It has recently been reported that there are considerable delays in the Court system, for example, with Multi Track claims taking up to four months longer to reach trial.  Whilst in some cases, parties have little choice but to commence Court proceedings, Alternative Dispute Resolution (“ADR”) can be a much quicker and cost effective way to successfully settle a case without the stress and cost of a long and drawn out court case.  The Courts are also keen for the parties to proceed down this route, with litigation being the last resort.

Some may consider that ATE insurance is only required at the point where proceedings are issued but this does not necessarily need to be  the case.  ATE insurance is available at any stage of the case, from pre-action through to the final hearing and is beneficial to the client by removing the risk of them having to pay the other side’s legal costs if they were to lose the case.  ATE insurance can also cover own disbursements and potentially even a portion of own solicitor’s fees. The earlier the client applies for ATE insurance, the better as the insurers are more likely to offer terms as they perceive the risk to be lower early on and the cost of the premium will reflect this.

It is beneficial to have ATE insurance in place prior to any ADR/mediation taking place as this can bean incentive for the other party to settle the case.  By disclosing the fact that your client has taken out ATE insurance (with the consent of the insurer), the other side will know that the insurer has conducted their own risk analysis of the case and its merits and considers the case to be strong.  This also demonstrates that should ADR be unsuccessful, your client is prepared to take the matter to court, has sufficient financial means and have taken steps to mitigate the associated risks.

As mentioned above, ATE insurance can be taken out at any stage but it should be noted that the closer the case is to trial, the more difficult it will be to obtain insurance.  As the case progresses, the cost of obtaining ATE insurance may increase due to the insurer’s perception that settlement prospects will have reduced, with the risk to the insurer now being far greater and insurers will require a higher insurance premium be paid, making obtaining cover more difficult and more expensive for the client.  If the client looks to obtain ATE insurance after ADR has taken place, for example, there is a chance that fewer insurers may offer terms and again it is more difficult to obtain ATE insurance after failed attempts at settlement.

TheJudge is able to provide a unique service by tailoring insurance arrangements to meet our client’s needs and fee objectives.  By using our specialist knowledge and extensive insurance relationships, we can provide a range of options with regards to ATE and other litigation insurance and can also refer clients to our affiliate litigation funding arm, Erso Capital, to discuss any third party funding requirements.

For further details, please contact Donna Grayson or Kyle Hunter.

Kyle Hunter

Senior Associate

Email Kyle Hunter

Donna Grayson

Senior Associate

Email Donna Grayson