Adverse Costs/Security for Costs
The risk of having to pay the opponent’s costs in the event of unsuccessful litigation or arbitration can be prohibitive for many claimants. Some good cases are not pursued due to fear that adverse costs can double, triple or more a litigant’s overall financial exposure in the event they lose. Other cases are frustrated when the defendants are granted an order to compel the claimant to provide security for their costs.
In both instances, ATE insurance can provide an indemnity to cover the claimant’s potential exposure to their opponent’s costs and, where required, the policy can be used as a means to provide adequate security for costs, either directly or indirectly underpinning a separate financial guarantee in favour of the opponent. These arrangements can help a claimant to avoid needing to pay large sums of money into court.
Own Disbursements (Expenses)
Most insurers will consider providing cover for Own Disbursements, which can include barrister’s fees, expert costs and tribunal fees.
There are several ways in which premiums can typically be structured, depending on the type of case and the limit of cover required. TheJudge have been specialists for over 20 years in negotiating premium options to meet the needs of our client’s specific circumstances.
Much like any other form of insurance, the policyholder pays a premium upfront in exchange for insurers providing the policy cover.
Deferred and Contingent Premium
Unique to the ATE market, a contingent premium means that you are only liable to pay insurers a premium if your case is successful.
If your case is unsuccessful, the insurer is liable to pay up to the agreed limit of indemnity and does not charge a premium.
Part Upfront/Part Deferred and Contingent
Essentially a balance between the two previous options. Insurers receive some premium upfront but with the balance (often being the majority portion) being deferred and contingent upon success.
These premiums are particularly commonplace for larger policies.
Staged and discounted premiums
Applicable to all premium mechanisms – it is usually possible to arrange for the amount of premium payable to be “staged” or “discounted” in order to help keep the premium due proportionate to the risk the insurers have taken.
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