Most first-time litigants have probably never heard of BTE or ATE insurance and are unfamiliar with the concept. However, having it could prove invaluable and may well influence a litigant’s decision as to whether or not to proceed with their case.
What is BTE and ATE insurance?
ATE stands for “After the Event”. There is also BTE (“Before the Event”) insurance which is sometimes called Legal Expenses Insurance, or LEI. BTE/LEI is an additional benefit that some home, car or other insurance providers offer. There is a mistaken belief by many that if you have BTE/LEI cover as part of your insurance, this only applies to legal disputes that relate to the insurance policy itself. Actually, BTE/LEI covers a range of legal disputes, usually including bringing or defending some litigation claims. It is therefore always a good idea to check with your insurer whether they will cover the litigation when you first consider taking legal action. We can discuss this with you and advise you about this possible option.
What are the benefits?
If you have the benefit of BTE/LEI and it covers the claim you are intending to bring, you will not have to pay some or all of your legal costs to solicitors acting for you in the claim (depending on the terms of the agreement). BTE/LEI can cover your legal fees from the outset of the claim, including the pre-action stage, which is before court proceedings are issued.
What if I don’t have it?
If you don’t have BTE/LEI, you will be responsible for paying your solicitor’s legal fees, as well as any third-party costs such as barrister’s fees (called disbursements). In addition, if your claim is unsuccessful, the court will usually order you to pay your opponent’s legal costs (called an adverse costs order). An adverse costs order is usually a litigants’ greatest concern. If you have an ATE insurance policy and an adverse costs order is made against you, the ATE insurer will pay those costs.
It may also be possible to obtain cover to fund any disbursements you need to pay as part of the litigation so that you would not have to pay anything until the end of the case.
How are the premiums calculated?
Premiums for ATE insurance are usually calculated on a percentage basis calculated on the amount of costs incurred. The percentage usually increases the closer you get to trial. Premiums are usually only payable if your claim is successful. As such, it is sometimes considered to be akin to a “no win, no fee” agreement that some solicitors may offer clients as a way to fund their claim, as if you lose, you will not have to pay the premium.
Some premiums can be very costly and may often be disproportionate to the value of the claim, so you should think carefully about whether ATE insurance is right for you in your circumstances. We will discuss with you whether ATE is a suitable option for you depending on your case and your your personal circumstances. Some cases, such as professional negligence cases, are more attractive to ATE providers and therefore you are likely to be provided with a broader range of options.
Here to help
Here at Stephens Scown, we are specialists in dealing with professional negligence claims and other cases where ATE policies are taken out to support and protect our clients. We have links with a number of ATE providers and insurance brokers who can go out to the market to obtain the best product for you. We are able to provide you with a preliminary decision quickly to help you decide on the best course of action. Contact our Commercial Disputes team to discuss how we can help you.