When it comes to purchasing any type of litigation insurance, including ATE insurance, price tends to be the primary consideration in the minds of would-be purchasers and those representing them.

And that’s understandable – in the current landscape, the cost of litigation insurance is borne by the purchasing party and, given the majority of transactions take place in the context of claimant litigation, the price of that insurance has a major effect on the economics and the viability of pursuing an action, as well as impacting the settlement dynamics during the lifecycle of the litigation.
But, in my opinion at least, not enough weight is applied to insurer selection, and specifically how that insurer is likely to behave during the policy period. Insurer behaviour can impact on the ability of the representatives to conduct litigation in a cost-effective manner as well as in a way that is most beneficial to the policy/claimant.
This is what we broadly refer to as “case management” and it is best summarised as the manner in which insurers – including the many Managing General Agents (“MGAs”) in the market who represent insurers – conduct themselves once a policy has been agreed and is ‘on risk’.
What is interesting is that, despite many of the stages at which a policyholder needs to interact with an insurer being fairly homogenous within policy wordings, the way in which insurers can approach case management differs very significantly.

Some are quite inactive and placid, tending to rely on broad, yet important, clauses such as the general obligation on an insured to act as a reasonably prudent uninsured litigant, whereas others will require frequent and detailed updates. Those active insurers will pose questions of the insureds representatives, often requiring calls or meetings. Obliging in this way costs time and money.
In principle, this latter approach is understandable as the sums at stake are often in the millions, if not tens of millions, and is not in itself as a negative, as having an active and engaged insurer can be helpful when it comes to issues such as settlement discussions that might require stakeholder input/negotiation. Indeed, knowing the insurer is close to the action can be a great comfort to legal representatives who can feel confident the insurer cannot later claim they were not properly kept informed of material information.
That said, there has been an increasing trend with some insurers possibly over-stepping the mark and causing delays/increased costs where it is not really necessary.
A specific example I encountered recently was a live policy where the claimants in question were protected litigants. The parties were in settlement discussions and the insurers were insisting on detailed written updates and requesting multiple calls to discuss potential settlement parameters with the legal team. That was notwithstanding their knowledge that the legal team, including Counsel, would have to make a recommendation to the Court, and obtain the Court’s agreement, to conduct any settlement at an appropriate figure. Standing back, this insurer should have realised that they had all the protection that they required from a ‘risk’ perspective on the basis that they were insuring a protected party. Their various questions and requests were only serving to increase costs and delay the potential for the parties to reach a suitable negotiated settlement.
This is a specific, small example but, unfortunately, there are far worse For the first time in 8 years of transacting high-value litigation insurance placements, there is an ‘A-rated’ capacity provider that is still writing business in the market and with whom I would actively advise anyone engaging TheJudge to avoid insuring risks with until such time as they are able to demonstrate that their questionable case management practices have fundamentally changed.

Whilst there are often gripes and differences of opinion with specific markets, this position is unprecedented and it is only because of our in-depth knowledge of the market and our ability to compare and contrast the working practices/approaches of differing insurers, MGAs and indeed the capacity providers behind MGAs (where they operate without full discretion from their carriers), that we are able to advise our clients of the very important considerations outside of pricing – such as insurer selection.

Robert Warner


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