Manolete launches M-ATE: the low cost ATE Alternative for IPs and Insolvency Solicitors

After the Event Adverse Cost Insurance (“ATE”) is a vital product for IP’s (having personal liability) conducting insolvency litigation. But the costs and operation of ATE have long been concerns for all of us operating in the hazardous world of Insolvency Litigation. Manolete Partners is the UKs largest, specialist Insolvency Litigation Financing company. We are pleased to announce the launch of the Manolete ATE alternative: “M-ATE”.

IPs and insolvency lawyers’ have a number of concerns and complaints about traditional insolvency litigation ATE cover:

1.    It is far too expensive: premiums are typically 50-110% of the cover. Brokers’ commissions are “hidden” within these excessive premiums
2.    Insurers avoid paying when the policy is called upon: this is an increasing problem for IPs and solicitors. We have seen a number of law firms become insolvent as a result and a number of IPs have been personally seriously financially impacted.
3.    It takes too long to arrange: often taking three months or more
4.    Constant updates to the insurer via the broker: if you don’t do this, then see 2 above
5.    The ATE premium takes the top slice of returns: if the recovery is small, then the ATE insurer and broker get paid – lawyers, IPs and funders get zero return for all their hard work

We have therefore launched our own in-house insolvency litigation ATE Alternative to support our funded cases: M-ATE

Simple and Fair: the Manolete ATE Alternative (“M-ATE”) works as follows:

1.    We agree the level of cover the IP requires
2.    Manolete simply lodges that cash with your solicitor
3.    Should you ever be presented with an adverse cost order – you simply withdraw the cash from your solicitor’s client account

The cost: a simple premium calculated as 30% of the adverse cost cover you require. The premium is fully deferred – it doesn’t get paid until, and only if, you win. If you lose you never pay it – that is solely our risk.

Whether the case takes 1 year or 5 years to complete – the 30% is a fixed deferred premium.

For example:

1.    £1m wrongful trading claim
2.    You agree M-ATE cover for £300k
3.    Manolete transfers cash of £300k to your solicitors
4.    Case settles 36 months later for £700k
5.    M-ATE premium of £90k paid to Manolete (30% of £300k)
6.    Your net recovery on the case is therefore £610k

If you lose – you simply take the M-ATE £300k from your solicitor’s account to pay your adverse costs. Obviously, no premium payable to Manolete.

What about complaints 2 – 5 above?

2. Insurers avoid paying out: using M-ATE this cannot happen. First, the ATE funds, in cash, are held by your own solicitor – your risk is fully backed by our cash, not a complicated insurance policy containing a myriad of “exclusions”. Secondly, we will have been intimately involved with the case with you from the start. Thirdly, as you all know from working with Manolete, if we commit to a funding package – we give you exactly that – our full commitment. With 115 cases in our portfolio (making us the largest funder in the Northern Hemisphere) we can take a “portfolio view” – we expect to lose our fair share of cases. No quibbles. No small print. No investigations into what you did or did not tell us as the case progressed.

3. It takes too long to arrange: Manolete commits to a maximum two week decision time. Though, in fact, most of our investment decisions are made within just a few days.

4. Constant updates to the insurer via the broker: No need. We are involved throughout. There are no additional parties to consult.

5. The ATE premium takes the top slice of returns: This becomes a minor issue. First, the cost of the premium is a fraction of traditional ATE. Second – Manolete’s main return comes from its funding. Our share of the return comes after all costs: after ATE premium, after paying your lawyers, after paying your investigation costs, after paying Court Fees, after paying counsel, after paying experts etc. Only then does Manolete (as funder) make any return. This aligns us perfectly with the creditors. As it is only after all these costs (which are fully funded by Manolete) that the insolvent estate make a return.

For further information please contact:

Steven Cooklin ACA ACSI CF Tel: 01494 618520
Chief Executive Mob: 07900 985559
Manolete Partners PLC
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