Risks of adverse cost protection

By Ian Hu ( June 23, 2016, 8:00 PM EDT) -- Adverse cost protection is a relatively new insurance or quasi-insurance product that can help lessen the financial blow of a lost case for both the client and lawyer. It may also be called adverse cost insurance, legal expense insurance, or after the event (ATE) insurance. While there is no standard contract or policy, the adverse cost provider will generally pay some amount of costs, fees and/or disbursements should the client’s case lose. The premium or cost of the contract may be paid as a percentage of the value of a resolved case, contingent on a successful resolution by way of a settlement or trial verdict. In other cases, a firm may pay a flat fee to obtain coverage for all its files....