After The Event Insurance: A Relevant Consideration For Settlement Offers And Costs

Adverse cost or "after the event" ("ATE") insurance is a relatively new coverage which is quickly gaining popularity among Plaintiffs in Canada. ATE insurance is an insurance policy which is purchased after a dispute arises and covers costs and disbursements. Depending on the policy, ATE insurance will cover the Plaintiff's own costs and disbursements, as well as any costs awarded against the Plaintiff if they are unsuccessful at trial.

In the past few years, courts have considered ATE insurance in various capacities, including whether it is appropriate to order security for costs, whether the ATE insurance premium is properly recovered as a disbursement, and whether the ATE policy needs to be disclosed and/or produced. Recently, the BC Supreme Court considered whether ATE insurance is a relevant factor to consider in making a cost award against a successful party, pursuant to Rule 14-1.