After-the-event (ATE) insurance has branched out beyond personal injury cases and is now available for all sorts of litigation, says Nick Robson, vice-president and general counsel in the Toronto office of the TheJudge Global.

“Traditionally, people have associated ATE insurance with the personal injury market. But we’ve opened up and added employment litigation, medical malpractice, commercial litigation, professional negligence, class actions — a whole host of things,” he tells AdvocateDaily.com.

When litigation is started, either by an individual or a corporation, the client has three areas of risk, Robson says. They have to a) pay their own lawyer’s fees and b) disbursements, and c) there’s also the potential for adverse costs, which include the other party’s legal fees, disbursements and expenses, he says.

“ATE insurance helps mitigate those risks. The lawyer will outline the risks of litigation to the client and let them know that an insurance policy is available to mitigate those risks in the event that the case collapses, or is unsuccessful for whatever reason.”

Robson says his firm offers a “basically no-win, no-fee insurance policy. If the client loses the case, they don’t pay the premium, and all of their disbursements and adverse costs’ exposure, if applicable, are covered up to the limit of indemnity. If they win the case, that’s when they pay the premium.”

TheJudge also provides litigation finance through third-party funders and litigation finance companies.

“You can pretty much get financing for anything involving your case. It could be fees for your lawyer or the disbursements that a lawyer will spend to bring a case,” he says.

“Traditionally, banks don’t like to give money to legal cases because they see them as risky. So, much of the funding comes from private specialist third parties who we deal with as a source of the cash.”

Robson says two types of financing are available.

“There’s litigation financing itself, which is normally called equity release (to release the funds otherwise tied up in a firm’s disbursement account for instance), and case-specific funding, where the client doesn’t have the money for their lawyers fees and/or their own disbursements, to take on a big case.”

For example, he says, a commercial case involving two multinationals can cost millions of dollars in fees and disbursements. Even if a corporation has the money, “it doesn’t have to tie it up for this one particular case and have that risk sitting on their books for years. We’ll mitigate the risk immediately with an ATE policy, and we’ll also finance the case to truly remove it from the company balance sheet.”

According to TheJudge’s website, “Third-party funders view legal claims as financial assets, in which they may invest in exchange for a return based upon the success of the funded litigation or arbitration. Litigation funding providers are able to offer a wide variety of financing options for parties seeking off-balance sheet solutions.

“At its most straightforward, the third-party funder will finance the legal fees and expenses involved in pursuing the claim on a non-recourse basis, in exchange for what is essentially an equity interest in the claim. If the case is successful, the litigation finance provider recovers its capital invested plus a success fee.

“If the case is unsuccessful, the funder loses its investment, receives no success fee and has no recourse against the funded party.”

The company can also bring in other types of financing where the legal claim is used as collateral. They include working capital for the business during the life of the claim, officeholder fees and expenses, advanced damages, claim/award purchasing and portfolio financing.

The bottom line, Robson says, is “there are many options out there other than traditional banks.”  Through its ATE insurance and litigation finance, TheJudge is simply “levelling the playing field.”