You can convert more meritorious briefs into legal claims
The financial costs of litigation is cited as a major reason why plaintiff’s (both corporate and individual) walk away from meritorious legal actions. The risk of an opponent cost exposure coupled with funding own side legal fees is estimated to impact the decision of a potential plaintiff to proceed with an action in an average of 35% of briefs.
Consider what 35% of your revenue amounts to. Then ask yourself if you can afford to ignore the potential of 35% growth of your firm. This could be as simple as having an educational conversation with your client about how ATE insurance can help to mitigate their financial risk on a non-recourse basis i.e. their potential adverse cost risk is zero. It is also possible for a law firm to enter into a portfolio funding arrangement with a third party litigation funder (TPF).
Having an understanding of ATE Insurance provides a competitive advantage for law firms and can be used as a business generation tool for new or existing clients.
The Vie Legal Insurance team can help you to educate your client with supporting documentation and assist with applications so they are in the best position for an approval, in the quickest possible time or help your firm to obtain a portfolio arrangement with a funder.
You could know less than your client
Adverse costs or ‘ATE’ insurance has only been available in Australia in recent years, is still not widely known or understood and is very much under-utilised. However, this is changing and clients are becoming more aware. No solicitor wants to know less than their client. It is not uncommon for us to receive calls from plaintiffs worried about their legal claim and the financial risk associated with it. Many of these are concerned that they were not informed of the massive risk reduction available to them from their legal team.
Although an application can be made at any point in the litigation, it is important to note that it is more difficult to secure ATE in the latter stages of a claim. This is a common misconception about the product, which can put clients at avoidably greater risk as well as potentially leaving them with less favourable terms.
Reduces law firm financial risk
ATE Insurance is also an important consideration for law firms who are preparing to offer representation on a contingency fee basis (currently limited to class actions in Victoria) where the exposure to the opponent’s costs is transferred to the law firm who is instructed on a contingency fee arrangement. An ATE policy could be utilised to eliminate that financial risk.
Protects your balance sheet
Cash flow can be improved for law firms with the use of law firm portfolio funding. We can access funding for lawyer’s fees and disbursement fees (this includes counsel’s fees, expert reports, administrative costs).
In addition to this, an ATE policy removes the contingent opponents cost exposure held on the balance sheet, transferring the associated costs to someone else’s balance sheet.
Vie Legal Insurance Can Help
The Vie Legal Insurance team have been involved in the Legal Insurance industry for over a decade. Our network of major insurers and funders means you have access to A rated insurers and established funders in Australia and overseas. Our specialist knowledge and these solid relationships are available to you and your clients at no upfront cost.
We understand that Litigation Funders, Law Firms and Individuals alike, need things done quickly, accurately and for a competitive price. You can feel confident you don’t need to ‘shop around’ doing all the extra leg work, we will take care of everything for you.
Book in for an introductory session with our expert team who can discuss the specifics of your situation or why not talk to us about a lunchtime CPD session for your team.