Is After The Event Insurance Worth Paying For?

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As the name suggests, After The Event (ATE) insurance is purchased after an accident has happened and when a claim for personal injury compensation begins. Taking out an ATE insurance policy can guarantee that the claimant never has the personal responsibility of having to pay costs should their claim fail to succeed, as it would cover legal costs and expenses in any litigation or claim dispute.

In this article, we look at how ATE can be used in personal injury compensation, and how such cover may be deemed an appropriate safety net for certain claimants looking to make a claim.

ATE in personal injury claims

In the past, a claimant could recover ALL costs from a defendant should they succeed with their claim. However, with the LASPO Act 2012 the Government changed the legislation regarding this and removed the right to recover the cost for ATE insurance. As such, Solicitors now need to carefully consider whether providing ATE cover is a pointless cost burden – the claimant doesn’t pay anything if they don’t succeed, but will have to cover the cost of the policy if they win.

A Solicitor may now decide that there is no benefit to a claimant by providing such cover as they may instead simply opt to close a claim should a defendant mount a robust defence at the first opportunity, thus ending the prospect of a claimant facing various solicitor or defendant costs if their claim fails at a later stage.

In cases where it is felt that the merits of having such cover outweigh the need to remove the cost burden (usually in cases of a higher value or complex nature), having suitable ATE insurance cover in place can guarantee that the claimant pays no cost whatsoever to any party if their claim fails. As the cost of any ATE premium is only paid if a claimant were to succeed with their claim, providing such cover for a claimant is an issue a solicitor will consider carefully when evaluating the case at the outset.

When should ATE insurance be purchased?

In the majority of cases, our solicitors are likely to advise that you have no requirement to purchase ATE cover, especially if you already have existing Before the Event (BTE) or Legal Expenses Insurance (LEI) cover in place.

Such cover can often be found attached to home and contents insurance, motor insurance, trade union membership and financial products such as credit cards and loans. Where possible, you can use any cover that you already have in place. In cases where there is no existing BTE or LEI, our solicitors will recommend a suitable ATE insurance policy for your claim.

If the initial evaluation of your case indicates that it would be prudent and beneficial to your claim to have suitable ATE cover in place, our solicitors will source the correct policy for you. The claimant will not have to pay any costs for the policy should their claim fail, but the premium will be deducted from settlement (as well as the up to 25% deduction) should you succeed.

It may also be possible to obtain ATE cover at a later stage in the claims process and our solicitors will review this with you at the appropriate time.

Who pays the cost of ATE insurance?

If a solicitor is of the view that such cover is beneficial, it is the solicitor who will purchase an ATE insurance policy on behalf of the claimant if they do not already have a suitable alternative BTE or LEI cover in place.

You only pay them back for ATE insurance if and when you win your claim. As a result of the LASPO Act 2012, successful claimants who win their claim for personal injury compensation can no longer charge the cost of their ATE premium to the losing side. Instead, it is deducted from any settlement awarded when a claim succeeds.

Remember, you should never have to pay any upfront cost for ATE insurance cover if your solicitor recommends you require it. With Direct2Compensation, any deductions from your settlement are minimised and as such, the most cost effective policy for your personal injury claim will be purchased.

In cases where ATE premiums are higher, the potential compensation settlement awarded is likely to be far higher as well. Therefore, the ATE premium will only form a small percentage of your entire settlement and your Solicitor will ensure that you are given the appropriate cover that will represent good value for money and of benefit to your claim.

How much does ATE cover cost?

As the vast majority of ATE insurance cover will be obtained at the outset of the claims process, standard policies with various cover are available for different types of personal injury claims. Whilst each case needs to be decided on merit, our specialist solicitors can usually identify what level of cover you are likely to require when they first discuss your claim with you.

The level of cover required will vary depending on the kind of claim you are wishing to pursue. In less risky claims, such as straightforward matters where you are unlikely to lose, your solicitor is unlikely to recommend ATE insurance at all. However, if they do, premiums for such cover can start at around £100. In more risky claims, such as clinical negligence, cover can become more expensive as the likelihood of the claim failing increases. Whilst the majority of ATE premiums will range from £200 – £400, policies in some cases can be far higher where greater cover is needed and can run into thousands of pounds. However, this will only be the case in high value claims where any such cost would be a tiny deduction from settlement.

