgeting
Structure may follow the procedural rules of the forum, not the parties' nationality. General orientation, not advice; rules have exceptions.
Common risk types
In England and Wales costs generally follow the event, so a losing claimant can expect to pay a substantial share of the winner's costs.
Security for costs is regularly sought against overseas, insolvent and funded claimants. Costs budgeting in larger cases makes the likely exposure more predictable. Scotland and Northern Ireland have their own procedural rules and should be considered separately.
Relevant products
ATE for adverse costs and disbursements is the core instrument, often with an anti-avoidance endorsement or deed of indemnity for security.
Capital protection supports funders, and judgment preservation cover is available for significant first-instance wins.
Key considerations
ATE premiums have generally not been recoverable from the losing side since April 2013.
The Supreme Court's 2023 PACCAR decision affected the enforceability of many litigation funding agreements; reform has been recommended, so check the current position before relying on any funding structure.
Enforcement
English judgments are enforceable domestically through well-established routes.
Enforcement abroad depends on treaties and local law; the UK has joined the 2019 Hague Judgments Convention, which may assist with some contracting states.
Frequently asked
Who pays legal costs in the English courts?
Generally the losing party pays a substantial part of the winner's costs, as assessed by the court, although the court has discretion.
Are ATE premiums recoverable in England and Wales?
Generally not for policies taken out on or after 1 April 2013, with limited exceptions.
Can ATE insurance be used as security for costs in England?
Courts have accepted ATE as security where the policy gives the defendant real protection, typically through an anti-avoidance endorsement or deed of indemnity.
Is litigation funding legal in the UK?
Yes. Third-party funding is widely used in England and Wales. The 2023 PACCAR decision affected how funders' returns can be calculated; check the current position.
Does Scotland have the same costs rules as England?
No. Scotland has its own courts and procedural rules, so the position there should be considered separately.
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.
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