Which statement correctly describes after the event (ATE) insurance in relation to CFAs?

Which statement correctly describes after the event (ATE) insurance in relation to CFAs?

• A. It replaces the CFA entirely
• B. It is taken out alongside the CFA to cover non-recoverable disbursements
• C. It is only used in criminal cases
• D. It guarantees recovery of damages

Answer: (B)

After-the-event (ATE) insurance is a risk-management tool used in civil cases funded by a Conditional Fee Arrangement. It is arranged in addition to the CFA, not as a replacement. Its main purpose is to cover costs and disbursements that might not be recoverable from the other side if things don’t go as hoped, and to protect the client from having to pay adverse costs if the case is unsuccessful. It does not guarantee that damages will be recovered, and it is not limited to criminal cases.

After-the-event (ATE) insurance is a risk-management tool used in civil cases funded by a Conditional Fee Arrangement. It is arranged in addition to the CFA, not as a replacement. Its main purpose is to cover costs and disbursements that might not be recoverable from the other side if things don’t go as hoped, and to protect the client from having to pay adverse costs if the case is unsuccessful. It does not guarantee that damages will be recovered, and it is not limited to criminal cases.