The reality of the value of ATE insurance for high-net-worth clients

Andy Lyalle, Senior Business Development Manager at Temple Legal Protection

Andy Lyalle, Senior Business Development Manager at Temple Legal Protection

By Any Lyalle, senior business development manager at Legal Futures Associate Temple Legal Protection

I often hear commercial dispute resolution practitioners, unlike their personal injury and clinical negligence colleagues, say “Our clients are not interested in ATE Insurance or disbursement funding because they can afford to pay disbursements and bear the opponents costs if the case is unsuccessful”. I have a few things to say about this view.

In relation to ATE Insurance and disbursement funding high-net-worth clients and businesses may weigh up the options and decide against insuring their case or taking advantage of disbursement funding. However, many do (for reasons I will expand upon) or are pleased to have at least had the options explained to them.
Defamation and privacy cases can be put to one side because this is the one area of law whereby an ATE insurance premium is still recoverable to the successful party. In every other case the insurance premium is irrecoverable. For example if you approach Temple and we agree that, prima facie, there are reasonable prospects of success – we will give you a non-binding, indication of the premium you can take to your client. A proposal form will ultimately need to be completed and if we offer insurance terms the client can weigh up the premium.

A high-net-worth client or business may decide that the case prospects are good and that their lawyer and Temple as the insurer concur with that; they are “all in” and ready for the cost if the case is unsuccessful. However, we find that many high-net-worth clients like the option of “hedging”. That is, the certainty of knowing what their financial outcome will be – whether they win or lose their case. Also, with no premium payable until a successful case is settled plus damages recovered and no premium payable if the case is unsuccessful all adds extra value to this strategy.

A very successful investor will often “hedge” their position even if the odds are hugely in their favour. An example of the above is where a law firm has agreed terms with a bank to pursue lender claims. Clearly the bank can cover the cost of unsuccessful cases and fund disbursements. However, the bank appreciates the position whereby if a case is successful they will recover their
damages minus an insurance premium and disbursement funding interest. If the case is unsuccessful they will have nothing to pay as the adverse costs are insured and any disbursements incurred by them are also insured. The lawyer and Counsel will often be signed up to a specific deal with the bank.

Why would a high-net-worth client or company take advantage of disbursement funding where there is interest to be paid? Temple has a competitive interest rate of 10% but the client will pay 0% if using their own money or a lot lower if the money is obtained from a bank…

…So why would they use disbursement funding? Wealthy clients often like the idea of using other people’s money to fund cases rather than tie up their own. They will not pay the disbursements back until the case has finished and damages recovered. Also, if the case is unsuccessful they will not pay the disbursements or interest back. If they are funding the case themselves or via a bank, they will be paying out money immediately and have to start paying the bank back very quickly.

In summary, it is good to give all your clients all the options and let them decide if they wish to utilise any of them. It is better that they hear about ATE insurance and disbursement funding from you rather than someone else after their case has been unsuccessful.

To find out more about litigation Insurance and disbursement funding and our information guides for solicitors and for clients please contact Andy Lyalle, Senior Business Development Manager on 07936 903767 or via email to


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