ATE Insurance UK: Professional Negligence Cover

Overview

After the Event insurance is a form of legal expenses cover taken out once a dispute has already arisen, typically shortly before or during the early stages of a claim. Unlike Before the Event cover bundled into household or motor policies, ATE is bought specifically for the matter in hand.

In professional negligence cases, the policy is usually designed to protect the claimant against adverse costs, meaning the legal costs they might be ordered to pay the defendant if the claim fails. It can also cover their own disbursements, things like court fees, expert witness charges, and barristers' fees paid on a non-conditional basis.

Cover limits, exclusions, and premium structures vary significantly between insurers. Many ATE policies in this area are written on a deferred and contingent basis, so the premium only becomes payable if the claim succeeds. Since the Legal Aid, Sentencing and Punishment of Offenders Act 2012, ATE premiums are generally no longer recoverable from the losing defendant in most civil claims, so the cost usually comes out of the claimant's damages.

Key steps

1. Work out whether you actually need ATE cover. Not every professional negligence claim justifies the expense of a policy. If the case is modest, if the defendant has limited assets, or if costs exposure is low, the premium may eat too much of any eventual recovery. Sit down with your solicitor and map out the realistic costs risk before shopping for a policy.
2. Gather the case information an insurer will want to see. Underwriters assess risk based on the strength of the claim, the identity of the defendant, the likely quantum, and the evidence available. Expect to provide a case summary, key correspondence, any expert opinion obtained so far, and a costs budget. The more coherent the picture, the better the terms you are likely to get.
3. Compare policies on cover, exclusions, and premium structure. Headline cover limits matter, but so do the small print exclusions, the position on discontinuance, and whether the premium is staged, deferred, or payable up front. Ask how the insurer handles changes in the case, such as a shift in quantum or the addition of new defendants, and how cover responds if Part 36 offers come into play.
4. Understand how the premium interacts with your damages. In most current professional negligence claims, the ATE premium is not recoverable from the defendant, so it is typically paid from damages at the end. Make sure you have a clear, written explanation from your solicitor of how the premium, any success fee under a conditional fee agreement, and other deductions will stack up against your likely recovery.
5. Keep the insurer properly informed as the case develops. ATE policies usually contain ongoing disclosure obligations. Material developments, such as a poor expert report, a significant settlement offer, or a change in prospects of success, normally need to be reported. Failing to do so can give the insurer grounds to avoid the policy at exactly the point you need it most.