Elite Insurance Company have collaborated with TheJudge to develop an ATE insurance product which gives Insolvency Practitioners more certainty on their fee outcome in circumstances where the total recovery is lower than initially anticipated. TheJudge has received lots of feedback from IP’s and insolvency lawyers over the years stating that insurers are reluctant to take a reduction on their premium even when all other stakeholders are accepting a reduction on the fees due to them. Elite used this feedback constructively and the result is a unique, innovative, ATE facility for insolvency litigation.
The new facility offers an insurance policy that contains a payment waterfall which ensures the IP and the law firm receive payment for their own fees (excluding CFA success fees) before the premium is paid to the insurer. Elite and the creditor then make up the second tier of the waterfall, with insurers receiving 80p in the £1 parri passu with the creditors taking 20p in the £1, in the event that the ATE premium cannot be fully discharged. The balance is then for the lawyer’s success fee and the creditors.
This is the only policy TheJudge are aware of that states from the outset that the IP’s and lawyer’s base fees are paid first before the ATE premium and also provides the creditors with a guaranteed recovery in the event that the full ATE premium cannot be discharged. In these circumstances it has been very well received by IP’s so far.
The policy is only available in the run up to 1st April 2015, and only to law firms that make an application to use this facility. TheJudge would recommend that insolvency litigators interested in this product get in touch as soon as possible given the limited time for which it is available.