ATE INSURANCE FAQs

ATE insurance is an insurance product used to manage the financial risk of litigation. It provides a party to a dispute with cover for their own and/or adverse costs exposure in exchange for payment of a premium.

It is called ‘after the event’ insurance because the policy is taken out after the dispute arises and responds if the policyholder’s dispute concludes unsuccessfully. Insurers can also provide security instruments to meet the security for costs requests of defendants.

You can apply for ATE insurance at any stage of proceedings. However, underwriters are typically less enthusiastic about insuring a case that is close to trial, as the risk of having to pay out is much higher. Most commonly, ATE insurance is taken out when proceedings are issued.

• ATE gives your client the peace of mind that if the action is lost, they will not be exposed to their opponent’s costs or own disbursements.
• ATE enables a client to transfer the risk of adverse costs from the litigation to the ATE insurer.
• ATE provides an extra incentive for an opponent to settle the case because an independent ATE insurer has looked at the case and has decided to support the claim.
• ATE encourages early settlement when premiums are low.
• ATE “levels the playing field” and enables meritorious litigation to proceed that otherwise would not be pursued.
• ATE enables a client to fix, or at least have much better control over, their costs exposure to the litigation.

The structure of our ATE insurance policies is straightforward. We offer law firms the broadest level of authority to run cases to trial. Our scheme, backed by an ‘A’ rated insurer, offers many benefits including:

• No set up costs.
• Competitive premiums.
• Simple online policy issuing system for easy administration.
• The premium is payable in the event of a win at the conclusion of a case and self-insured in the event of a loss.
• Direct access to underwriters for prompt decisions on top-ups and referrals.
• Minimal on-line reporting requirements.
• Delegated authority to run cases to trial without obtaining consent on each case. • Fully retrospective cover.
• Full part Offer/Tender/Caulderbank cover, including interlocutory appeals.
• Deferred, stepped, fully insured premiums.
• In Medical Negligence and Personal Injury matters we allow interim claims under the policy for expert reports costs.

The key issues for us are the prospects of success of the case and the prospects of recovery of costs from the opponent. If you do not think it is a very strong case – it is unlikely we will think it is either! We make our own underwriting decisions based on the advice given by the solicitor or counsel conducting the case and occasionally we may seek our own counsel’s advice at our own expense.

• Are the legal and factual merits strong? We typically expect an assessment of the merits and prospects of succeeding at trial to be 60% or more;
• Does the client have the funds to see the matter all the way to trial? If not, what arrangements have been – or are proposed to be – put in place to ensure the client is able to do so?
• Does the opponent have the financial resources to satisfy any monetary judgment and adverse costs award?
• Does your client have the financial resources to pay any balance of the irrecoverable premium and irrecoverable costs?
• Is the costs to value ratio more than 1:2? We would expect the ‘value’ of the claim to be at least twice the projected costs of taking it to trial. Otherwise the costs are likely to be disproportionate and any likely recovery of damages will not be sufficient to pay all stakeholders in full. This could leave the client with very little, if anything.

Why then have we paid out over €100 million in claims? There is a 40% chance that you could lose your case and have to pay the other side’s cost s and your own disbursements. If the other side’s costs for defending the claim come to €100,000, you will have to pay those costs. With litigation insurance cover in place, Temple will pay those costs and your own insurance premium.

The application process is free of charge and straightforward:

• Click on the TOPS Ireland link and register your firm details.
• Complete the Temple Case Checker. This is a short questionnaire requiring details of the case – it’s value, level of indemnity required, jurisdiction, type of case and short synopsis. Remember this service is free of charge and there is no obligation to proceed once you have submitted your case enquiry.
• If Temple believe the case is one which may be insurable we then proceed to the next stage where we invite the firm to complete a formal Proposal Form and upload digital copies of all relevant papers including (but not limited to) any letter of claim, letter of response, draft pleadings in electronic booklet format and any Counsel’s advice.
• We aim to turn this around within ten working days.
• We will either ask for further information, offer indicative terms or decline it with reasons.

If you wish to discuss the case before submitting papers, any of our underwriting team are available to do so.

This is the total sum you wish your client to be insured against. It comprises two elements:

(a) the opponent’s projected costs and outlays – up to and including trial;

(b) your client’s projected outlays – up to and including trial.

Unless we otherwise specify in any offer of terms, the cover is retrospective and thus covers all costs and disbursements incurred prior to the date of inception of the policy. Depending on when the case is presented to us this can amount to a considerable sum.

Temple can offer a limit of indemnity starting from €15,000.00 up to €2,000,000.00.

If a Temple ATE insurance policy is issued, it specifically excludes any costs of appeal, whether in relation to an interlocutory decision or judgment at trial. If you wish to appeal any decision or are the respondent in any appeal, you can apply to us for insurance and the application will be dealt with in the usual way. If we offer terms which are accepted by you, a separate and distinct policy of insurance will be issued relating to the appeal. This will entail the payment of an additional premium in the event of success (in addition to that of the underlying policy).

