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        After the Event Insurance Explained

        A Brief Explanation of ATE Insurance

        What is ATE Insurance?

        ‘After the Event Insurance’ (ATE) is an insurance product that is purchased to cover the legal costs of litigation. It is usually purchased by a solicitor on behalf of their client, which is usually the claimant or person bringing the action. It is a product that protects a client from paying the full legal costs of the both parties’ legal fees and disbursements.

        Qualified One Way Cost Shifting

        Prior to the Jackson Reforms, the ATE would pay both parties legal cost whether the case was settled, abandoned or lost at trial.

        However, there have been two major reforms in recent years in ATE. Firstly, in favour of the defendant, claimants are no longer able to recover ATE in the event of a successful claim from the defendant with the exception of certain medical report fees. Secondly, and in favour of the claimant, from 1st April 2013 the claimants will no longer have to pay a defendant’s legal fees in the event their claim is unsuccessful.

        This is a significant change in the costing of litigation. The price of ATE insurance has tumbled in recent years to reflect the lower risk of having to pay the defendant’s legal costs. However, the price of the policy is no longer recoverable in the event of a successful claim and will need to be either paid up front by the claimant or taken out of their damages.

        Case Example

        If a client has suffered an injury as a result of a negligent medical procedure, they can contact the Specter Partnership Solicitors to bring a claim against the medical practitioner. Once evidence has been collected and we feel that the case has merit, we will organise for the client to take out an ATE policy and issue proceedings. If the case is settled or won at trial, the ATE policy cost will then be taken from the client’s damages. However, if for whatever reason the case is not won, the defendants can no longer recover legal costs on a claimant’s ATE policy.

        However, there are still a number of circumstances under which a claimant, or their ATE policy, will be liable for a defendant’s legal costs. These include;

        If the claimant is found to be dishonest; or
        If the claimant fails to beat a part 36 offer; or
        If the claimant’s case is struck out as it has no reasonable cause of action.

        As such, it will still be necessary for a claimant to take out an ATE policy to cover these potential scenarios.