During the latter part of February 2013 and throughout the whole of March, we at TheJudge, together with all of the litigation funders and insurers with which we work, saw an exceptionally large surge of applications for After the Event (‘ATE’) insurance and third party litigation funding.

As a result, literally thousands of policies were written in the last few weeks of recoverability, with many ATE insurers having teams in place until midnight on Sunday 31st March, to process last minute applications and policy acceptances. At TheJudge, not only did we have brokers working over the weekends throughout March to cater for the additional workload, but we also invited litigation insurance underwriters into our offices to speed up the decision-making process, thereby offering a last minute lifeline to commercial litigators trying to secure ATE insurance before the window of recoverability closed.

All in all, it was an extremely successful, although extremely hectic, March and I think it’s safe to say we’ll never again see such a huge volume of cases in such a short period of time.


As our director James Delaney explained in The Law Society Gazette recently (see story), the quality of cases which we saw during the chaotic March period was a lot higher than expected. However, this could be down to the fact that the lawyers hadn’t had the ‘luxury of trying to settle the case ahead of applying for cover or indeed using ATE quotes as leverage to try and initiate a settlement.’

In other words, the ATE insurance market suffered less adverse selection during February and March 2013 than in a ‘normal’ pre-LASPO month. The implications of this way of thinking for the future depends on how litigators now respond to the post-Jackson ATE insurance market. As James commented, it’s important to remember that leaving all litigation insurance applications until all settlement attempts have failed will inevitably increase the price of premiums, meaning clients lose more of their damages. Routinely using funding products such as ATE insurance and litigation funding will keep the cost more palatable to clients, meaning more benefit from retaining increased proportions of damages.


Whilst most ATE insurers remain committed to the litigation insurance markeplace, there is no doubt that the landscape will change. With ATE insurance premiums no longer being recoverable from the losing party, clients will be liable to pay their own litigation insurance premium either at the outset or from the damages and/or costs recovered at the conclusion of the dispute. As a result, it’s becoming increasing important to really understand a client’s expectations and abilites in relation to premium payment.

Historically, the trial stage premiums for commercial cases have fallen somewhere between 40% and 60% of the sum insured, with discounts applying in the event of an early settlement. While many industry experts agree that premiums should come down, as the emphasis really is on price, underwriters will of course take a much keener interest in the cover required : damages ratio, similarly to litigation funders, to ensure that the case is proportionate and can stomach an ATE insurance premium.

This will certainly bring about a real shift in the way ATE underwriters consider and price applications for litigation insurance but specific information on the new products is either not yet forthcoming for many insurers, or (perhaps understandably) presented in a confusing way meaning it is very tricky for lawyers to be able to ‘compare apples with apples’, when advising clients on the funding options available.

This is a view which Rachel Rothwell, editor of Litigation Funding magazine, who has recently praised insurers for their quick work in terms of creating post-Jackson products, appears to agree with. She recently commented: ‘It will be difficult for lawyers to navigate their way through the new product range and make sure that they are choosing the right insurance to protect their clients.’

Fortunately, TheJudge is always on hand to assist lawyers and clients in a variety of ways, including:

  • Understanding the similarities and differences between the newly launched litigation insurance and funding products
  • Forcing litigation insurance and funding markets to address the elephant in the room which many are inevitably reluctant to speak about…PRICE
  • Understanding a client’s position at the outset and suggesting creative litigation funding and insurance structures to ensure that the ultimate financing package meets their demands and needs as cost-effectively as possible, e.g. by discussing excess positions (meaning the client retains an element of risk, bringing the litigation insurance premium down), staged cover structures, “pay as you go” cover, cover for only certain aspects of the case, etc.
  • Providing detailed analysis on which funding products are more expensive at certain points in the litigation, on a case-by-case basis, to assist your clients in understanding exactly which offer suits their needs best
  • Providing CPD accredited training sessions to departments and law firms, to bring fee earners up to speed on the constantly developing litigation funding and insurance marketplace to ensure they are providing clients with the correct advice

And the best part is we do all of this free of charge.


If you would like more information on what litigation insurance or finance products are now available, or you would like to book a free CPD accredited training session for your team, contact us and we’ll be more than happy to assist.