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Insurance explained
After-the-event (ATE) insurance is legal expenses insurance bought after a dispute has arisen, mainly to cover the risk of paying the other side's legal costs if a claim fails. It matters because a losing party can be ordered to pay much of the winner's costs, which can outweigh the value of the claim.
Part of: Commercial insurance
In short
After-the-event insurance is legal expenses cover bought once a dispute exists. It mainly protects a claimant against paying the opponent's legal costs if the case is lost, and often covers the claimant's own disbursements such as expert fees. It is usually paired with a conditional fee agreement, which deals with the claimant's own lawyer. Since the LASPO 2012 costs reforms took effect on 1 April 2013, ATE premiums generally cannot be recovered from the losing side, so premiums are often deferred and sometimes payable only if the case wins.
After-the-event insurance, usually shortened to ATE, is a form of legal expenses insurance taken out once a legal dispute already exists. It is most often bought by someone bringing a claim, such as a business pursuing a former adviser for professional negligence or a company chasing a significant contract debt.
The main risk it addresses is adverse costs. In civil litigation in England and Wales, a party who loses can be ordered to pay a substantial part of the winner's legal costs. The government's explanatory notes to section 46 of LASPO 2012 describe ATE as insurance taken out against the risk of paying the opponent's costs and the policyholder's own disbursements if the case is lost.
The process usually works like this:
Because the insurer is betting on the outcome, ATE is usually only available where a solicitor and underwriter consider the claim has reasonable prospects of success.
| Item | Usually covered? | Notes |
|---|---|---|
| Opponent's costs if the case is lost | Yes | The core cover, up to the limit of indemnity. |
| Own disbursements, such as expert and court fees | Often | Some policies cover these only if the case is lost. |
| Own solicitor's fees | Usually not | These are commonly dealt with under a conditional fee agreement. |
| Damages the policyholder hoped to win | No | ATE protects against costs, not the value of the claim. |
| Costs after an unreasonable refusal to settle | Possibly not | Many policies require the insured to follow legal advice on offers. |
| Costs incurred before the policy started | Often excluded | Some providers cover earlier costs by agreement. |
Premiums are often deferred, meaning they are not paid until the case ends, and sometimes contingent, meaning they are only payable if the case succeeds. Where a premium is contingent and the case is lost, the policyholder commonly pays nothing for the cover. Arrangements vary between providers and should be read carefully.
The economics of ATE changed with the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
Before LASPO, a successful claimant could usually recover the ATE premium from the losing party under section 29 of the Access to Justice Act 1999. Section 46 of LASPO repealed that rule and inserted a new section 58C into the Courts and Legal Services Act 1990. According to the explanatory notes, ATE premiums now cannot be recovered from a losing party except in limited circumstances, principally the part of a premium that relates to expert reports in certain clinical negligence proceedings.
Section 44 made a parallel change to conditional fee agreements. The explanatory notes state that a success fee under a CFA will no longer be recovered from a losing party in any proceedings, although a lawyer can still recover it from their own client.
The LASPO commencement order brought sections 44 and 46 into force generally on 1 April 2013, with some categories of proceedings initially carved out. The practical result is that a winning claimant usually pays the ATE premium and any success fee out of the damages or money recovered, which is why premium structure matters so much.
ATE is often confused with two related arrangements.
Under a conditional fee agreement, often called "no win, no fee", the lawyer generally receives no fee from the client if the case is lost and may charge a success fee if it is won. A CFA deals with your own lawyer's charges. It does nothing about the opponent's costs if you lose. ATE fills that gap, which is why the two are commonly used together.
Before-the-event (BTE) cover is bought in advance, before any dispute, usually as an annual policy or an add-on to business or household insurance. It commonly covers a range of disputes, such as employment, contract and property matters, up to a set limit, and often requires the insurer's panel solicitors to be used, at least at first. ATE is bought for one specific dispute that already exists.
A common misunderstanding is that a business without BTE cover cannot get legal costs protection. ATE may be available instead, but it is case-specific and underwritten on the merits. ATE providers often ask whether BTE cover exists before quoting. Our page on commercial legal expenses insurance explains the BTE side, and professional indemnity vs legal expenses sets out how both differ from PI.
ATE is used where the costs risk of litigation would otherwise stop a business or individual from pursuing a valid claim. The examples below are illustrative, not case studies.
Defendants can sometimes buy ATE too, though it is more commonly used by claimants. Professionals facing a claim usually look first to their PI policy; see being sued for professional negligence.
Apex arranges after-the-event insurance for professional negligence claims, working alongside your solicitor; a broker reads every enquiry.
Mainly the other side's legal costs if you lose your case, up to the policy limit. Many policies also cover your own disbursements, such as expert and court fees. ATE does not usually cover your own solicitor's fees, which are commonly dealt with under a conditional fee agreement, and it does not normally pay the damages you were hoping to recover.
Generally not, for policies covered by the post-LASPO rules. Section 46 of LASPO 2012 removed the general right to recover ATE premiums from a losing party, leaving limited exceptions such as part of the premium for expert reports in certain clinical negligence cases. The winning party usually pays the premium out of the money recovered.
No. No win, no fee usually describes a conditional fee agreement with your own lawyer, which affects what you pay them. It does not protect you against paying the opponent's costs if you lose. ATE insurance covers that risk, so the two are often used together.
Usually once your solicitor has assessed the claim and before significant costs build up. Some providers will not cover costs incurred before the policy starts, and limits are often staged, so arranging cover early can matter. Check first whether any existing legal expenses policy already covers the dispute.
ATE policies commonly require you and your solicitor to report changes in prospects, and many allow the insurer to withdraw cover if the merits deteriorate. Policies also often require you to follow legal advice on settlement offers. Read the conditions on cancellation and on costs incurred before withdrawal before you accept the policy.
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Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
