After the Event Legal Insurance
After the Event Legal Insurance
After the Event Legal Insurance also known as ATE insurance is a special sort of insurance policy that you only take out, or apply for after you have had an "event" that many lead to a legal dispute with another party.
There are many types of ATE policy in the market, and your lawyer must be careful to ensure they take out the right policy for your needs.
What is Legal Expenses Insurance?
Legal Expenses Insurance (LEI) protects you from the financial risks associated with pursuing a legal dispute.
Without it, you could be liable to pay for costs (called disbursements) such as expert reports, counsels fees and the legal fees of your opponent / defendant.
The most common types of Legal Expenses Insurance are 'Before the Event' and 'After the Event Insurance'.
Before the Event Insurance (BTE Insurance) is an insurance policy bought prior to any event or incident. This type of insurance could be attached to a number of other insurance products that you have bought, such as motor car, motorbike, or a household insurance policy. If you are a member of a Trade Union organisation they could also have something similar to a BTE policy which also covers you, and potentially your immediate family.
After the Event Insurance (ATE Insurance) is an insurance product that can be bought on your behalf by a solicitor, after an event or incident has already taken place. This is usually bought n the absence of suitable alternative BTE insurance cover, and is specifically created for the type of claim you are pursuing.
What is After the Event Insurance and a Conditional Fee Agreement?
Conditional Fee Agreements (CFA) and After the Event (ATE) Insurance products both work in tandem; protecting you from being billed by your solicitor and insurance company should your claim be unsuccessful and lose.
This combination provides you with complete protection if your legal dispute is lost or abandoned:
The Conditional Fee Agreement (CFA) means you will not have to pay your law firms fees or success fees.
The After the Event Insurance pays your opponent's legal fees if you lose.
The After the Event Insurance policy pays for all your costs & disbursements incurred (including the cost of the ATE policy) There will be exceptions to the above, such as in the event of fraud, exaggeration or dishonesty is involved.
How does After the Event Insurance work?
Your solicitor will recommend, and only with your consent setup a suitable ATE insurance policy on your behalf which will involve:
Investigating what, if any, Before the Event or alternative insurance policies you already have bought.
If BTE insurance is available, and is suitable for the value, complexity and type of claim you are looking to pursue, this may be the best route to take.
In the absence of any suitable BTE Insurance, completing an After the Event (ATE) insurance proposal form and keeping the ATE insurer up to date with the risks, will enable you to proceed with your claim.
Most solicitors are not financial advisors or insurance experts, so you may prefer to research your own After the Event insurance policy on the open market, but most will work with you to ensure you purchase a suitable policy as they will already have an ATE scheme arrangement in place deemed suitable for the value and complexity of your claim.
You only pay for your After the Event insurance policy after your case is successful - so the premium is usually paid at the end, from your final compensation award.
If your case is lost or abandoned, you do not have to pay anything for your After the Event insurance - as it is effectively a 'disbursement' and is thus covered by the policy itself (self insured), so you are not out of pocket.
Do I need After the Event Insurance?
What are the Benefits of an After the Event Insurance Policy?
As well as the peace of mind you get from knowing all potential costs and expenses are covered by the insurance, your ATE insurance gives you indirect benefits as well.
An ATE insurer will want to know the risks involved with your legal case before they issue you an ATE policy. So by having insurance in place, the strength of your case is externally validated by them, helping send a clear strong message to your opponent that your legal case has reasonable prospects of success and that you are serious with your claim.
Why should I take out After the Event Insurance?
As mentioned above, there is no legal requirement to have any legal expenses insurance to pursue a legal dispute. However without a suitable BTE or ATE insurance policy, you may be exposed to unnecessary financial risks if your claim is unsuccessful.
Your law firm representative should want to put your best interests first, and that would not involve exposing you to any unnecessary financial risks, therefore some sort of financial costs protection, whether that is BTE or ATE is highly recommended if you want your claim to be truly 'no win no fee'.