Commercial Litigation

Frequently Asked Questions

What is After the Event insurance?

ATE is an insurance that is taken out after a dispute has arisen. It insures a party to a dispute against the risk of the liability to pay their opponents costs.

The Access to Justice Act 1999 came into effect in April 2000 and provides that the premiums charged for ATE insurance are payable by the losing opponent, as an additional liability, if the legal action is successful.

Commercial lawyers need to be aware of the importance of ATE insurance for their clients’ cases – because solicitors have a professional obligation and duty under 2.03(g) of the Solicitors’ Code of Conduct to advise their clients of the existence and/or availability of insurance to manage their client’s litigation risk, regardless of the type of retainer agreed.

What does Temple’s insurance cover?

The insurance will indemnify the insured’s liability for their opponent’s costs and own disbursements, excluding own counsel’s fees.

Is there any assessment fee or joining fee for using Temple?

No. The assessment by Temple’s expert underwriters is completely free and we do not charge any fee for joining a delegated authority scheme.

 What if my client has before-the-event (BTE) Insurance?

Temple assist you in deciding whether ATE is preferable to BTE insurance and in what circumstances. We can also cover cases that have existing BTE but where the indemnity provided by the policy is inadequate, or becomes exhausted.

 What types of cases can be insured?

Any type of commercial dispute that is not a personal injury or clinical negligence matter (please see our other products for these types of cases) which has good prospects

 When does cover have to be arranged?

As soon as you have enough information to decide that the legal action has reasonable prospects of success. Clearly it is in your client’s best interests to have insurance cover as soon as possible and ideally, before your opponent has made a part 36 offer.

What types of litigation are suitable for ATE?

Any type of claim excluding family and criminal work can theoretically be insured under an ATE policy as long as the case has suitable merits and the opponent can pay the costs including the premium.

Having said this there are certain types of litigation that are much harder to insure than others for example boundary disputes, contentious probate, judicial review and disputes that are essentially about oral evidence.

How are the premiums structured?

The premiums are stepped, which means that the amount payable depends on the stage at which the legal action concludes. Temple’s policies have four steps. The earlier the case settles, the lower the premium will be. All steps (and the increases in the premium) are identified at the inception of the policy.  This stepped approach encourages the opponent to settle earlier, when the premiums are cheaper, thus giving your client a speedier resolution of their issues.

What happens after the policy is issued?

Temple is firmly of the view that a litigator’s job is to litigate. Therefore our reporting requirements during the life of the case are as minimal as we can make them. You will need our permission to commence proceedings if the case has been insured prior to that stage.Thereafter, a brief quarterly update is sufficient. You need to inform us if the prospects of the case deteriorate materially and of any offers that are made to your client that they wish to reject on your advice, before doing so. We also need to know the trial date and obviously the outcome of the case. You account to us for the premium within 14 days of it having been obtained from the paying party.

Who pays the premium if the case is successfully settled or won?

The premium is paid by the opponent as part of your client’s entitlement to recover their costs.

Who pay the premium if the case is lost or abandoned?

Part of the cover under a Temple policy provides indemnity for the full cost of the premium. The policy limit is defined to include the premium in addition to the sum insured.

 When is the premium payable?

Payment is deferred until the conclusion of the legal action so it is payable when you recover it from your opponent.

What happens if the case is won and the opponent becomes insolvent?

Temple, in common with other ATE insurers, does not insure the liquidity of the opponent. Therefore the insured retains the contractual liability to pay the premium. Such an event is very rare in our experience, since the litigators with whom we work are very good at avoiding litigation against parties who can not pay

Are premiums recoverable in full?

We have an excellent track record of recovering our premiums in full by providing technical support to resist challenges. We ensure that we provide the most competitive premiums possible to help with this.

 Do Temple provide delegated schemes?

Yes. Delegated authority schemes can be offered to any firms with a reasonable volume of work and can be offered for many different types of litigation.

How frequent are the reporting requirements?

If you operate a delegated authority scheme then there are minimal reporting requirements, using simple status chages through our online policy system. For one-off cases, you need to update us on significant developments in the case and/or at 6 monthly intervals, whichever comes first.

 What happens if a Part 36 Offer is made?

Again, if you have a scheme with us, then the decision to make or reject offers will be delegated fully to you by us. However, with one-off cases you will be required to tell us of any offers being made and we will consider them with your guidance. We will normally support your recommendation.

 What happens if we fail to beat a Part 36 offer?

Our policies provide full Part 36 cover, meaning that if you fail to beat a Part 36 offer then we will pay claims for adverse costs arising from the same, unless the client has ignored your advice to accept any given offer.