ATE Insurance UK: Buyer Pitfalls to Avoid (2025)

Overview

ATE insurance is a specialist product designed to protect a party to litigation against the financial consequences of losing the case. Typically it covers the other side's legal costs if a costs order is made against you, and it may also cover your own disbursements such as court fees, expert reports, and barrister fees.

It is distinct from Before the Event (BTE) cover, which is often bundled into home or motor policies and taken out long before any dispute arises. ATE is usually purchased after a claim has crystallised, which is why the premium reflects the insurer's view of how winnable the case actually is.

In many arrangements the premium is deferred and self-insured, meaning you only pay if you win. That is attractive, but it also means insurers are selective, and the policy wording can be dense. Reading it as carefully as you would a loan agreement is the right mindset to bring to the purchase.

Key steps

1. Read the policy wording in full before you commit. ATE policies are drafted tightly, and the exclusions often matter more than the headline cover figure. Look for the definitions section, the list of excluded events, any conduct requirements placed on you, and the circumstances in which the insurer can cancel or avoid the policy. If a clause is unclear, ask the insurer or broker to explain it in writing before you sign.
2. Disclose everything material, even if it feels awkward. The Insurance Act 2015 places a duty of fair presentation on commercial insureds, and consumers have their own disclosure duties under separate legislation. In practice this means telling the insurer about anything a prudent underwriter would want to know: weaknesses in your case, prior offers, limitation issues, conduct problems, or earlier legal advice you have received. Holding things back to get a better premium is a false economy because it can void the policy later.
3. Compare at least two or three quotes on like-for-like terms. Premiums, cover limits, and exclusions can vary significantly between providers, and the cheapest headline premium is not always the best deal once you account for what is actually covered. Ask each provider for the key policy document, not just a summary, so you can compare the substance rather than the marketing.
4. Arrange cover early, not on the courthouse steps. While ATE can only be bought once a dispute exists, leaving the purchase until just before a hearing limits your options and can push the premium up. Some insurers also apply waiting periods or will not underwrite once proceedings are well advanced. Getting cover in place early gives you room to negotiate and leaves you protected through the riskier stages of the case.
5. Understand how the premium is funded and when it becomes payable. Some policies require the premium upfront, others defer it until the case concludes, and some self-insure the premium so it is only paid on a win. The recoverability of ATE premiums from the losing party was largely abolished for most cases by the LASPO reforms in 2013, with limited exceptions. Make sure you know who pays, when, and what happens if you discontinue the claim partway through.