We do not offer cover in respect of your own solicitors’ costs, counsel’s fees, and recoverable VAT.

If your costs and outlays estimates prove incorrect and, as the case progresses, the actual costs exceed the predicted costs by a significant margin this could mean your client is under-insured and without adequate protection for the financial risks of litigation. In such circumstances you can easily apply to us for an increase in the level of indemnity. Subject to there being no material deterioration in the merits and prospects of succeeding at trial we will, more often than not, agree to such request.

Yes. Temple does not charge any assessment fee for considering cases and refusal to insure should not offend. It does not mean we think the case will be lost, simply that it does not meet our underwriting criteria, and inevitably, we have to take a reasonably cautious approach.

Our premiums for a single ATE insurance risk are typically range from up 25-50% of the limit of indemnity required depending on when the matter settles, with the premium usually increasing as the matter gets closer to trial. Temple was the first ATE insurer to introduce the deferred, stepped, and self-insured premium model. This has become the standard model in the ATE market. Log on to TOPS here to access our premium rate card and policy terms for further information.

Insurance is available for a wide range of litigation types, including, but not limited to:

• Personal Injury
• Medical Negligence
• Professional Negligence
• Competition law
• Group actions
• Contract Disputes
• Insolvency proceedings
• Subrogated rights recoveries
• Defamation/Privacy claims
• Partnership disputes
• Inheritance act/contentious probate matters
• Intellectual property
• Arbitration

ATE Insurance gained legal recognition in Ireland following the landmark decision in the case of Greenclean Waste Management Ltd. V Leahy [(No. 2) [2014] IEHC 314] solidifying its position as a potentially valuable tool for individuals and businesses seeking legal costs protection and was deemed not to constitute maintenance and champerty.

In personal injury and medical negligence actions the Irish plaintiff and their solicitor have traditionally found themselves at the distinct disadvantage of having to litigate against defendants with the full backing of a deep pocketed insurer with full recourse to the necessary financial resources to defendant a claim to its fullest extent.

Temple considers that this puts the plaintiff at a wholly unfair advantage in the litigation as the plaintiff or their firm will not have that same access to that same level of financial support.

Temple’s ATE policy, incorporating interim claims, allows the plaintiff make a claim under the terms of the policy to resource the procuring of medical and other expert reports.

This has the effect of allowing a plaintiff to get to trial without incurring the cost of court fees and outlays which might otherwise dissuade the insured from bringing a claim to vindicate their legal rights. Thus ATE with our Interim Claims facility is an important product in securing access to justice for individuals with limited financial resources.

This solution has not been used in Ireland previously and is designed specifically to meet the clear need for a cost effective solution for payment of outlays during personal injury and medical negligence legal actions. Otherwise insureds or their solicitors will be paying for these outlays themselves which presents a financial barrier for consumers in progressing with litigation.

ATE insurance with an Interim Claims facility can help to stabilise the law firm’s finances by ensuring that legal outlays if funded by the firm do not become a burden in the event of an unsuccessful case as the Interim Claim payments for expert reports are covered under the terms of the ATE policy.

Our TOPS online policy system has been designed to make policy administration quick and easy. It enables solicitors to apply for cover, upload papers, maintain records, download documents and analyse your caseload and most importantly make a claim under your policy if the need arises.

Temple Ireland will only work with solicitor firms who undertake to Temple not to charge their client with any assistance provided in incepting or administering a Temple Ireland policy. We adopt this rule as if a solicitor bills the client for any work associated with the policy then the solicitor’s firm is deemed to meet the definition of an “insurance intermediary” or an “ancillary insurance intermediary” within the terms of the EU Insurance Distribution Directive and must itself be registered and regulated by the Central Bank of Ireland.

Claims can be made where there is a liability for the insured to pay the costs of the other side in the litigation. This will normally occur when the litigation is discontinued, where the insured’s solicitor no longer assesses the legal prospects to be sufficient or when the litigation is unsuccessful at trial. Liability for costs can also occur on an interim basis throughout the duration of the legal action where a court may award costs to be payable but the underlying legal action proceeds. Outlays can be claimed on an interim basis or if the case is discontinued or unsuccessful therefore when the legal action has ended.

Claims are made by the solicitor on behalf of their client through the Temple s Online Policy System. Temple Ireland are committed to responding to claims within 10 working days. All valid claims are paid promptly with notifications of ongoing progress provided to the solicitor.

ATE provides numerous benefits to clients wishing to pursue a legal action. These include, but are not limited to:

Would your job be less stressful if you didn’t have to worry about an adverse costs finding against your client?  In 2018 a Law Society of Ireland suggested that that its members frequently experience high levels of stress that negatively impact on their mental health and wellbeing, with 57% describing very high or extreme levels of stress. At Temple Ireland we believe our ATE insurance has a significant role to playing in reducing stress levels for the litigation practitioners in removing a key stress factor: an adverse costs finding against your client. At Temple, we do the heavy lifting so you don’t have to.

Temple has produced this client guide that may be forwarded to your client.