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Comments & Questions

Read on for questions and advice about claiming...

Good Afternoon

I have got a claim against a former employer and was looking to take out an ATE policy.
I already have legal cover on my home insurance but it is a BTE policy. I would need advice on how to proceed,

Thanks
Ambrose okodaso.

Ian Morris

Do you have a Solicitor acting in your claim against the former employer? If not, contact us so that we can assist you in pursuing your claim. Our Solicitors do not routinely recommend that you purchase ATE insurance in any event. If you have BTE (Before the Event) cover available, you should never need to purchase an ATE policy anyway.

However, if you do have a Solicitor acting for you in your claim, you should advise them that you already have BTE insurance available. The Solicitor should be able to approach the BTE provider and seek their assistance in providing cover and funding assistance in your case.

If your BTE policy (also known as Legal Expenses Insurance or ‘LEI) is attached to a car insurance or home insurance policy, using the legal cover does not mean that you are making a claim on your policy.

Reply

I was recently involved in a RTA which i am potentially liable for. I reported the incident to the police & my insurance company. The other driver phoned the police at the time of the incident, but they did not attend the scene. I remained at the scene for approximately 1 hour & during that time, no police arrived and no ambulance attended (or was called to my knowledge). I have fully comprehensive motor insurance, but do not have Motor Legal Cover, in the event the other driver or one of his passengers ties to pursue a claim against me, for example suffering from whiplash, do i need to take out an ATE policy & will it protect me. Thank you.

Ian Morris

No, as you are insured already you do not need any additional cover. Your vehicle insurers will deal with any claim made against you as a result of the incident – including vehicle damage/replacement and personal injury.

Reply

Why should I pay for an insurance policy which covers me in case I lose my claim, but only after I win my claim and therefore do not actually need the cover the policy provides?
I understand needing it at the outset, in case the claim fails it would provide cover for fees etc, but if I lose I don’t buy it!!? I think paying for a policy I actually do t need, and can’t possibly use, is even more of a cash grab than ppi policies and look how that turned out! If the policy was bought in the beginning but I only have to pay the cost at the end, that I understand, but I am actually BUYONG the cover after the fact, a policy that I cannot ever make use of, basically dropping money down a huge hole…can you please explain the reasoning behind this, just so I understand completely, as it seems rather unscrupulous as it’s written, and I don’t know if it’s because I’ve not fully understood the correspondence. Thank you.

Ian Morris

Your question and scepticism of the need for ATE insurance is absolutely justified and pertinent. Before April 2013 (when the Government really started attacking the rights of personal injury claimants in favour of the insurance sector), claimants could recover ALL of their legal costs and the total sum of any insurance policy that they needed for their claim. Sadly, this is now not the case and claimants now contribute from their awarded settlement towards their legal costs (with us, it is capped at no more than 25% of any total) and they must also pay the premium of any ATE insurance policy if they win.

You’re right in asserting that this is essentially a wasted cost burden in the vast majority of cases. With this in mind, our Solicitors no longer routinely recommend that claimants take such cover. Whilst in certain cases (where the merit of risking the additional cost of an ATE premium if succeeding with the claim is considered to be in the claimants best interests), a Solicitor may recommend the purchase of an ATE policy, in the vast majority of cases it is an unnecessary cost burden – something we passionately try to reduce in the case of all clients.

It is important to note that ATE insurance doesn’t cover the costs of the claimants Solicitor if they lose the case, but covers the cost of the defendant and courts if it is proving impossible to get the defendant to make reasonable offers to settle a claim (that a Solicitor believes they will succeed with).

Reply

Is ATE cover worth taking out in a litigation case?

Ian Morris

Do you have a Solicitor acting for you in your litigation? If so, you should seek their advice regarding any ATE requirements and if they are recommending that you do take such cover, check with them as to whether they receive an incentive (commission) from the ATE provider for selling you the policy.

