What is After the Event Insurance?
If you suffer harm and someone else is at fault, you are entitled to make an injury claim against them. If your claim is successful, you will receive compensation for your pain, suffering and financial losses.
However, many people worry that if their claim is unsuccessful, they will be left with a massive bill for the legal expenses incurred during the claims process. But this is not the case, as After the Event (ATE) insurance can be taken out to cover the legal costs following a personal injury. This is usually included as part of the no win, no fee claim service.
This type of insurance can be invaluable if a case is lost, as it ensures that potentially expensive legal fees are paid by the insurance policy and not from your own pocket. ATE can be taken following any type of accident, including road traffic collisions, workplace accidents, medical negligence and sports injuries.
If you want to learn more about ATE insurance and how it can benefit you when making a claim, call 0800 470 0474 for a free consultation with a legal adviser or enter your details here to request a call back.
What is ATE insurance?
After the Event insurance, often known as litigation insurance, is a type of insurance policy that you can purchase following an accident or incident if you believe a legal claim will arise. It allows claimants to proceed with making a claim for compensation without worrying that they might lose and be left out of pocket for taking legal action.
Those who lose a claim will typically be liable to pay the defendant’s costs as well as their own, which can be very costly. With After the Event insurance, both sides’ legal fees will be covered by the policy, so there will be no financial risks to the claimant. The ATE has many other advantages, such as no upfront cost and waived premium if the case fails.
This guide will explain when and how ATE insurance can be purchased, how much it will cost and whether it is worth buying the policy.
How can you purchase legal expenses insurance?
If you were involved in an accident and want to start legal proceedings, the first thing you should do is talk to a personal injury solicitor. They will explain the options available and recommend the best course of action for your specific circumstances.
If you can proceed with a claim and have no other insurance in place, they will likely advise that you insure yourself against legal costs by taking an After the Event insurance policy.
ATE insurance is available from many UK insurers, and the cost of the cover depends on the details of each claim. The size of the case and the risk taken by the insurer will primarily determine the price of the ATE premium.
What does the ATE insurance cover?
There are various legal costs and disbursements associated with pursuing a legal claim for compensation for both parties. And, if you lose a claim, you will typically be liable to pay all these costs, both for you and the defendant. This can be very costly and leave you under a lot of financial strain. Furthermore, the financial risk could deter you from starting a claim altogether.
This is where the After the Event insurance policy comes into play. If you are insured and you lose your claim, the ATE will cover all the disbursements and legal costs incurred, including:
- Costs for obtaining medical evidence and expert reports to support your injury claim;
- Fees for expert witnesses who can provide essential testimony for your case;
- Fees associated with filing your claim or any other court-related expenses;
- Barrister fees, if one is required to represent you in court;
- Travel expenses related to the legal case, such as parking and gas;
- The cost of obtaining police reports if you were involved in a road accident or a criminal assault;
- Costs of printing and copying;
- Secretarial, paralegal and other staff time;
- Fax, telephone and postage charges;
- Any additional legal costs that might arise during the litigation or investigation process.
If you lose the claim, the ATE will also pay the other side’s legal costs, expenses, and their solicitors’ fees. This way, you can pursue compensation without any stress and know you will not be left out of pocket if the case fails.
What types of claims does the After the Event insurance cover?
The ATE policy provides cover for any type of personal injury claim as long as there is a fair chance that you will receive compensation for your losses, such as:
- Road traffic accident claims that arise from injuries sustained in car, motorcycle, pedestrian, or bicycle accidents.
- Work accident claims related to injuries suffered in the workplace due to employer negligence or unsafe working conditions.
- Medical negligence claims against healthcare providers for injuries or harm caused by negligent medical treatment or misdiagnosis.
- Public liability claims for injuries sustained in public places like shops and restaurants, such as slips, trips, and falls due to unsafe conditions.
The cost of the insurance premium can vary widely depending on several factors related to the specific legal claim. In other words, the price of the premium is not fixed and will depend on:
- The type and complexity of the claim you are pursuing – more complex cases, such as industrial injuries and medical negligence claims, typically carry higher risks, increasing the cost of the premium;
- The stage at which the insurance is purchased – if purchased early in the litigation process, the premium may be lower;
- The value of the claim – higher-value claims can lead to higher litigation costs, potentially increasing the price of the premium;
- The merits of the case – if your solicitor perceives the case as high risk, the premium will likely be also higher.
Considering this, the After the Event insurance premium can cost anywhere between £30 and potentially thousands of pounds for certain legal disputes. As a general rule, the insurer will typically charge between 30% and 45% of the sum insured. There are several pricing models, which include:
- Fixed standard premium – the premium is set at a fixed amount when the policy is taken out, regardless of the outcome or duration of the case;
- Staged premium model – the premium will reflect the progress of the case and will increase based on how long it takes to settle;
- A percentage of damages – if the case is successful, the premium is calculated as a pre-agreed percentage of the compensation awarded.
