Legal Expenses Insurance (LEI)
According to the Ministry of Justice 59% of the UK population have a legal expenses insurance policy in place but less than quarter had heard of Before the Event (BTE) and After the Event (ATE) Insurance. Most people have legal expenses insurance included in their home contents insurance policy or the motor insurance policy often without even knowing it.
What is Legal Expenses Insurance?
Legal Expenses Insurance, as with car insurance, comes in various shapes, sizes and premiums. Generally speaking LEI will cover your legal fees and expenses if you need to bring or defend a claim in court. It will normally cover your solicitor’s fees, barrister’s fees, expert witness’ fees, court fees and any legal fees which you are ordered to pay to the other side (normally if you lose the case). As with most insurance policies LEI is normally purchased in advance ‘just in case’ it is needed one day – this is known as Before the Event (BTE) Insurance. But, unlike other insurance policies, you can also purchase legal expenses insurance after the need for legal action has arisen, this is known as After the Event (ATE) Insurance.
Before the Event (BTE) Insurance
Before-the-event (BTE) insurance protects the policyholder against potential litigation costs that would be incurred following a triggering event. The insured costs normally include solicitors’ fees, barrister’s fees, expert’s fees, court fees and any legal costs awarded to the other side. Before the event legal expenses insurance is often included in home contents insurance policies and car insurance policies, however, it can also be included as a benefit of trade union membership.
After the Event (ATE) Insurance
After-the-event (ATE) insurance is purchased after an event which gives rise to litigation. For example a person who is involved in an accident and is injured may purchase ATE insurance to cover themselves against the cost of disbursements and also their legal fees in the event that they lose the case. If an ATE insurance policyholder loses a case, the insurance company pays the other side’s legal costs and disbursements as well as the policyholder’s own. Some solicitors, often in personal injury no win no fee agreements, will require clients to purchase an ATE policy before proceeding with a case.