In our previous article, we looked at the rapid growth of After The Event (“ATE”) insurance and how it has evolved to a wide range of product offerings.
When assessing ATE insurance products, there are many considerations. A good “all perils” policy should include:
- Cover Disbursements, Adverse costs, Arbitration costs, and Interim cost orders
- Give Delegated Authority to the lawyer, giving you surety when speaking to clients.
- Cover the premium if the plaintiff loses the case
- Insure the client for unsuccessful summary judgment motions
- NO set-off clause (which could eliminate your client’s settlement award)
- If the plaintiff fails to beat an offer, the policy covers the risks of adverse costs and own disbursements without touching the damages awarded to the client, and the premium is waived.
Beyond these features, you also need to know:
- How much information about a case you must 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 you 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.
For individual cases, these factors will affect the premium:
- 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 others simply on the number of years.
You might want to tailor an insurance package for your practice, in which case you need to consider:
- Will you insure all, or some, clients? While ATE insurance 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.
- If the client changes lawyers, is the policy portable (i.e., transferrable by the client)? Since the premium typically pays on settlement, some lawyers are indifferent about this, while others want the insurance policy in their firm’s control.
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.
As a service to our clients, we have included a list of “Frequently Asked Questions (FAQ’s)” in hopes of better explaining ATE Insurance, their products and benefits.
ATE Insurance – FAQ’s (Frequently Asked Questions)
The following questions apply to the usual conditions that you would find in an “After the Event” policy. However, cases can be subject to individual conditions if insurers deem these appropriate.
Insurance – General
The ATE policy is owned and paid for by the plaintiff.
The premium is due at the successful conclusion of the plaintiff’s case. If a claim on the policy is made, the premium is waived in its entirety. There is no upfront cost, no interest applies to the premium amount, and the premium is waived for unsuccessful or abandoned files.
ATE insurance typically provides cover to your clients for any adverse costs, own disbursements, and failure to beat a With Prejudice Offer, but a program can be tailored to your requirements. ATE insurance also covers interlocutory hearings. Further, an ATE insurance policy has been accepted at the appellant court in Ontario to satisfy a Security for Costs order.
No, this would conflict with your Contingency Fee Agreement (CFA). Your disbursements however are covered from day one of the file.
Cover can be provided for a wide range of personal injury cases including, but not limited to:
- Auto accidents
- Slip/Fall cases
- Employers’ liability
- Product liability
- Sport related injuries
- Animal related injuries
There are also ATE policies available for medical malpractice, employment, and civil/commercial litigation.
The Standard cover is $100k. If you believe that your case requires further cover (if it will go to a long trial for instance) you can apply for an increase.
The Standard ATE insurance cover can be applied retrospectively from the date the CFA was signed by the client. This ensures that all disbursements, even the initial investigatory reports, are captured.
Our brokers have multiple insurers to offer a client firm, with specialist insurers for each class of business. We would not recommend using a one-insurer broker.
Applying for Insurance
Under a delegated authority facility, you can bind any of your personal injury cases so long as the case:
- Is run on a CFA (Contingency Fee Agreement)
- Has prospects of success (determined by you) of 51% or better
- Is within 180 days of the CFA retainer being signed
- Is a plaintiff matter
After the Delegated Authority facility is in place, all that is typically required is a short information form, giving the basics only. A policy document and certificate will be emailed directly to the retained lawyer once processed.
The insurer trusts the lawyers to whom they give a delegated authority facility and follows their expert advice on the case. The insurer recognizes that the lawyer is also taking their own risk (under a CFA) on the case, and so is prepared to follow their advice.
Our licensed brokers will assist in submitting the case to underwriters as they have lawyers in-house to assist.
Nothing. There is no application fee, and all premiums are deferred to the conclusion of the matter and only payable should your client win their case.
No, there is no panel and no set number of files required.
Yes. This means that no premium is payable in the event the case is lost or discontinued. There is no deduction from the level of insurance cover in place to pay the insurance premium.
None; Our brokers have had its agreement passed through the Law Society of Upper Canada’s Practice Management Committee to ensure that the insurer cannot control the file, or influence the management of the file.
There are no dedicated claims adjusters; and no individual tariffs apply per claim. Lawyers should consider this program tantamount to a reimbursement program.
Our brokers only use licensed and regulated Canadian insurers who also have a specialist license to underwrite Legal Expenses Insurance.
Please Note: Nudorra Capital is a litigation loan company that works with law firms and provides loans to plaintiffs in need of financial assistance until their case settles. We are not an insurance company or licensed insurance brokers. As a service to our customers and through a strategic relationship we have with an insurance broker, we will introduce lawyers and/or law firms to a fully licensed and regulated insurance broker that specializes in ATE Insurance products and you or your firm will be able to purchase these products and/or services directly from them.
Nudorra Capital is honoured to have been chosen as a winner in the Litigation Funding Provider category of the Readers’ Choice Awards for Canadian Lawyer Magazine, 2016/17, 2017/2018 and now for 2018/2019. Thank you for your continued support!
We have also received an (A+) Accreditation from the “Better Business Bureau” (BBB) and are Proud Supporters of the OTLA Policy on Conduct of Litigation Loan Companies.