Litigation ‘After-the-Event’ Insurance:

Mitigating Risk - Maximising Reward

The ‘after-the-event’ insurance market grew exponentially with the advent of the Woolf Reforms in 1999 and the opportunities that arose to provide cost effective access to justice. The sophistication of the market has since developed, and insurers will consider a wide range of commercial propositions to assist claimants, solicitors firms and other professionals whether through standard After the Event insurance cover or more bespoke arrangements to help manage business risk within the litigation space.

With over 15 legal expenses insurers, the UK is at the global heart of the industry. There are many potential providers and options to consider. The challenge, however, remains in navigating the individual process and risk appetite for each. Obtaining insurance remains a complex and time-consuming process. To increase the chances of success and to shorten the period of deliberation, it is crucial to be well prepared and this is one of the core areas of expertise that FRM delivers to its clients.

As well as maintaining an extensive network of relationships with all of the key players in the insurance market, FRM’s management team have first-hand experience of every aspect of the insurance process. We have over 25 years of experience in originating, structuring and executing insurance transactions for claimants and lawyers and therefore we provide the benefit of a unique and unparalleled level of experience and expertise.

Before approaching the market, we take the time to understand your requirements and assist you in preparing a proposal that is the most likely to succeed. We understand what insurers are looking for and what are the likely primary areas of focus. Using us, allows you to leverage our expertise and experience to ensure that the process is carried out with optimum efficiency and competitive terms are secured.

What is litigation ‘ After-the-Event’ insurance?

In the UK and other jurisdictions recourse to the law for civil and commercial claims is expensive and uncertain. A claimant is often exposed to not only their own legal costs but also to opponent’s costs should the claim lose or discontinue. After-the-Event insurance covers legal costs up to a sum insured, or limit, and insurers will pay a valid claim if the outcome of the claimant’s litigation is unsuccessful.

Why use litigation ‘After-the-Event’ insurance?

Security and reassurance
enabling litigation to be pursued without the fear of having to pay your opponent’s legal costs should you lose.

Tactical advantage
an experienced and independent underwriter at a reputable insurer will have reviewed the merits of your claim before agreeing to provide cover. This coveys a strong message to your opponents of the strength of your claim.

Access to justice
Defendants are not able to use their financial resources and fear of adverse costs to dissuade you from pursuing a claim if you find yourself in a ‘David vs Goliath’ scenario.

of your business or personal assets by covering some or all your cost exposure.

a suitable ATE policy can provide the means to satisfy a Security for Cost order thus enabling your claim to proceed all the way to trial if necessary.

What kind of legal costs can After the Event insurance cover?

Insureds are protected in the event their claim is lost with coverage provided for:

  • Opponent’s costs
  • Disbursements
  • Counsel fees
  • Own side’s solicitor fees (upon request and usually up to a max. 90% cover)
  • Indemnity varies from £10,000 to £5M+

How much do insurers’ charge?

FRM has access to market leading insurers and we are able to source preferential terms meaning ATE insurance is an affordable option.

Premiums vary from insurer to insurer and are based upon the type of litigation, how much cover is needed and what the cover is required to insure. FRM will provide full details on any quotation we are able to secure for you.

We work with insurers who are able to offer deferred and contingent premiums meaning that a premium is only payable upon successful conclusion. Also, premiums may be substantially discounted so that if you settle your claim successfully at an early stage you will pay less than if the matter proceeds to a trial.

In some instances, insurers will require, all or a proportion of the premium to be paid at the outset or at set litigation stages. FRM will seek the most competitive terms to make sure that you receive value for money and cover is affordable.

Specific insurance products and service that we can access:

We can arrange policies providing:

  • £25,000 to £10M+ cover for adverse costs.
  • Preferential premium terms including deferred and contingent are available which means you do not pay any premium until, and if, your claim is successful. Clients whose claim is unsuccessful, do not pay.

Core products include:

  • After the Event legal expenses insurance (ATE) – (see above)
  • Deeds of Indemnity – Insurers provide Deeds of Indemnity or non- avoidance clauses to satisfy a Security for Costs award in the courts. FRM can assist in obtaining these deeds to ensure your insurance policy stands up to scrutiny.
  • Cross Undertakings in Damages Insurance – Insureds are covered in the event that a freezing order or arrest of a vessel is deemed ‘illegal’ and the opponent is awarded compensation for loss of use of their assets. Up to a limit of indemnity, FRM can provide cover for both legal costs and damages.
  • Defendant ATE Insurance – Although ATE is generally geared towards protecting the claimants’ position FRM can also assist helping clients who find themselves on the receiving end of an unmeritorious claim. Policies can be extended to include damages as well as legal costs. Cover can be provided up to £5M+ and premiums are paid at inception.
  • Portfolio or Work in Progress (WIP) Insurance – is a unique hybrid of ATE insurance which insures solicitors’ Work In Progress on an aggregated basis across a portfolio of claimant litigation where the solicitor is at risk for their fees under Conditional Fee Agreements, Damages Based Agreements, or similar. We work on both the firm and Claimants’ behalf providing credible options of protection. Sums insured of £5M+ can be arranged with premiums typically contingent upon the realisation of the portfolio’s performance.


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