After The Event (ATE) insurance, a product that has been offered overseas for some time, is now becoming available in Australia. ATE insurance is defined by Universal Legal Protection Limited, a U.K. ATE insurance broker, as follows:

‘After the Event Litigation Insurance is a relatively new type of insurance that protects a Solicitor’s client (usually the claimant, but it could be the defendant in a legal action) when or after that person or entity becomes aware of the need to litigate to protect their interests. The policy covers the client/Insured against what could prove to be substantial costs that the client/Insured will be liable for should the legal action prove unsuccessful.’

Interesting questions about the procedural operation of ATE insurance are currently being resolved by the Courts. For example, Associate Justice Lansdowne of the Supreme Court of Victoria recently reserved judgment on an application for security for costs from an ATE insurer based overseas. The party seeking security for costs sought the security in the usual form, being either a bank guarantee, or funds paid into Court. The ATE insurer offered security for costs by way of a Deed of Indemnity and did not consent to proffer a usual form of security.

A similar application was heard before Associate Justice Ierodiaconou last week, also in the Supreme Court of Victoria. The Defendant (the applicant in the application) argued that if security for costs is to be provided by way of a deed of indemnity, the costs of enforcing a foreign judgment should properly be included in the amount of the security. The application was adjourned to allow the Defendant time to file evidence about the costs of enforcing a foreign judgment.

The outcomes of these applications will provide important guidance for how security for costs is provided in the ATE context.

-Kelsey Ippolito