AFTER THE EVENT ACCIDENT INSURANCE

ATE INSURANCE FOR COMMERCIAL LITIGATION

What is the cover intended for?

The 1st Class Legal (IS) Ltd ATE Litigation Costs Policy is intended to provide cover for opponent’s costs and own disbursements in civil litigation cases across a wide spectrum of categories of case. We can provide after the event accident insurance and ATE insurance for commercial litigation.

What areas of litigation will it cover?

Each case is individually assessed on the merits but the following areas will all be considered in addition to personal injury :-

• contractual disputes
• landlord and tenant and property disputes
• copyright and intellectual property disputes
• construction and engineering disputes
• professional negligence
• partnership disputes
• commercial Agency disputes
• banking and financial disputes
• insolvency related cases
• clinical negligence – specialist and separate policy for this area

What are the general levels of premium involved?

The premium rates applicable vary with the category of case and run from 18% of the cover required though to 30%. Each case is individually assessed within the category of case involved and cases with stronger merits will attract lower premiums.

Is the premium itself insured?

This is an option that is provided on all cases.

How do I apply for a quotation for my client?

To apply for us to review a case and confirm what terms, if any, we will offer for ATE insurance the following is required :-

• completed ATE insurance proposal form – initially this may be signed only by the solicitor handling the case but will also require the client’s signature before cover is issued.
• copy of correspondence with the opponent
• copy of any expert reports
• copy of Counsel’s opinion if applicable – this will not always be required – please call for information
• copy of witness statements
• copy of particulars of claim and defence if applicable
• cheque made payable to 1st Class Legal Ltd for £100 plus VAT (£117.50) for the assessment fee
• letter from yourselves with case summary

Are we required to insure a minimum number of cases with 1st Class Legal (IS) Ltd each year?

The simple answer is no – we do look to firms to ask us to review all cases that the firm has that may require insurance. For the firm, building a good relationship with an ATE insurer should be important and we encourage this. We believe that once you have used 1st Class Legal for after the event accident insurance or commercial litigation insurance that our product will speak for itself.

What limits of indemnity can you provide?

Our basic minimum level of cover is £10,000 and normal maximum of £250,000. We will review cases that fall outside these limits. We see our target market for commercial cases as those that generally fall within a cover requirement of up to £100,000 for opponent’s costs and own disbursements.

You have mentioned “stepped premiums” for commercial ATE insurance – what does this mean?

This is a very important and perhaps unique area of the 1st Class Legal (IS) Ltd ATE cover – it is stated as follows:

This matter may be suitable for the use of a "stepped premium". The insurance cover could then be raised as required subject to our view that the merits of the case had not decreased. This would allow the opponents to be put on notice that an ATE premium had been incurred as an additional liability that they would be being asked to pay on successful conclusion of the case and that if the matter does not settle further additional liability costs will then be incurred. This approach gives the opponents the opportunity to settle the case before further additional liability costs are incurred and should a dispute arise over costs the information with regard to this can be placed before the Judge.

By way of example :-

• commercial contract dispute – value of the potential claim £120,000. Potential opponents costs and own disbursements if the case lost - £40,000
• initial cover provided - £10,000 – premium £2,640 (including insuring the premium itself) plus Insurance Premium Tax
• on acceptance of the case by us the claimant solicitors advised the opponents that further cover of £30,000 would be required and an additional premium of about £8,000 would be payable and would be claimed from them if the case was successful
• opponent’s solicitors immediately made an approach to try to settle the matter and after some negotiation the case was settled for £105,000 plus costs (including the ATE premium)
• for a total premium of £2,640 plus IPT the claimants protected themselves from the potential costs but also encouraged the opponents to come to the table and agree a very sensible resolution of the matter
• the claimant company also did away with the need to provide for a potential costs liability from the litigation in the company accounts

What happens if a Part 36 offer is received?

The issue of how offers are handled is reviewed before cover is accepted and is confirmed in writing on each case when cover is offered. Generally, we will continue cover to beat an offer or payment into court after the matter is reviewed between the claimant solicitors and ourselves but we reserve the right to discontinue cover if an offer is at a level wherein the risk of failing to beat it is excessive.

What happens if the case involves a counterclaim?

We will establish the boundaries of the ATE cover before acceptance of the risk and this again will be set out in writing before the cover begins.

What does the ATE insurance not cover?

The ATE insurance does not cover the ability of an opponent to pay any award of costs or damages.

What happens if we have more than one opponent?

Prior to the acceptance of cover, the issue of multiple defendants will be discussed and the circumstances reviewed and confirmed to you in writing.

Do you offer deferred premiums?

No, we require the premium to be paid prior to the instigation of cover but use of “stepped premiums” allows the initial premium requirement to be much lower.

Do you provide funding systems for the ATE premium and disbursements?

Yes – we have funding facilities both directly to the firm of solicitors and to the client. Please ask for details if required.

Can I get an indication if a case might be acceptable for ATE insurance over the telephone?

Yes, we are happy to receive calls giving a general outline of the matter and will indicate if, subject to the formal assessment procedure, the matter is likely to be acceptable and give an indication of what the premium may be. We are able to give you an early indication for both after the event accident insurance and for ATE insurance for commercial litigation.

I am also interested in ATE insurance for personal injury cases – do you provide this.

Yes we do – please call us to discuss your requirements.

Is it a requirement that we must handle the case under a CFA to apply for the ATE insurance?

No, but we will only provide cover for opponent’s costs and own disbursements. If the claimant firm does not work on a CFA basis this will be taken into consideration in the assessment process.

Do you get involved with the level of success fees the firm of solicitor charges under a CFA?

No, this is a matter for the client and the claimant solicitor.

What if the remedy being sought is non-financial?

We will still review the matter and confirm if it is acceptable for ATE insurance. The issues raised would be confirmed in writing before any cover was instigated.

Do you only provide ATE insurance for claimants/applicants?

No, we will look at providing cover for defendants/respondents – each case is assessed on the individual merits. As you will be aware, sometimes it is simply a matter of who issues first as to who is the claimant and who is the defendant.