Litigation

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The new dawn of litigation funding: ATE insurance

01 April 2008

One of the main types of litigation funding is After the Event (ATE) Insurance (also referred to as Litigation Insurance or Legal Expenses Insurance).

ATE Insurance is a type of legal expenses insurance cover that provides cover for the costs incurred in the pursuit or defence of litigation. It is a godsend for prospective claimants who would not necessarily be able to fund litigation claims i.e. a person bringing a professional negligence claim against their accountants. However, it is particularly undesirable for companies and organisations defending litigation on a day-to-day basis i.e. the NHS.

Key characteristics of ATE Insurance:-

• Premium charged by ATE insurance companies is generally recoverable by the successful litigant as part of costs from the losing party;

• Premiums are often available on a deferred and self-insured basis so that the premium is only payable by the policyholder at the conclusion of the case and if the case is successful;

• Policyholder may not have to pay the premium or may be reimbursed for payment of the premium if the case is not successful i.e. "self insured" or "conditional upon success" premium;

• Prospects of success in the claim are over 50% to 60%; and

• ATE insurance company may wish to influence how the funded claim is run and whether a settlement offer is accepted.

Types of cases that ATE Insurance is available:-

• Commercial Contract;
• Insolvency;
• Debt recovery;
• Shipping and Construction Disputes;
• Land Disputes;
• Professional Negligence;
• Misrepresentation;
• Intellectual Property;
• Corporate, Banking and Finance litigation;
• Torts;
• Taxation disputes;
• Defamation; and
• Information Technology disputes.

For further details on ATE Insurance, please contact the litigation and dispute resolution team on 01753 279037 or email disputes@bpcollins.co.uk.