Costs insurance — 2022
Published by a LexisNexis Dispute Resolution expert
Last updated on 12/08/2022

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Costs insurance
  • Types of costs insurance
  • Before the event legal expenses insurance (BTE Insurance)
  • After the event insurance (ATE Insurance)
  • Recoverability of ATE premiums
  • Notice of funding—ATE premium
  • Which solicitors can act if insurance is in place
  • Can solicitors recover the costs of liaising with ATE insurers?

Costs insurance

This Practice Note looks at costs insurance (sometimes known as legal expense insurance (LEI)), which is the means by which an insured person is protected against the risks of an adverse costs award in litigation. The two main types being before the event insurance (BTE insurance) and after the event insurance (ATE insurance). This Practice Note should be read in association with Practice Note: Recovery of costs insurance premiums.

Insurance is a complex area and one subject to regulatory requirements. It is however important to understand these requirements as a failure to comply would allow the court to find that the policy is unenforceable and this in turn will limit costs recovery. See further: Insurance contracts—overview and Regulated activities—overview.

LEI policies are regulated by the Insurance Companies (Legal Expenses Insurance) Regulations 1990, SI 1990/1159. LEI insurance will require the payment of a premium for the insurance cover and the cover will be subject to an excess, ie the first £X will not be covered by the insurance and will be payable by the client. The costs of the premium will depend on the amount of cover sought and can range from thousands to millions of pounds. The level of the premium can be set out either as a percentage of the sum insured or as a percentage of the costs incurred at the date that the

Related documents:
Key definition:
Costs definition
What does Costs mean?

Costs are the sums of money incurred in bringing or defending a claim. The court can make various costs orders for the payment of costs. Costs that are recoverable will be assessed by the court if not agreed. Costs budgeting and costs management are means of controlling litigation costs.

Popular documents