What is ATE Insurance?
After the Event Insurance is used by many Claimant law firms in England and Wales and is also known as Legal Expense Insurance. It is a type of policy that provides the Claimant with legal protection against paying the Defendant’s legal costs in the event their compensation claim is unsuccessful.
After the Event ATE insurance is usually offered in no win, no fee claims and is purchased by the Claimant at the start of the claim but is only payable if the claim is successful and paid at the end of legal action. This is opposed to Before the Event insurance (BTE) covering a person or business for legal cover before any case arises.
There are many types of Legal Expenses Insurance which provide protection for Claimants for potential costs in disputes such as property, employment, personal injury or contracts for goods and services.
How Much Does ATE Insurance cost?
The cost of an ATE Insurance premium depends on the type of case being pursued, as well as the prospects of success for the case and when the policy is purchased. The cost of the cover is usually only payable if the claim is successful and most law firms will deduct the cost from the Claimant’s compensation on completion of the case.
What Costs are Covered by ATE Insurance?
In many types of claims, Claimants can be held liable to pay the costs incurred by the Defendant in the event that the claim is unsuccessful. The types of costs that ATE insurance covers include the disbursements incurred by both the Defendant and Claimant Solicitors including Court fees, Counsel’s fees, medical reports etc.
Is ATE Insurance Necessary if QOCS Applies?
In Personal Injury claims which commenced before April 2013, the Claimant’s Solicitors could claim the costs for their ATE Insurance and their success fee from the Defendants in the event that their claim was successful. If a case was lost, the defendant’s costs were paid by the ATE Insurer.
After 1st April 2013, Qualified One-Way Costs Shifting (QOCS) was introduced for all Personal Injury claims. Introduction of QOCS means that a successful Claimant will be able to enforce their costs against the Defendant however, a successful Defendant will be unable to claim costs against the Claimant in most cases.
Following the changes made in April 2013, the Claimant in a Conditional Fee Agreement claim is now responsible for covering the costs of the ATE Insurance and the success fee. The success fee is now capped at 25% of the damages awarded excluding damages for future loss and care and is usually deducted from the Claimant’s damages when the case has settled.
QOCS was introduced to protect the Claimant from having to pay the Defendant’s costs in an unsuccessful claim. If this is the case, then why are ATE Insurance policies still taken out for personal injury claims?
Why is it Prudent to Purchase ATE Insurance Products in a Personal Injury Claim?
Unfortunately, there are some circumstances where the Claimant may end up paying the other side’s costs, leaving them at financial risk, which is why taking out ATE insurance is always a good idea when pursuing a compensation claim for personal injury. An ATE policy would usually cover the costs in the following circumstances:
- If a Defendant makes a Part 36 offer and the Claimant fails to beat the offer, they risk having to pay the Defendant’s costs up to the level of damages recovered.
- If there are disbursements on a claim such as the fees for medical reports, and the claim fails, the cost of the disbursements will not be recoverable from the Defendants.
Are There Circumstances Where an ATE Provider Can Refuse to Pay Out?
Many LEI agreements are subject to extensive and onerous clauses. An assessment of costs is usually carried out by an ATE provider and whilst the assessment is usually in the Claimant’s favour, there are circumstances when the provider can refuse to pay the costs and disbursements in a claim. If a claim is unlikely to succeed, it is unlikely that a Legal Expenses Insurer would agree to fund the case. If a case which has been taken on by a Claimant Solicitor with prospects of success of less than 51%, fails, any disbursements on the case will not be covered by the ATE Insurer. The LEI may also refuse to pay out in cases with any element of fundamental dishonesty, misrepresentation or fraud, as well as if the claim has been handled poorly.
How can we Help?
ATE Premiums remain recoverable in inter-partes disputes in clinical negligence cases, and thus it is crucial that you obtain expert Costs Draftsman input to ensure any premium is recovered in full.
LPS can provide an impartial service in drafting your Bills of Costs and negotiating this with either a paying party of the LEI provider. We will ensure that the best result possible is achieved and that any outcome is in line with a reasonable and comparable detailed assessment determination. We will only charge on a % basis of the profit costs recovered, and often our charges are recoverable from the LEI provider.
To find out more on how we can help with LEI Claims, have a look at our website. Our Costs Director, Robert Collington, can be contacted via email on enquiries@legalpracticesupport.co.uk or by telephone on 01204 930234. You can also get in touch with us via the Contact Page on our website.