Adverse Cost Insurance

Increasingly, contract dispute resolution clauses are incorporating fee shifting (adverse costs) provisions in the event of a dispute arising between the parties. Arbitrators are also increasingly awarding costs against the losing party in international arbitrations.

In addition to arranging Litigation Finance and/or Attorney Fees Insurance, our team specializes in the placements of Adverse Costs (Fee Shifting) Insurance. This covers the policyholder’s potential liability for the opponent’s fees and costs if the case is lost and a fee-shifting award is made against the plaintiff. This insurance provides a piece of mind and drastically alters the cost / benefit analysis when considering pursuing a meritorious claim.

Cover is purchased based on the estimated adverse cost exposure. A variety of options exist in terms of the premium payment, including fully deferred/contingent upon success premiums. This means the insurer only receives a premium if the case is successful. Under this premium model, if the case loses the insurer receives no premium and is liable to pay a claim up to the limit of cover.