ATE Insurance

lawyer with clients

When considering commencing a lawsuit against a wrongdoer, a common concern for a potential plaintiff is the costs associated with litigation.

Although plaintiff personal injury firms typically work on a contingency fee basis, meaning that the client does not pay the lawyer’s fees unless the plaintiff wins, this agreement does not include costs and disbursements. Throughout the course of litigation, lawyers incur fees on behalf of the client such as: obtaining medical records and documents, hiring expert witnesses, travel costs, and court filing fees.

Pursuant to a typical retainer agreement, an individual is responsible to pay for the disbursements accrued for their file if they lose the case or terminate the client-solicitor relationship. When a party loses in litigation, they are also required to pay the opponent’s “costs” of litigation.

To protect yourself against these litigation risks, an individual can purchase After the Event (ATE) insurance. At the signing of the retainer agreement, a client can opt-in to pay the insurance premium, which in 2022 is approximately $2,000.00. This premium is paid only where the party is successful in their case through a settlement or trial verdict. The premium is then paid out of the recovered funds. Because the premium is contingent on success, the premium is not paid if the party is not successful.

The most common point of confusion pertaining to the payment of this premium is how it is calculated. For ease, please find below an example of how the payment of the premium works, where a $50,000 settlement has been reached, there are $2,000 in disbursements, and there are no monies owing to third parties.

ATE Insurance

It is important to review the ATE policy in full. A typical policy will provide coverage up to $100,000.00 which would cover disbursements, adverse costs award, and H.S.T. It is also important to recognize that the accumulation of disbursements and awarded costs can exceed $100,000.00. You should discuss the terms and risks associated with your lawyer. ATE insurance is a great tool to protect against the risks of litigation. It allows a party to litigation to navigate their lawsuit with confidence.

If you or a loved one have been injured in a slip and fall or motor vehicle collision, contact us at JEWELL RADIMISIS JORGE LLP. and a member of our team will be happy to assist you.
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