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What is Before Event Insurance?

If you are involved in a legal dispute, you may already have insurance to cover your legal costs. In other words, you may have an insurance policy which will pay for your legal fees and may also cover payment for anyone else’s legal costs for which you may become liable. This type of legal fee protection insurance is usually called ‘before the event’ (‘BTE’) insurance, as the policy existed before the incident giving rise to your claim occurred.

Research has shown that many people have such legal expenses insurance but do not know it! There are several types of legal expenses insurance. Sometimes it is included with another policy. For example, it may be included as part of any of the following:

• Your buildings insurance policies,
• Your contents policies,
• Your policy for a motor vehicle, caravan or boat.

If you have a mortgage, the lender will sometimes arrange the building insurance. You should contact the lender to ascertain the identity of the insurance company insuring your property and obtain the policy.

We strongly recommend you contact all the insurance companies and brokers who arrange any form of insurance on your behalf and enquire whether you have legal expenses insurance.

You must do as extensive a search as possible. Gather all the insurance policies you have and show them to a Solicitor. The solicitor can then ascertain if you have the benefit of legal expenses insurance (LEI) to pay for your legal costs in the case and also cover the eventuality of you being ordered to pay someone else’s costs.

Note also that LEI may cover you if a member of your family or anyone else in your household has a policy. Thus we recommend you make extensive enquiries about what policies other members of your family and/or your spouse or partner may already have.

Such an approach was recommended by a former Master of the Rolls who stated in the case of Sarwar v Alam [2001] EWCA Civ 1401:

“Proper modern practice dictates that a Solicitor should normally invite a client to bring to the first interview any relevant motor insurance policy, any household insurance policy and any stand-alone BTE insurance policy belonging to the client and / or any spouse or partner living in the same household.”

Legal expense insurance policies usually require you to notify the insurance company about the possibility of a claim within a particular period after the incident. In any event, you should notify the insurers as soon as possible.

If you do not do this within a specified period, you may lose the benefit of such cover.

Having the benefit of Before the Event Legal Insurance is hugely reassuring as it means the policy will cover your legal fees, but just as importantly any legal fees you might otherwise be required to pay to another party to the claim, will also be covered.

The importance of notifying your legal expense insurer as soon after an incident as possible, cannot be overstated.

What legal costs will be covered?

This type of insurance can often include a large amount of legal costs and disbursements for a relatively small fee, such as:

• Solicitors costs and disbursements
• Courts fees
• Expert witness fees, if applicable
• Costs to the opposing party, if applicable

It is important to note the list above shows a few common examples that can be covered, please read the insurance policy carefully as it will list exactly what event it can cover.

Next steps

If the insurance company agrees with the appointed solicitor, they would be required to:

• Deliver a detailed summary of the nature of the case.
• Confirmation of the solicitor work required.
• The appointed solicitors rate.
• An evaluation on the cases reasonable prospects of success.

If you do not have BTE insurance, it is possible to pursue alternative funding in the form of After the Event Insurance (‘ATE’). ATE insurance will cover legal costs for a dispute to the opposing side, such as, litigation or court costs, when unsuccessful.

Contact us for more information on 0161 980 6099 or email us at [email protected]