Key Takeaways
- After the event (ATE) insurance protects you against the risk of paying the other side’s legal costs if you lose your commercial dispute.
- You should consider after the event insurance as soon as you decide to pursue or defend commercial litigation, ideally before significant costs are incurred.
- If you do nothing and lose your case, you could be left personally responsible for the other party’s legal costs, which could be financially devastating.
- ATE insurance does not usually cover your own legal fees unless specifically agreed, so review the policy terms carefully before committing.
- In most cases, after the event insurance premiums cannot be recovered from your opponent except in very limited circumstances, following legal reforms in England and Wales.
- Taking out ATE insurance early can strengthen your negotiating position as it demonstrates that your claim has been independently assessed and may satisfy security for costs requirements.
- If your case is already underway, you can still apply for after the event insurance, but the risk assessment may become stricter as the case progresses.
- Our solicitors can provide tailored advice on whether ATE insurance is suitable for your commercial dispute and guide you on the strategic timing of your application.
Book a free consultation to discuss ATE insurance for your commercial dispute with our team.
What Is After The Event Insurance and When Should I Take It Out for a Commercial Dispute?
After the event (ATE) insurance is a specialist policy you arrange after a legal dispute has arisen to protect against the risk of paying your opponent’s legal costs if you lose. In commercial litigation, taking out ATE cover early—in most cases, before substantial legal fees or court processes begin—can be decisive in minimising your financial exposure.
Timing matters: apply for ATE insurance as soon as litigation appears likely. Delays may mean higher premiums or refusal of cover. Our solicitors at Go Legal can advise on the right approach to using ATE insurance to strengthen your position and manage risk.
What Is After The Event Insurance in a Commercial Dispute?
ATE insurance is a legal expenses policy that businesses and individuals obtain after a dispute arises. Its main purpose is to protect you if the court orders you to pay your opponent’s legal costs after an unsuccessful claim or defence.
This insurance is most common for commercial claimants, but defendants can also benefit where appropriate. The defining factor: ATE insurance is arranged in reaction to a “trigger” event—such as a breach of contract or failed transaction—rather than being in place before disputes arise.
James, a director of a logistics firm in Leeds, faces a breach of contract claim worth over £250,000. He arranges ATE cover after the dispute begins so he does not risk covering the supplier’s legal costs from the company’s own funds if the court rules against him.
How Does After The Event Insurance Work for Businesses?
When a business takes out ATE insurance, the policy responds if a court or settlement obliges the business to pay the other side’s legal costs. Some policies may also cover disbursements such as expert or barrister fees, but this varies.
ATE insurance does not activate on every event. It typically only responds when the insured party loses or settles on adverse terms. Policy specifics will clarify what is covered and what is excluded.
Early consideration is crucial. While you can technically arrange cover after litigation starts, insurers are more hesitant and premiums typically increase if major legal outlays have already occurred.
What Costs Does ATE Insurance Cover and Not Cover?
ATE insurance normally covers your opponent’s legal costs if you lose and sometimes your own disbursements, such as expert witness fees or barrister fees. Few policies extend to your own solicitor’s legal fees.
Most policies exclude fines, penalties, and any costs not pre-approved by the insurer.
ATE insurance is designed to shield you from the costs of your opponent—not your own solicitors’ fees. Always review the policy wording with your lawyer to confirm what is included.
Who Is Eligible for ATE Insurance in Commercial Litigation?
Eligibility depends on case strength and type. Insurers usually require that a claim or defence has good prospects of success, supported by documentation or legal advice.
ATE insurance is most often available for English court litigation, domestic arbitration, and certain tribunal matters, but typically not for criminal, matrimonial, or most overseas disputes.
Sarah’s SME in Manchester wanted to sue a supplier for £120,000. The insurer only agreed to offer ATE cover after reviewing detailed legal advice and being satisfied there was a solid case.
Our commercial disputes solicitors can assess your case for eligibility and help you make the strongest possible application.
To learn more about professional negligence concerns, read our article on What to do if your solicitor has been negligent.
