ATEInsurance can be a valuable tool to businesses seeking to engage in commercial litigation. This unique and niche insurance helps to minimize the financial risk to the company or individual as the costs of the litigation are covered (either entirely or in part) by an insurer if the case is unsuccessful at court.
Put simply, if the claimant loses their commercial litigation case in court, the ATE insurer pays their legal fees and disbursements (in accordance with their premium and the agreed level of cover). Some ATE insurance policies can be deferred and contingent upon success, i.e. no upfront cost and the premium only becomes payable if the case is successful.
Of course, ATE insurers can be picky when it comes to providing commercial litigation cover and usually only consider cases which they consider to have a minimum chance of success of at least 60%. TheJudge, the leading broker of ATE insurance in England & Wales, has created a video guide to ATE insurance which explains how a policy can be used to protect against adverse outcomes by covering part or all of your legal costs.
The animation also gives a brief introduction to third party litigation funding which can be helpful for claimants who may not have / do not wish to use their own financial resources to finance their legal fees and disbursements. Litigation funding ensures a reliable cash flow for the duration of the case and minimizes financial risk for the claimant as the funder takes on some of the risk in exchange for a ‘success fee’.
Both After the Event insurance and 3rd party funding are forms of litigation finance and can be taken out together or as a combined solution. Litigation finance should most certainly be considered by any business looking into commercial litigation and is becoming more widely available - especially in smaller commercial disputes where expected legal fees are likely to be in excess of £50,000.
Find out more at www.thejudge.co.uk