By Matthew Pascall, Senior Underwriting Manager
(Estimated reading time: 3 minutes 38 seconds)
What is After-the-Event Insurance and What does it Cover?
It is a contract of insurance. So long as you and your client comply with the terms of the policy, in the event that your client becomes liable to pay the other side’s costs, we will pay those costs and we will also pay back any disbursements your client has incurred during their case. We can provide up to £2m of cover.
What doesn’t it cover?
It doesn’t cover your fees or those of counsel you instruct. The total amount we can pay in the event of a claim is agreed at the outset (“the limit of indemnity”). It doesn’t cover appeals, but if your client has to resist or pursue an appeal arising out of a case we have insured, we will always consider offering insurance if we are satisfied there are good prospects of success.
How much does it cost?
For commercial cases (not involving personal injury claims or claims arising out of alleged clinical negligence) premiums reflect the amount of cover you need and the likely damages your client is likely to recover.
Typically, premiums are between 10% and 50% of the amount of cover we provide. When it comes to settling a case, we will always be pragmatic about the premium and are able to accept a discounted premium in certain circumstances if that will help close a deal to settle a case on terms that work for your client.
When is the premium paid?
All our premiums are fully deferred and contingent. That means your client only pays if and when they settle the case on favourable terms or win at trial. If they lose, there is nothing to pay.
Premiums are usually staged: this means the amount that is paid depends on the point in time when the case settles. The closer the case gets to trial, the more the client will have to pay because the risk has increased. We can agree a single, flat rate premium.
How do I get insured?
If you are likely to insure relatively large numbers of cases that each require less than £200,000 cover, our Espresso ATE product provides your firm with the ability to assess cases yourselves and, using our online system TOPS, issue policies. You are then free to manage these cases without having to refer back to us.
We can agree specific premium rates that can be discounted to reflect your firm’s experience and success rate. For more complex cases requiring more cover, we ask that you submit these cases to us. Our experienced underwriting team will then assess the case. If we conclude that the chances of success are 60% or better, we will offer you insurance.
Do I lose control of the case if it is insured?
If you have delegated authority under an Espresso scheme, you are free to issue proceedings as well as make, reject or accept offers of settlement without having to refer to us. If we have issued the policy, you do need our consent to take these steps, but we pride ourselves on our close working relationship with solicitors and we rarely disagree with their assessment of their cases and the decisions they take about them.
What happens if things go wrong?
Litigants lose cases – that’s why we’re here. Claims are handled quickly and without fuss. The other side’s costs incidental to taxation are included within the cover we offer.
Is disbursement funding available?
If we have decided to insure a case, we can provide disbursement funding to your clients to fund such things as court fees and expert’s fees. Loans are Consumer Credit Act compliant with a rate of interest of 10% (compounded monthly). Our agreements are with your clients and not your firm, thus keeping the liability off your balance sheet.
Are there any restrictions in Northern Ireland limiting access to ATE insurance or disbursement funding?
Not that we know of. ATE insurance and disbursement funding are both lawful and a growing feature of litigation in Northern Ireland. Third Party funding is unlawful in the Republic of Ireland, but that has no impact on the insurance and disbursement funding we can offer to your clients. At present we cannot offer insurance to persons domiciled in the Republic of Ireland or insure proceedings in the courts of the Republic.
For more information, please contact our commercial underwriting team by phone on 01483 577877 or by email to firstname.lastname@example.org
Barrister Matthew Pascall joined the commercial team at Temple Legal Protection, as Senior Underwriting Manager in November 2017.
Matthew was called to the Bar in 1984 and joined Guildford Chambers two years later. Spending more than 30 years in practice there, he has comprehensive knowledge and experience of the commercial legal sector and is listed in the current Legal 500 as a Tier 1 barrister.
Previously Matthew had been providing ongoing consultancy services to Temple Legal Protection for some time and therefore has prior insight into the company and established productive relationships with our clients. His knowledge of the commercial legal sector and litigation practice is invaluable to the business and our clients, providing specialist experience to lead the commercial litigation insurance team.
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