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Legal Expense Insurance

There are two types of legal expenses insurance: before the event ("BTE"), and after the event ("ATE").

BTE is usually an additional benefit found in a policy that covers another risk, such as a home or building policy. The cost is usually fairly inexpensive and the amount of cover provided is typically £50,000 or £100,000. Cover will be subject to conditions. A party to a dispute or potential dispute should find out if he has BTE cover as soon as possible. Delay may be prejudicial.

ATE is a particularly useful form of legal expenses insurance for a claimant or defendant with a case that is likely to be successful. The general position is that a litigant obtains cover against the risk of losing and having to pay his opponent's costs. One of the reasons why a market has developed for this kind of insurance is the general rule in litigation that the loser pays the winner's costs. As a premium paid for an ATE policy usually forms part of those costs it is normally recoverable from the losing party. This is no doubt the reason why many ATE insurers are prepared to defer payment of a premium until it is recovered. For this to work the insurer has to be satisfied that his insured's opponent has the resources to pay the costs. Of course in many cases the opponent will himself be insured.

We can advise on funding arrangements and we have access to ATE insurers and third party funders.

Important note

The Government has confirmed its intention to implement most of the recommendations in Lord Justice Jackson's Review of Civil Litigation Costs including a bar on the recoverability of ATE insurance premiums. As it is unlikely that the implementation will be retrospective it would be advisable for any litigant with a good case to obtain ATE cover without delay.