Reply

ATE insurance can protect a claimant from exposure to cost if they don’t succeed at trial, but without qualified legal representation, an ATE provider may require a considerable premium to insure the matter.

You mention that no one will touch the case – we assume that you mean on a No Win No Fee basis? If so, you may wish to consider whether that indicates that the prospects of succeeding are so slim that the risk of cost exposure may be a very real risk.

Reply

If i get ATE Insurance and the claim is not successful and a claim is made under the ATE policy will I have to declare it that a claim has been made under that policy e.g. if i then take out another policy and i’m asked what claims have been made in the last 5 years.

Eliza

I have been injured and I will make a claim for compensation. I was informed that I need After the Events insurance. My question is could I buy this insurance from another company? If so, can you suggest someone/a solicitor or can I only use my solicitor to buy this product? How much cost is this insurance?

Ian Morris

After the event insurance is not something that is always needed in personal injury compensation claims and our Solicitors rarely recommend that you take such cover. As a claimant, you may have existing ‘before the event’ insurance so you should check carefully with your car insurers, home insurers, financial arrangements and union membership if applicable as you could already have ‘legal expenses’ insurance cover that you could use and you would not have to pay anything to use that.

Ian Morris

No, you would not have to declare this as it is a specific policy used for a specific reason and not a general claim against a standard insurance cover.

Reply

Hi,

I’m currently in a 2 and a half year claim, I was passenger in a car accident and currently accepted the final offer given, my document stated I had an ATE on there to pay once settlement has been agreed, I’ve heard nothing for well over a month from my case handler or the supervisor. I had this issue a while back. they wanted to take the matter to court, I had some questions of course especially regarding the ATE as they claimed liability on the other side, one lady who answered tried to help me and when looking at my file they said that it wasn’t on there ? What does this mean, I’ve been trying to find answers for a while now and feel this is a way of some sort of information.

Ian Morris

The only people who can confirm whether or not you have taken an ATE policy out with your claim will be your Solicitors. Have you requested an answer on this from them in writing? If not, it would be prudent to do so.

Although successful claimants will have to cover the cost of the ATE premium from their settlement, a Solicitor cannot provide or ‘sell’ a policy without having informed you of the cost (should you win) at the outset. Therefore, if your Solicitor failed to make it clear to you that they would be providing ATE and what the cost would be should you win, you may wish to contest the fairness of their sale of the policy to you and question whether or not you should be forced to pay for it.

Reply

I did not sign or agree to having an ATE policy. Can a solicitor put ATE in place without my knowledge or without signing any document?

Ian Morris

You cannot be forced to cover the cost of an item you have not agreed to purchase and had the costs explained to you.

Reply

Hello

I am a litigant in person looking to bring a clinical negligence case against the NHS. I am considering taking out insurance and should be grateful for your assistance.

Clare Metcalf

Ian Morris

We have Solicitors who can pursue a claim for clinical negligence on a No Win No Fee basis and can certainly have your claim considered and pursued by specialists should you wish to do so. However, unfortunately we do not sell ATE insurance – this is something you will have to source via a broker or insurance agent.

Reply

Good afternoon,

I have a builder that has collected money (£24,500) for a building extension and he has since abandoned the project. I’m looking at seeking legal redress. Is it something you covered please?

Thanks
Abbay

Ian Morris

Although this isn’t something we handle directly as we purely specialise in Personal Injury compensation, we can assist via one of our specialist panel Solicitor partners and their civil litigation department.

Reply

Hi Ian
I am looking to move my case to another Solicitor as the one I am presently dealing with have been totally incompetent and I have lost all confidence in them, which is annoying as they have been assigned by my union so all costs would be covered and I should receive 100% compensation. The new Solicitor wants to charge me £499.00 for ATE (aswell as the 25%).

The company I work for has already admitted 100% liability and agree that I was not to blame for my work place injury. I asked the new Solicitor why would I need to pay the ATE fee if 100% liability had been admitted, therefore they are guaranteed to win the case. They said it needs to be paid because if the case ends up going to court because we can’t agree on damages and we ended up losing then I would have to pay the othersides court and the ATE will cover this. Is this correct please and in your opinion do I need the to pay for ATE? Many thanks for all your help.