ATE insurance and the No Win No Fee agreement
The majority of ATE policies are used alongside no win no fee agreements. Also known as a Conditional Fee Agreement (CFA), no win no fee means that a claimant only pays the solicitor’s fees as and when they win the case, and their compensation is paid. The solicitor takes on the financial risk of proceeding with a claim, and there will be no risk to you.
If the case is not won, the solicitor is not paid. With an ATE policy, the reimbursement of any costs incurred by the solicitor through the claim would be paid whether the case is won or lost. Without this cover, the claimant would be personally responsible for making this payment even if they lost their litigation.
What are the benefits of the ATE insurance policy?
If you were injured due to someone else’s fault and are considering making a claim, your solicitor might advise that you take out an After the Event insurance product. The advantages of ATE legal protection insurance include:
- It gives everyone access to legal justice regardless of their financial means;
- It can be taken at any stage of the claims process;
- You do not have to pay anything upfront for the insurance policy;
- You will not be under any risk of having to pay the litigation costs if your case fails;
- You will be protected from paying the other side’s costs and expenses if you lose the claim;
- You only pay the ATE insurance premium if your claim is successful;
- Having ATE can enhance your position during negotiations and motivate the defendant to settle early, as they know you have nothing to lose if the case goes to trial;
- It offers peace of mind, knowing that your case has a good chance of success and you will not be left out of pocket if it fails.
When is ATE usually purchased?
You can take out ATE insurance at any stage of the claims process. However, it is typically purchased after a legal dispute has arisen but before any significant legal costs have been incurred. If you wait too long to purchase it, the premium could become much more expensive or even more challenging to obtain.
Nonetheless, your solicitor might not recommend taking out ATE cover from the outset. If you have a strong case with an almost certain likelihood of success, the ATE may not be necessary at all.
This legal expense insurance is often reserved for high-risk or complex cases with high potential costs. If you suffer whiplash following a rear-end collision, you will most likely not need ATE coverage. The same is true if you already have another type of suitable insurance, such as Before the Event (BTE) insurance.
If you have taken out After the Event insurance and your claim is unsuccessful, you do not have to pay the premium. In this case, the insurance policy will be seen as a disbursement and will effectively pay for itself. Furthermore, it will also cover your and your opponent’s legal costs and expenses. This protection is a crucial benefit of ATE, which ensures you will not be left out of pocket if you are not compensated for your pain and suffering.
With very few limited exceptions, the ATE premium is no longer recoverable from the defendant if you win the claim since April 2013. The exceptions include:
- Negligence claims related to mesothelioma;
- A portion of the premium covering the cost of an expert witness in medical negligence claims;
- Some publication and privacy proceedings.
If you win your case, you will be responsible for paying the insurance policy yourself. The premium is usually paid from the damages you receive at the conclusion of the case. This could significantly reduce your net return, which is why ATE is typically reserved for certain types of high-risk claims.
Are there other types of insurance for legal expenses?
Besides After the Event insurance, another common type of insurance for legal expenses is Before the Event (BTE) insurance. This is purchased before an accident, and the prospect of any legal issues arises, just in case something happens.
BTE is often included in home, motor and building insurance policies or offered as an optional extra. If a legal case arises, the BTE could cover all or some of your litigation expenses and may even cover the other side’s costs.
If you are a member of a trade union or professional association, they may also offer legal expenses coverage as part of their membership benefits. Legal Aid used to be available to personal injury claimants until 2000, but nowadays, it is only reserved for cases involving children who have been abused or have suffered a severe neurological injury during birth.
What are the disadvantages of ATE?
While After the Event insurance offers several benefits, there are also some potential disadvantages to consider:
- The cost of the premium can be expensive, and your solicitor must carefully consider whether taking out an insurance policy is worth the financial risk.
- If your claim is successful, the cost of the ATE can significantly reduce the compensation award you were expecting to receive.
- If your lawyer believes that you do not have a fair chance at compensation, you will not be able to receive ATE insurance.
- If, at any time during the claims process, your chances of success fall below a minimum percentage of 60%, the insurer is likely to withdraw your legal expenses coverage.
Start your claim today.
If you’ve suffered a personal injury and would like to find out if you can make a claim, do not hesitate to seek legal advice. If you can claim compensation, the sooner you start legal proceedings, the better your chances of success.
If the solicitors we work with accept your claim, they will offer you a no win no fee service and will advise you on whether ATE insurance is right for you. They will also:
- Help you gather the evidence you need to support your claim;
- Arrange a free medical exam to have your injuries assessed by a specialist;
- Handle all communication and negotiations with the defendant;
- Send you regular updates about the case;
- Work hard to win the maximum compensation you are entitled to.
To start a claim today or learn more about After the Event insurance policies, call us on 0800 470 0474 or enter your details here to request a callback.