The document discusses preparing an application for after the event legal expenses insurance (ATE). It provides guidance on the key information insurers will need, including a brief case summary, financial details, and estimates of costs. It recommends being realistic about the appropriate level of cover and notes insurers are conscious of risk alignment. Common types of cover include adverse costs, own disbursements, and sometimes own costs, though the latter is less common.

1. The views32
Q: After discussing funding/insurance
options on a new commercial claim,
the client wishes to apply for after the
event legal expenses insurance (ATE).
How should I prepare the application?
What cover should the client seek?
A:You and your client will need
to complete and submit a
proposal form (usually obtained
via a specialist ATE broker). The
precise detail required may vary,
but insurers will be looking to
obtain key information to enable
them to form an initial view
quickly. It is the quality rather than
the quantity of information provided that is important.
In addition to basic (but important) information on
the parties involved, the following will be essential for
the review process.
Brief Case Summary with key documents
• What type of claim is it?
• What are the applicant’s objectives?
• What are the prospects of success on liability,
causation, and quantum?
• How has the opponent responded?
• Key documents will include statements of case and/or
significant pre action correspondence, and a copy of
Counsel’s/ solicitor’s opinion.
Financials – Does it stack up?
• Estimates and budgets – A budget showing estimated
applicant’s costs to trial, and a reasoned estimate of what
the opponent’s equivalent costs will be are required and
are central to the appropriate level of cover.
• How will the case be funded? – What will be involved?
Standard retainer, full or discounted conditional fee
agreements, third party funding, or from April 2013
damages based agreements?
• Quantum – How is any financial claim calculated and
what evidence supports this?
• Will the opponent be able to pay? – What is the evidence?
• Can the case be settled? - Financially and otherwise.
What cover or ‘Limit of Indemnity’ should the client seek?
Insurers are conscious of risk alignment. Be realistic and
keep the following in mind:
• Adverse Costs: Cover for potential exposure for
opponent’s costs is the most usual ATE cover. Typically
this is based on the estimate for opponent’s costs to
trial. Neither over nor under insurance is desirable.
• Own Disbursements (ODs): OD cover is often
available to cover exposure where ODs are not
reimbursed by sums received. However OD cover
represents a different nature of risk and may not
always be offered or offered in full.
• Own Costs: Cover for own costs is much less
common. If offered it is likely to apply only to a limited
percentage and in particular circumstances.
Matthew Williams, Head of AmTrust Law at AmTrust
Financial Services.
Q: How effective are associations
voicing the issues facing the
industry? In terms of multi-
disciplinary ABSs, are they
relevant?
A:Before I answer this
question I will use the word
consumer when I mean client and
industry when I mean profession.
Not because I wish to dumb
things down but because that is
becoming the norm and for the
sake of clarity and consistency.
There are, I think, two ways
that this question could be interpreted. It could have
been directed at organisations such as APIL, MASS and
FOIL, etc. but it can be also be answered in terms of the
changing support available to law firms in this new age.
With more and more ABSs being created every month
making sure that lawyers are aware of the issues facing
the industry is becoming more and more important.
I spend most of my time monitoring the legal news
that all lawyers are expected to follow. It is a full time
job. Keeping up to date with what is happening in the
legal profession is now a very time-consuming exercise.
Can most firms afford to employ one person to ensure
that they do not miss something important, either
in relation to compliance and regulatory matters or
making sure they have access to the best products and
services available?
Before 8.00 am every morning I will have checked
over ten different websites, starting with the SRA
(in November alone there were six new posts on the
‘news and alerts’ section) and the Practice Notes
Section of the Law Society website. Every day I
receive numerous emails from companies that think
they have created the latest and best solution to a
problem, ranging from fraud detection and prevention
to ways to win new work.
Two other burgeoning sectors is legal brands and
cost comparison websites. Trying to establish whether
any of these offer any real help or support is nigh on
impossible. What we do as a group, is discuss these
new businesses and exchange views on how good, or
otherwise, they actually are.
To sum up; keeping abreast of issues facing the
industry when more and more new competitors enter
the arena is more important than ever before. As to
how affective the associations are that voice the issues
facing the industry? I can only comment on one. This
year we have had a 97% renewal rate for Bold Legal
Group members and most of the missing 3% will have
merged with other firms.
Rob Hailstone, Bold Legal Group
ML // January 2013