“What the insurance companies have done is to reverse the business so that the public at large insures the insurance companies.”
Before the Event (BTE) insurance, is probably the most cost effective way of making a Claim against another, with the assurance that if you win or lose, you will usually be covered with an amount to pay your legal costs, including that of your opponent’s.
The main legal insurance provider within the UK is DAS Legal Expenses Insurance, whose limit of indemnity is typically £50,000. This means that DAS will pay out up to £50,000 in costs to your solicitor for initiating and pursuing the claim. If the case goes on to court, the Barrister’s fees would usually be paid out of the indemnity as well.
If you lose the case, the other side’s legal costs should also be covered within the £50,000 pay-out. The downside to the limit of indemnity however, would mean that if costs add up to ‘more’ than £50,000, the extra amount will have to be met via your own pocket.
BTE Insurance is in most cases, an ‘add-on’ benefit to another type of insurance, such as Motor Insurance or Buildings and Contents however, it is also available as a ‘stand alone’ insurance policy. When taken out alongside your main insurance policy, the monthly premium you pay for the BTE policy tends to be a great deal cheaper than taking such a policy out on its own. You can make a claim on the policy even years later, as long as you were covered by the policy ‘at the time of the incident’.
The downside to taking out BTE Insurance which runs alongside another insurance policy is that not ‘all’ disputes are covered, and may require further stand-alone cover. Nonetheless, it is best to make sure this insurance is available alongside another insurance policy you may have, as many types of litigation ‘are’ covered, such as: personal injury, employment disputes or contract disputes. The policy should cover your family’s claims, as well as those made by you.
When a claim arises, a legal helpline is provided for you to register your claim. After assessment of the claim by the Legal Claims Department, and considering there is at least a 51% chance of success, a solicitor will contact you for further details in order to initiate your Claim.
In most cases the BTE provider will have their own panel of solicitors who will pursue your Claim on your behalf. If you wish to use your own solicitor, you will have to enquire with your insurer’s legal helpline whether they are registered with the Panel before proceedings are issued. If your solicitor is not registered with the panel, the legal expenses provider may ‘not’ pay out any legal costs.
After the Event (ATE) insurance is a more expensive way of covering litigation costs, as it usually means that you will have to pay 25% or more of the insurance cover risk, and under new Legal Aid reforms since April 2013; the premium is no longer recoverable as a legal cost, unless the Claim is for:
It is usually taken out to insure legal actions of events or incidents with have already taken place, and there was no BTE insurance in place, at the time the event occurred.
This type of insurance covers legal costs of your opponent, should you lose. ATE insurance normally works alongside Conditional Fee Agreements (No Win No Fee), providing legal expenses cover for both your legal costs, and that of the other side’s, should your case fail.
What will legal expenses insurance ‘cover’ and ‘not cover?’
Normally, Legal expenses insurance ‘will cover’ a range claims brought, from:
It will not cover: