After the Event insurance (ATE) provides financial protection against legal costs in litigation or arbitration, typically for claimants. It’s taken out after a dispute has arisen but before significant costs have been incurred. ATE cover is available for most areas of civil and commercial litigation (excluding matrimonial and criminal matters).

ATE insurance can typically be arranged to cover:

• Adverse costs (the client’s risk of paying their opponent’s legal costs if the case is not successful). 

• Own-side disbursements (e.g. expert reports, court fees, barrister’s fees)

• The client’s own solicitor’s fees

How much a premium is, and the way it is structured will depend upon the type of case, the stage of the case, and the changes for successful settlement, enforceability and recovery. 

One of the key benefits of ATE insurance is that premiums are often contingent on success and recovery of claim proceeds. This means the premium is only payable if the case succeeds. However, there are multiple structures available.

• Flat premium - a single-stage, upfront premium, payable at the outset of the policy. This type of premium remains with the insurer (is non-refundable) regardless of case outcome.

• Staged premium (increasing at set case milestones, usually calculated as a percentage of the sum insured, increasing over time)

• Percentage-based (linked to recovered proceeds)

ATE should ideally be purchased before proceedings have been issued, it may be available after proceedings have been issued, although the later the date of purchase, the more expensive the premium is likely to be. A delay in taking ATE may make the obtaining of cover more difficult, as the risk profile of the matter changes over time. 

• Mitigates financial risk of disputes while maximizing reward; 

• Almost always lower cost than litigation funding.