It is a strange concept but normal practice in the After the Event (ATE) Insurance world.
Payment of our ATE Premium is 'deferred' until the end of the case - which means when the client receives their financial reward or benefit. There is no loan put in place in the meantime i.e. the ATE premim is not borrowed - it just only becomes payable at the end of the client's Employment Tribunal Claim.
This is a major benefit of our insurance - the client can obtain the protection of the policy from the beginning of their Employment Tribunal claim but only pay for it at the end. This could be some time later, maybe up to a year!
What is more, the Insurance Premium is only payable if the claim is successful, which means a financial or other benefit accruing e.g. reinstatement. If the Employment Claim is lost or abandoned without benefit to the client, maybe due to poor prospects, then the ATE premium never has to be paid by the client or the solicitor. Instead, the policy can be cancelled (if no disbursements need to be claimed) or the ATE premium forms part of the claim for disbursements i.e. it is a loss which is recovered alongside perhaps the Issue or Tribunal Hearing Fee.
Simple isn't it - and clever. Why would a client choose not to protect themselves?