UK-WIDE: An Introduction to Litigation Insurance Underwriters

Beyond the Courtroom: How Litigation Insurance is Reshaping Access to Justice in 2025

The litigation insurance market has continued to develop and mature in 2025, and today it is an integral part of how claimants access justice throughout the world. While it is neither as large nor as well-known as the litigation finance field – a roughly USD18 billion industry – litigation insurance is now one of the most important and effective legal finance products on the market.

What is litigation insurance and what trends are we seeing in the primary markets?

Litigation insurance takes many forms, including but not limited to capital protection insurance (CPI), judgment preservation insurance (JPI), adverse judgment insurance (AJI), and after-the-event (ATE) insurance. In each case, insurance allows policyholders to mitigate risk and better manage the financial burden of litigation. In some instances, it can also help judgment holders monetise their assets. Here, we focus on the two forms of insurance where we have seen the most changes and which we expect to continue to evolve during the coming year.

The United States is increasingly embracing CPI

In the United States, market dynamics are evolving. Both supply and demand are shifting away from single-risk, judgment preservation policies in favour of scalable, portfolio-based solutions across litigation and law firm finance. Policies for portfolios of litigation are used as collateral against which lenders can offer appealing financial structures to law firms pursuing contingency fee cases and/or which are in the process of refinancing their outstanding loans. This product is in high demand because it allows law firms to partner with different types of capital providers and lenders and obtain bespoke financing arrangements that are often more competitive than traditional litigation finance templates. We expect this product will continue to grow and mature in the coming year and beyond.

The UK ATE insurance market is seeing significant shifts

The UK ATE insurance market has likewise witnessed significant shifts in recent years – some evolutionary, others disruptive. The UK’s ATE landscape is no longer the relatively straightforward market it once was. Today, it is shaped by complex litigation funding dynamics, heightened regulatory scrutiny, and increasing cost pressures on both claimants and legal service providers. Against this backdrop, insurers and managing general agents (MGAs) are being called upon to demonstrate greater agility, innovation and resilience.

One of the most pronounced shifts has come from the gradual decline in low-value personal injury (PI) claims, once the bedrock of ATE insurance. The implementation of the Civil Liability Act and the Whiplash Reforms have significantly curtailed the volume of motor-related PI claims, prompting a market recalibration. Many insurers and MGAs are now writing more complex, higher-value litigation portfolios, involving commercial disputes, and group actions – where ATE plays a more strategic role in risk management and access to justice.

Of course, these changes come with new challenges. Underwriting high-value litigation demands greater legal insight and a more rigorous due diligence process. Case selection is more nuanced, and the financial exposure far greater. In other words, MGAs are not just insuring outcomes – they are partnering in the litigation journey. This means working more closely with solicitors, counsel and capital providers, not just to assess risks, but to align incentives and ensure realistic settlement expectations.

The integration between ATE and litigation funding has become particularly pronounced. Increasingly, funders see ATE as essential in safeguarding their investment, and insurers rely on funders’ capital and strategic involvement to improve case prospects. This symbiosis is driving a more professionalised, data-informed market, but it also raises questions about pricing transparency, conflicts of interest and the long-term sustainability of returns.

Another significant trend is the growing pressure on premium affordability and recoverability. Since the reforms carried out under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, ATE premiums in most cases are no longer recoverable from defendants, shifting the burden onto claimants. For insurers, this means walking a fine line between charging a risk-commensurate premium and maintaining access to justice. Innovative pricing models such as staged premiums or deferred/contingent payment terms are now essential tools in their offering, though they too carry inherent underwriting and cash flow risks.

Finally, regulatory and political uncertainty remains an unknown. From changes to fixed recoverable costs to evolving case law around proportionality and costs budgeting, insurers and MGAs operate in an environment where yesterday’s certainty may be tomorrow’s challenge. Adaptability is no longer optional – it is a core ingredient.

In sum, the UK ATE insurance market is maturing into a more specialised, relationship-driven ecosystem. The days of transactional, volume-based underwriting are fading. What is emerging is a market where insurers are valued not just for risk mitigation, but for insight, partnership, capacity and flexibility.

What next?

The types of insurance products discussed above will continue to mature in the coming months, as will growth into new markets across the globe. In particular, we expect to see industry expansion into wider territories in the coming year.

We also expect to see these products becoming more sophisticated and tailored as AI helps to improve underwriting and actuarial data.

Current climate and legislation

As evidenced above, the litigation insurance industry is becoming increasingly sophisticated and important. Now more than ever, ordinary citizens need access to justice and a more level playing field. This is because of what seems to be an increasingly hostile environment not just to litigation funding or litigation insurance, but to litigation itself. In the United Staes, even though the proposed Tillis Tax Bill was ultimately defeated in Congress this past July, opposition to the industry and fear of social inflation persist on a global level, much of it driven by entities with a vested interest in shutting down equal access to justice.

But litigation insurance (and finance) are important and even essential products, and big businesses, rogue governments and powerful interest groups should not be immune to lawsuits or being held accountable under the law. At bottom, litigation insurance helps to ensure that meritorious claims can be brought (and justice achieved) by individuals, inventors, small businesses and impecunious claimants by decreasing the overall cost of litigating disputes, shifting risk, and paving the path for (adequate and fair) settlements to be reached.