When Should I Take Out After The Event Insurance for a Business Dispute?
Take out ATE insurance as soon as litigation is likely or immediately after a dispute arises. Leaving it until later in proceedings—or after key procedural stages—usually leads to higher premiums and stricter terms, or outright refusal from insurers.
Why the Timing of ATE Insurance Matters in Commercial Disputes
Insurers favour applications made before major costs are spent or disclosure carried out. The earlier you apply, the better your chance of securing competitive premium terms and comprehensive cover.
Applying for ATE insurance before significant legal expenditure gives you the best chance of approval and cost-effective protection.
Timing also impacts commercial leverage. Early ATE insurance strengthens your position in negotiations and can make formal litigation funding or board-level approval easier to secure.
Does Taking Out ATE Insurance Early Help My Case?
Arranging ATE insurance before proceedings start or before major steps (pleadings, disclosure) gives you greater flexibility and leverage. It signals to the opponent that your claim is robust—independently assessed—and that you are well protected against adverse costs risks.
Mark’s fintech company arranged ATE insurance before issuing a claim. This improved settlement discussions and reassured his board that legal costs were capped in the worst-case scenario.
If you are considering a claim, our solicitors can help you review the right time to approach the insurance market.
You may also find our guide on Solicitor negligence: UK real malpractice examples & legal rights useful if you are facing issues with your current legal representation.
Step-by-Step: How to Arrange After The Event Insurance in a Commercial Claim
Arranging ATE insurance involves clear stages, from the initial merits review to policy placement.
What Documents Will an Insurer Need?
To assess and underwrite an ATE policy, insurers typically require:
- A merits-focused summary or opinion from your solicitors
- Pleadings or draft pleadings (such as Particulars of Claim or Defence)
- Underlying contract or transaction documents
- An estimate of the legal costs you are seeking to insure
- Evidence of damages sought (quantum)
- Supporting documentation confirming the strengths and weaknesses of the case
Providing this information promptly increases your chances of success.
What Are the Main Stages in the ATE Application Process?
- Initial Review: Our solicitors evaluate the claim’s prospects and risk profile.
- Formal Proposal: A comprehensive dossier including supporting documentation is submitted to chosen insurers.
- Underwriting: The insurer assesses the claim, may ask follow-up questions, and conducts its own risk analysis.
- Offer of Terms: If accepted, the insurer issues policy terms, stating what is covered and the proposed premium.
- Negotiation: Policy terms and coverage limits can often be negotiated before agreement.
- Policy Execution: Once terms are accepted and any conditions met, the policy is activated.
Our team can guide you through every step to ensure the process is efficient and aligned with your litigation strategy.
How Does ATE Insurance Affect Risk, Negotiation and Security for Costs?
ATE insurance fundamentally alters your risk profile. It may improve your ability to negotiate a strong settlement and could, in some cases, satisfy security for costs requirements.
Leveraging ATE Insurance to Strengthen Settlement Negotiations
An ATE-backed case demonstrates that a third-party insurer has independently appraised and supports your claim or defence. This makes it harder for opponents to use costs threats as leverage to force a weak settlement and signals that you are well protected.
Showing the other side that you have robust ATE cover in place can make settlement more likely, as it signals that you are not easily deterred by adverse costs risks.
Can an ATE Policy Satisfy Security for Costs Orders?
Opponents sometimes seek a security for costs order to ensure their costs are covered if they win. A credible ATE policy may, in suitable cases, be accepted by the court as either full or partial security, especially if the insurer is reputable and the terms comprehensive.
A tech company in an IP dispute offered their ATE insurance as an alternative to depositing £200,000 cash as security. The court carefully reviewed the insurer’s rating and the policy’s exclusions before deciding whether to accept it as adequate.
Individual circumstances will determine whether a court accepts an ATE policy as security. Early legal advice is essential when considering this route.
Can I Still Take Out After The Event Insurance Once Litigation Has Started?
While it is possible to buy ATE insurance after litigation has commenced, it becomes more challenging and expensive. The further along the claim, the less likely an insurer will want to take the risk or offer competitive premiums.
