Introduction

1.1 The term “ATE insurance” refers to a policy of insurance taken out after a dispute has arisen. ATE insurance developed in England and Wales following the Woolf Report in 1996.1 It generally covers the litigating party against its potential liability for the costs of the opposing party, as well as the party's own disbursements, if the case is unsuccessful. ATE insurance has become an integral feature of modern class actions,2 particularly in cases funded by a third-party litigation funder, or by a law firm acting under a conditional fee agreement or on a “no win, no fee” basis. In these arrangements, the insurer recoups the premium from any award or settlement.3