Ian Morris

The ATE issue is problematic and more often than not, our Solicitors are no longer recommending such cover. Essentially, ATE cover is only valid when both sides cannot agree on appropriate settlement value and the matter is taken to court for a judgement on settlement. In such circumstances, if the Judge rules in favour of the defendants valuation and you had refused such a difference, you can be forced to pay the fees for the other sides court attendance and court fees (you wouldn’t have to pay their total costs). As such, ATE can be relevant in such cases. This is only usually worthwhile in claims of high value given the fact that the claimant can’t recover costs for the ATE insurance should they succeed.

In your case, you need to consider whether the ATE premium is likely to be a large chunk of any settlement or if the overall value of the claim renders the fee of £499 irrelevant.

Whilst you can seek to switch to a new Solicitor, it is not always the easiest of processes and it is not financially viable in many cases for a new firm to undertake a claim halfway through (due to having to hand costs to the previous Solicitor on success). As such, if you can remain with the current Solicitor it would probably be the best bet.

Reply

Hi

I’ve won a claim and in process off accepting it but can not get my head around the deduction amount 25% for solicitor which I can understand but then I got to pay a future 20% ATE which puts the total reduction at 45% off my claim is this allowed and why do I have to such a ridiculous amount of ATE?

Ian Morris

Were you made aware of the potential charges that you refer to at the start of your claim – BEFORE you signed the Solicitors no win no fee paperwork? The potential deduction percentage that you mention may not be illegal, but there is just no need for a Solicitor to deduct more than 25% from the claimants settlement. We have always been of this view and work to the rule that a claimant will pay nothing if their claim fails and only a maximum contribution towards cost of up to 25% of their awarded settlement*.

*If there is a need for ATE cover, a successful claimant must also pay the policy premium on settlement of their claim. That money does not go to the Solicitor, but to the insurers

Reply

I have been talking to a Claims Management Company regarding an old mortgage. They’ve advised there is potential for a claim upwards of £18k on a ‘no win no fee’ basis and solicitor has agreed to take it on, but I would need to agree to an ATE policy at a cost of over £2,350, this plus their ‘cut’ of 30% + VAT! This seems a ludicrous amount to me and I wonder if I am within my rights to purchase ATE cover elsewhere and if it would be cheaper? Does this all sound a bit ‘dodgy’ to you?! Am I going to end up out of pocket?

Zoe

Hi, my son died due to not enough staff so he didn’t go down to his operation. I’ve spoken to a medical solicitor and she’s ask me if I had ate insurance, I do not at this time. If I did have ate I will get all the money if I win, but if I don’t have it and do it though the solicitors only I will have to pay out to them 95% of what I get. Should I take one out?

Graham

I have been advised that I take a Plevin claim on a no win no fee basis.
I emailed the solicitor involved and they advised me to take out ATE insurance.But they have said if the claim is successful they would pay and if unsuccessful it wouldn’t cost me any?Please could you help I’m really confused

Ian Morris

We do not deal with financial miss-selling claims. However, if the Solicitor is recommending ATE cover, it is probably wise to take their advice. You won’t pay any cost for the policy if you fail to succeed with your claim, but if you are successful, you will be liable for the policy cost – which would be deducted from any settlement you may receive.

Ian Morris

You must remember that if you succeed with your medical negligence claim, you cannot recover the cost of the ATE premium, so that would be deducted from any settlement awarded. However, if your Solicitor is advising that you do take such cover, then it is probably wise to follow their advice given their expertise and detailed knowledge of your claim.

Ian Morris

Before you agree to take any ATE cover, you should ask to speak directly with the qualified Solicitor who would handle your legal matter to seek their advice about the need for any ATE cover. The majority of our Solicitors no longer recommend ATE cover for personal injury matters – which is our area of speciality. Whether you do need such cover for your legal matter is not something we can say. Whilst you can of course seek to obtain such cover privately, before you make any purchase, you should check carefully with the Solicitor that the cover you find meets the needs of your case.

