If your firm continues to take on work on a conditional fee arrangement (CFA), After the Event insurance can provide your client with an indemnity for legal costs, in the event that your client's litigation or arbitration is unsuccessful.
In addition to your own legal fees and disbursements, the policy will cover potential liability for adverse costs [hover over to read: Qualified One-way Costs Shifting ("QOCS") applies to any CFA signed after 31st March 2013, however there are still circumstances in which an unsuccessful claimant may be liable for the defendants costs] .
AtE in commercial litigation has seen rapid growth in recent year, and remains a viable option, notwithstanding the Jackson reforms. Damages Based Agreements (DBAs) have been extended to apply to all civil disputes. Under a DBA, the solicitor is paid only if the client's case is successful, and the fee is calculated as a percentage of the damages awarded to the client. Caps apply to any contingency fee.
Lockton has been instrumental in arranging AtE insurance for some of the highest value AtE funded commercial litigation disputes - placing limits of up to £10m for our clients.
For more information, or to discuss whether AtE could add value for your clients in a particular litigation action, contact Brett Warburton-Smith.