Nudorra Capital is promoting the use of ATE Insurance products through a strategic relationship we have with a licensed Insurance Broker. The overwhelming advantages of costs, security, and protection, for both lawyer and plaintiff, speak for themselves.
The most important attribute is that insurance companies are licensed and regulated, their capital is protected, and they have decades of global experience. The insurance product gives you Delegated Authority and courts are finding After-The-Event (“ATE”) insurance is a strong weapon against Security for Costs.
Nudorra Capital has promoted the use of After-the-Event (“ATE”) insurance since 2015. We see several benefits to plaintiffs and their lawyers:
- Cases tend to settle faster when ATE insurance is a factor: an insurer is more likely to settle when they know your client is protected.
- You can proceed with more cases, knowing that disbursements are secured.
- Insurance protects your law firm against costs that may arise from the loss of a case, and can cover your disbursements and your opponent’s costs and disbursements.
- ATE insurance provides peace of mind for plaintiffs. If their case loses, they don’t face financial loss. In addition, insurers can’t intimidate them.
More options available now with After the Event Insurance
After the Event (“ATE”) legal expense insurance covers litigation costs to protect clients against the legal cost of disputes or claims that have already occurred. A common type of ATE policy covers personal injury cases, usually including the payment of adverse costs (opponent’s legal costs and expenses) if a judgment for costs is made at trial.
Changes to auto insurance have increased injured plaintiffs’ need for ATE insurance. The higher threshold could make some lawyers think twice about going to court, but ATE coverage lets lawyers take on more — and smaller — cases. The expert witness tactics that insurers use to “nickel and dime” plaintiffs are blunted when costs are covered by insurance.
In addition to MVA and other Personal Injury cases, ATE insurance is available for Medical Malpractice suits, and other litigation classes.
More companies in the market
In this decade, the number of ATE insurance companies in Canada has blossomed, from only one company in 2011. Today, one broker – who has described the growth of ATE in just the past year as “astronomical” – has access to over 30 companies’ products.
Global insurance and reinsurance companies are expanding their reach into Canada, attracted by this growing market. ATE insurance is an established product in the UK (where it is mandatory), across Europe, and in many other countries.
Late last year, a UK firm acquired a Canadian brokerage specializing in ATE insurance.
More products available
When first introduced, a typical policy provided $100,000 coverage for personal injury claims and cost 1.35% of the cover value ($1,350). If the defendant won, the policy covered adverse costs and the plaintiff’s own disbursements. There was no upfront fee, and premiums were due only when the case concluded successfully. The plaintiff held the product, not the lawyer, so it was portable – if the plaintiff changed lawyers, the policy remained in force. This is still the standard policy in use.
As more competitors have entered the market, more options have become available, so you can tailor policies to the needs of your clients and your law firm. Now, policies starting at only$15,000 coverage are available for Personal Injury cases, with the option to supplement the amount as litigation proceeds. At the other end of the spectrum, a large $300,000 policy is available. “Part cover” options are now also available, which might cover only 50% of disbursements, or only adverse costs (with no disbursements cover), as your case requires. “Staged” policies are also available, with the premium based on a case’s age – premiums increase at later stages.
It’s important for lawyers to understand the difference between Agents and Brokers who offer ATE insurance. An agent represents one company, while a broker deals with several firms.
Informing your client of ATE insurance, and their purchasing the product, do not affect the principles of acting in the client’s best interests or solicitor-client confidentiality.
When assessing ATE insurance products, you have many considerations. Among the questions you will have for an insurance broker, these are key:
- Will you insure all, or some, clients? While providers prefer to cover all of a firm’s cases (often at lower premiums), lawyers usually prefer to “cherry-pick” cases. Some lawyers, however, prefer to have all cases covered.
- The amount of coverage. Providers tend to charge higher premiums for higher amounts.
- The age of the case. Providers usually charge higher premiums for older cases, some based on the current phase of litigation, and some simply on the number of years.
- Does it cover Disbursements? Adverse costs?
- Does it cover Arbitration costs? Interim cost orders?
- Does it gives Delegated Authority to the lawyer? This gives you surety when speaking to clients.
- If the plaintiff loses the case, does the policy also cover the premium?
- If the client changes lawyers, is the policy portable (i.e., transferrable by the client)?
- If the defendant beats an offer to settle, how does the policy pay out?
- Is the client insured for unsuccessful summary judgment motions?
- Is there a set-off clause?
- How much information about a case must you disclose to the provider? All policies require lawyers to attest there is at least a 51% chance of winning; some require more details.
- Does the policy require routine reporting? Such policies give the lawyer authority, from your client, to report to the insurer certain information (such as risk events occurring).
- What could void the coverage? The plaintiff rejecting an offer you recommend could negate a policy. Unfavourable medical or surveillance reports after the policy’s date of issue might also affect this.