Is It Too Late to Buy ATE After Proceedings Begin?
After major procedural milestones like disclosure or substantial legal costs have been incurred, insurers will rarely accept new ATE applications. If they do, expect stricter underwriting and higher premiums.
Leaving your ATE application until the late stages of litigation may result in limited or unaffordable cover, so get advice early when considering insurance options for your dispute.
Engage with our solicitors early in the dispute process to maximise your options.
What Laws and Deadlines Apply to After The Event Insurance in Commercial Cases?
Following the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), ATE premiums in England and Wales are almost always borne by the policyholder and not the opponent. Civil Procedure Rules (historic versions) placed emphasis on the timing and disclosure of funding arrangements. Today, the main “deadline” is practical: apply early, as insurers will not usually offer cover later in the litigation.
If you are worried you might have missed the right window, speak to us promptly for the latest advice.
What Are the Limits on Recovering After The Event Insurance Premiums From the Other Side?
It is now extremely rare for commercial parties to recover their ATE insurance premium from the losing side. Statutory exceptions exist but are nearly always restricted to certain clinical negligence cases and are not relevant in commercial disputes.
Budget on the basis that you will pay your ATE premium yourself. It is not usually recoverable from the losing opponent in commercial litigation.
To manage litigation costs and risks effectively, you may find our pages on commercial litigation, breach of contract and shareholder and director disputes helpful.
Our Winning Approach to After The Event Insurance in Commercial Disputes
Our solicitors integrate ATE insurance seamlessly into overall dispute strategy. We:
- Assess case eligibility and maximise prospects of approval
- Help select reputable insurers and negotiate best policy terms
- Provide guidance on documentation and the complete application process
- Advise on deployment of ATE insurance within wider settlement, funding and risk management strategies
- Keep your business and commercial priorities at the forefront throughout
To discuss how ATE insurance could strengthen your position, book a free consultation with our team today.
Frequently Asked Questions
Can ATE insurance cover both my opponent’s legal costs and my own?
ATE insurance primarily covers your opponent’s costs if you lose. It may also cover certain disbursements such as expert and barristers’ fees, but will not usually include your own solicitor’s full fees. Always review the policy documents.
When is the best time to apply for ATE insurance in a commercial dispute?
Apply as soon as it is likely you will need to pursue or defend litigation. Early applications are more likely to be accepted and attract lower premiums.
If I win my case, do I still pay the ATE premium?
Many ATE policies make the premium payable only if you lose, but terms vary. Some require reduced or staged payments. Check your policy carefully.
Is ATE insurance available for defending a claim as well as making one?
Yes, provided the defence has credible prospects of success and meets insurer acceptance criteria.
How is the ATE insurance premium structured and paid?
Premiums may be upfront, staged, or deferred to the end of proceedings (and sometimes payable only if you lose). Check the arrangement in your policy.
Will the court accept my ATE policy instead of cash for security for costs?
Courts sometimes accept a comprehensive ATE policy as security for costs, depending on policy terms and the strength of the insurer. Case-specific advice is needed.
Are there types of commercial cases where ATE insurance is not available?
ATE insurance is generally not offered for criminal, matrimonial, most overseas, or regulatory matters. Most commercial disputes eligible for English court or arbitration proceedings will be considered.
What happens if I settle my case before trial—do I still owe the ATE premium?
Most ATE policies require some payment of the premium upon settlement, though terms vary. Confirm the details before committing.
Will my opponent know if I have ATE insurance in place?
You may be required to disclose the existence of ATE insurance in certain procedural circumstances, especially if you rely on it for costs or security applications.
Can ATE insurance be combined with other litigation funding options?
Yes. ATE insurance can form part of a wider funding arrangement alongside third-party funding, damages-based agreements and more.
Speak to a Commercial Litigation Solicitor About After The Event Insurance Today
If you are considering ATE insurance for your commercial dispute, our experienced solicitors are ready to review your position, advise on timing, and secure the protection your business needs. Call us on 0207 459 4037 or book a free consultation.
