After the Event insurance is a type of legal expenses insurance that is typically purchased after a legal dispute has arisen. It is commonly used in civil litigation, where the claimant seeks protection against the risk of having to pay an opponent’s legal costs if they lose the case. Typical buyers include individual claimants, law firms, and litigation funders. ATE insurance is especially popular in ‘no win, no fee’ cases, where claimants want to minimise the financial risks they are exposed to.

The UK ATE insurance market offers a range of policy types tailored to different needs. These include:

• Single-case ATE policies are designed for individual cases, typically for personal injury, clinical negligence, or commercial litigation.

• Master policies are arranged by law firms with insurers, covering multiple clients or cases under one umbrella agreement.

• Capital protection policies are purchased by litigation funders or law firms to protect their financial investments in high-value cases.

• Group litigation policies cover multiple claimants involved in collective legal actions, for example under a Group Litigation Order (GLO).

ATE insurance often complements litigation funding and ‘no win, no fee’ arrangements, providing an additional layer of financial protection. In ‘no win, no fee’ cases, the claimant does not pay their solicitor’s fees if they lose. However, without ATE insurance, they could still be liable for the opponent’s costs, expert fees, and court charges. Litigation funders may also purchase ATE insurance to safeguard their investments as well as the payment of any adverse costs if the case is unsuccessful.

The cost of ATE insurance typically ranges from 10% to 20% of the amount of cover sought, though this can vary based on several factors. These include the complexity of the case, the likelihood of success, the amount of cover needed, and the stage of litigation when the insurance is purchased. Premiums may be deferred until the conclusion of the case or linked to the outcome, reducing the upfront cost for claimants.

In group litigation or collective actions, ATE insurance provides significant benefits by pooling risk among multiple claimants. This type of policy can offer comprehensive cover for adverse costs, expert fees, and court expenses across a large group, often at a lower individual cost. It also simplifies the management of legal expenses, ensuring all participants are adequately protected, regardless of the outcome.

ATE insurance is normally only available for cases with a reasonable prospect of success, typically based on a lawyer’s assessment. Insurers are more likely to offer cover when the case is deemed strong or has a higher likelihood of achieving a positive outcome. For cases with lower chances of success, it may be more challenging to secure ATE insurance, and/or the premiums may be significantly higher.