Reply

Hi I’ve just had a successful claim against my workplace for an injury I got back in May. I’ve was just reading the costs and my ATE insurance was £588. After reading your website I feel like I’ve been overcharged massively for this. I received £2100 but after fees and ATE insurance I actually received £1054. Am I able to take action on this or is it a case of I should have read up on it before agreeing to it? Thanks.

Ian Morris

Of course, there is always a need to ensure that you carefully read any agreement you are being asked to sign. However, a Solicitor has a duty to ensure that you have been advised as to what you are expected to sign up for – especially when their is a financial implication. If your Solicitor did not make you aware of the potential cost of the policy if you succeeded with your claim when they signed you up, there is a case to make against them to waive the fee. I would suggest that a written complaint regarding this issue is valid and may well resolve this issue for you.

Reply

Hi – my son (25 years old) was involved in a car accident 10 months ago. The driver of the other car disputes that it is his fault. My son`s car has been repaired, came to roughly £8,000

The issue however is that my son has just looked at his insurance cover as it due for renewal on 11/09/2020 and identified that he does not have legal cover. Insurer is Direct Line and legal cover is an optional cover. The insurance is comprehensive.

I`ve just been looking up After the Event insurance and came across your website.

Ian Morris

We do not sell ‘After the Event’ insurance directly and it is unlikely that your Son would need such cover. Are his insurers fighting the stance taken by the 3rd party?

If your Son was injured in the accident, is he making any personal injury claim? If not, we can assist with such action.

Reply

I’ve currently got a personal injury claim progressing and the company who this is against has already admitted they were at fault. As I have this will ATE still be needed?

Ian Morris

ATE cover may still be needed even if liability is admitted, but it should not be taken unless it is deemed to be appropriate by your specialist Solicitor. Before you do take any such cover, you should ask your Solicitor for their view and recommendation and you should make sure that they do noty stand to receive any commission should they sell you a policy.

ATE premium costs CANNOT be recovered if you succeed with a claim, so if liability is admitted and your claim is straightforward, in reality purchasing such a policy is just an unrecoverable loss that you could avoid.

Reply

Is 199.00 the norm for ate policy? No win, no fee, straight forward rta. I can’t see why I need to have this. Any thoughts?

Ian Morris

The fee you quote is within the ‘acceptable’ price range. However, you are right to consider whether you really need ATE insurance. More and more, our Solicitors are advising claimants AGAINST taking ATE cover as the cost is not recoverable and the reality is that it is not a cost burden that has any real worth in the majority of cases.

Jenny

Thank you for your reply Ian.
It’s already been admitted liability from the other driver, and I wouldn’t think Carpenters would have taken this on as a no win no fee if there was a chance we won’t win. Just seems money grabbing to me?

Ian Morris

Hopefully your Solicitors will be able to clear this up for you, but it does appear that your claim is one where ATE cover would not be beneficial or needed.

Reply

Where can I get after the event insurance?

Ian Morris

Such insurance can be purchased from specialist insurance brokers or via some law firms. However, before you purchase such insurance, you need to question whether or not you actually need such cover.

Reply

Hi
I am about to start court proceedings against my neighbour over right of way access. My deeds say I have right of way and it is marked on the title plan. My solicitor says we have an 80-90% chance of success. We don’t have legal insurance, we can cover the cost of the first hearing but if it goes to full trial we will not be able to cover the cost.
My question is; if it goes to full trial can I take out ATE insurance against costs of the full trial or if I need it at the beginning can I change the cover amount after the first hearing?

Ian Morris

Whether or not ATE cover is available for the legal action you are taking is something you should discuss with your Solicitor. As with any insurance, it is usually possible to amend a policy, but you would have to take in to account potential costs as and when the risks of increased liability become apparent.

Reply

Thank you for your advice, where would I buy such a product as I have been quoted in excess of £400 from the company that my insurance company have sourced?

Ian Morris

Do you have a Solicitor acting for you? They should be able to provide that product to you. Alternatively, you could approach a broker to ask them to obtain you some quotes.

Reply
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