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Eroding confidence – when things go south with ATE insurance

By Nicholas Ellor, Senior Underwriter

(Estimated reading time: 2 minutes 38 seconds)

In the context of ATE insurance and before the trial of the claim, this often will mean the confidence in the insured’s case has been seriously eroded. Unsurprisingly the cause of such erosion can be a number of factors – disclosure may throw up inconvenient evidence, an expert’s report may be less than supportive, or inconsistencies identified in a key witness’s recollection of events that took place a long time ago.

In such circumstances, the insured’s solicitors will need to co-operate and consult with all other relevant stakeholders, including the insurer, to collectively agree a strategy and way forward to enable the insured to extract themselves from the litigation on the most favourable terms possible.

Such a strategy will have to be formulated and agreed at pace, due to the insurer’s understandable desire to limit as far as possible the size of its liability for adverse costs under the policy.

A steady hand on the tiller and cool heads are required by all.

Although not required in legal actions where the ATE insurance premium is irrecoverable from the opponent, it is invariably the case that the opponent will have been put on notice that the insured has ATE insurance and the limit of indemnity disclosed.

This may be because the insured wants to demonstrate the strength of its position or because a policy was required for security for costs purposes. Clearly from a negotiating point of view, it is essential that the ATE insurance remains in place and the impression given to the opposition that the insured still has the backing and support of its insurer.

There may however be instances where the insured is prepared to continue with the case uninsured, but this, in our experience, very rarely if ever happens. Behind the scenes of course, there will be negotiation between the insurer and the insured’s solicitors as to what is to happen and by when.

Deteriorating prospects? Our modus operandi

Under the terms of Temple’s insurance policy, we have the right to terminate the policy if there has been a material deterioration in the prospects of a successful outcome at trial for the insured. If we terminate in these circumstances, subject to the insured having complied with their obligations under the policy, the policy will cover the insured for adverse costs up to the date of termination and up to the agreed limit of indemnity.

Any sudden offers made by the insured at substantially discounted terms compared with previous offer, will inevitably sound alarm bells and put the opponent on notice something is afoot. Often discontinuance on a drop-hands basis will prove to be the most beneficial outcome and similarly the end position will be discontinuance based on an agreed sum by way of contribution to the opponent’s costs.

Temple takes a commercial, realistic and pragmatic approach when the insured’s case becomes compromised. Our objective and purpose in such circumstances is to support the insured and the legal team to extract him from the proceedings on the most beneficial terms possible.

If you have any further questions about this article or would like to find out about litigation/ATE insurance for your clients’ commercial disputes, please call Nicholas Ellor on 01483 514815 or email

Nicholas Ellor

Senior Underwriter
Read articles by Nicholas Ellor

Nicholas Ellor

Nicholas is a Senior Underwriter within the commercial underwriting team.

Prior to joining Temple, Nicholas had over twenty years’ experience working as a solicitor in London on both contentious and non-contentious company commercial and corporate matters. Having been a practitioner, he is fully aware of the pressure and time constraints a commercial litigator has to operate under and brings that expertise insights to the table and provides a fast, highly professional service.

His experience and knowledge enhance our teams’ abilities to quickly and expertly assess claims and to provide intelligent and timely support throughout the legal process.



Read articles by Nicholas Ellor