Common ATE Questions, Answered (FAQs)

The litigation insurance landscape can be complex, in particular that of ATE insurance. Here is a series of Q&As to some of the most commonly asked questions about after-the-event (ATE) insurance.

What are the main types of After-the Event (ATE) insurance premiums/fees?

Paid or Upfront premium:

Payable on inception of the ATE policy or at key stages throughout the litigation. This type of premium once paid is normally non-refundable.

Supplemental Premium: 

A one stage premium which is only payable if a case or group of cases is successful

Contingent Premium:

A multi stage premium discounted at key stages in the litigation and only payable if the case is successful.

Deed/Anti-Avoidance Endorsement Fee:

A fee payable to the relevant insurer for issuing a Deed of Indemnity or Endorsement. The fee is generally only payable when the Deed or AEE has been accepted as security by the defendant or court.

What is an After-the Event (ATE) insurance Portfolio Policy for law firms?

A portfolio insurance policy for a law firm provides comprehensive coverage for a group of cases a law firm is handling on behalf of clients. The firm takes out a single insurance policy that covers a selection of cases. 

What is an Anti-Avoidance Endorsement (AEE) in the context of an After-the Event (ATE) insurance policy?

An Anti-Avoidance Endorsement (AEE) is an endorsement to an existing After-The-Event (ATE) insurance policy. The AAE protects the defendant(s) by indemnifying the legal costs incurred by them if there is a successful defence to the legal action and the defendant is awarded costs. Depending on the wording of the AAE, it typically gives the defendant(s) a direct legal route to enforce the indemnity.

AEEs are used in jurisdictions such as the UK and Australia to fulfill security for costs obligations. This serves as a potential alternative to the more conventional methods of providing security for costs. 

What is a Deed of Indemnity (“DOI”)in commercial litigation?

A plaintiff may secure a Deed of Indemnity (DOI) to fulfil their security for costs obligations, serving as a potential alternative to the more conventional methods of providing security for costs.