After The Event (or ATE) Insurance can be a valuable asset to businesses when embarking on any kind of commercial litigation. This unique type of insurance minimises financial risk to the company as the risk is shared by an insurer who provides an indemnity for legal costs in the event that the case is unsuccessful. In simple terms, if the client loses their case at court, the insurer pays their legal fees and disbursements in accordance with the level of their cover.
Many ATE insurance policies are arranged to be deferred and contingent upon success. For the claimant, this means that no upfront fee is payable, the premium only becomes payable if the claimant wins the case. If the case is unsuccessful then no fee whatsoever is payable to the insurer. Naturally ATE insurers are choosy when it comes to providing cover and will typically only consider cases with a minimum 60% chance of success.
TheJudge, a leading broker of ATE insurance, has published this no-nonsense video guide to ATE insurance and litigation funding. However, most people are unaware of the options available to them. The video explains that ATE insurance provides a safety net against adverse outcomes by covering some or all of your legal costs. The animated video also outlines litigation funding which is ideal for claimants who may not have the financial resources to pay all their legal fees and disbursements on an ongoing basis.
Litigation funding guarantees a smooth and reliable cash flow for ongoing legal fees and expenses for the duration of the case. It also minimises the financial risk to the claimant. A funding company would finance legal fees and disbursements in exchange for an agreed success fee. As with ATE insurance, in the event that a case is unsuccessful, no success fee would be payable to the funder and the finance need not be repaid by the client.
ATE insurance and litigation funding are collectively known as litigation finance and can be taken out individually or as standalone solutions. Litigation finance should be considered by any business considering commercial litigation and is becoming more widely available, particularly to smaller commercial claims where the expected legal fees are likely to be upwards of £50,000. Find out more on TheJudge website: www.thejudge.co.uk