BTE insurance is taken out before an actionable event has occurred in order to insure against the risk of future legal costs. It is often purchased as an ‘add-on’ to existing policies. The majority of people who purchase this are not aware of the coverage it provides and rarely make use of it.
Whilst the government and insurers are encouraging more people to take up these policies, there are no specific changes in this area.
ATE insurance is taken out after the actionable event (ie: accident) and will protect the Claimant from having to pay certain legal costs. In the event that the claimant loses the case, ATE insurance provides that the Defendant’s costs will be paid by that provider (subject to terms and conditions set by them). A Claimant does not have to pay for these Premiums but in the event that the claimant wins his case, they are recoverable from the Defendant.
For these policies taken out before 1st April 2013, the Premium is still recoverable from the Defendant. Post 1st April 2013, ATE Premiums are not recoverable in the main, save for a minor exception in relation to expert reports in clinical negligence claims. Recently, the House of Commons Joint Committee on Statutory Instruments has questioned whether this exception is ultra vires and it is presently unclear whether the exception will stand. Additional liabilities continue to be recoverable in mesothelioma, insolvency and defamation claims, at least until the government undertakes a review of this area in 2015. Whilst ATE policies are still available to purchase, this will only be so at the litigant’s expense.
A Claimant may feel prudent to take out an ATE Policy just to protect their position. However, this does tie in with the Qualified One Way Cost Shifting which has been introduced for all Personal Injury Cases as an alternative to ATE Insurance. Due to the fact that Defendants will use Part 36 offers more tactically, litigants may be encouraged to purchase these policies direct, preferably before 31 March 2013.