What is "After the Event" Insurance?
After the event insurance (ATE) is a type of insurance policy that is taken out after you have decided to make a personal injury claim. It is designed to cover the legal expenses associated with litigation.
What does the insurance cover?
If you instruct a solicitor on a No Win, No Fee basis, you pay your solicitor's fees only if you win your claim. You do not pay your solicitor a penny if you lose.
However, you may be liable for the defendant's costs when a claim is unsuccessful. An ATE policy is designed to cover this risk. It will also pay out any disbursements that are not covered under a No Win, No Fee Agreement such as Court fees, medical reports and barrister's fees that your solicitor has incurred on your behalf.
Combined with a Conditional Fee Agreement, ATE insurance provides total protection against the risk of having to pay legal expenses if you lose your claim.
Who can use after the event insurance?
The insurance can be used by both claimants and defendants in any type of personal injury claim, although in practice it is more often used by claimants.
When should I purchase after the event insurance?
ATE insurance is purchased after you have decided to take legal action, but before any significant legal expenses are incurred. Legal costs that occur before you purchase ATE insurance may not be covered by the policy.
When you first instruct a solicitor, they will discuss whether it is appropriate to take out ATE insurance in your particular case. The solicitor will also be able to set up the insurance on your behalf.
Who pays for the insurance?
The premium is payable by whoever benefits from the insurance policy. If your claim is successful, it is no longer possible to recover the cost of the policy from the losing side.
How much does ATE insurance cost?
If you decide to purchase insurance, the ATE insurers will vet your case prior to issuing the policy. The premium will reflect the type of claim, the level of cover and the strength of your case, that is, whether the insurance company believes that your claim has a reasonable prospect of success. For most types of claims, the ATE premium is relatively small compared to the potentially significant risk of being required to pay the other side's costs if you lose your claim.
Suppose, for example, that a vehicle overtakes you and then turns left. You come off your bike and sustain serious injuries. You wish to make a claim against the driver's insurer on a No Win, No Fee basis, supported by ATE insurance. The driver denies liability for the accident, and the matter goes to Court.
You solicitor estimates that you have a costs exposure of £13,000, made up as follows: Defendant's legal fees (£10,000), Counsel's fees (£2,000) and other disbursements (£1,000).
ATE insurance ensures that you would not be liable for legal costs, even if your claim was ultimately unsuccessful.
Qualified one-way costs shifting
ATE insurance protects claimants who may have claims that are less than guaranteed, and enables them to seek legal representation without the risk of costly fees.Qualified one-way costs shifting, or QOCS, has also been introduced for personal injury claims in order to reduce the financial exposure of all claimants, not just those who are protected with ATE cover.
QOCS means that, subject to certain exceptions, a defendant will not recover their own costs even if they successfully defend the claim. This protection was introduced following changes to the law in 2013, to ensure that all claimants, regardless of their financial position, could access justice, and would not be put off making a valid claim by concerns regarding payment of the other side's fees if they lost.
A claimant can lose QOCS protection under certain conditions, however, including in circumstances where the defendant makes an offer of compensation that proves to be better than the award a claimant later receives in Court.
ATE is a complex topic, and premiums can vary depending on the nature of your claim and how far down the legal process the claim proceeds. Your solicitor will be able to provide much more detailed guidance regarding your ATE needs and the likely cost at the outset of your claim.