Kerry Underwood

ATE INSURANCE AND SECURITY FOR COSTS

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In Premier Motorauctions Ltd (in liquidation) (1) & Premier Motorauctions (2) v Pricewaterhousecoopers LLP & Lloyds Bank PLC (2) [2017] EWCA Civ 1872

the Court of Appeal considered the extent to which the existence of After the Event insurance is relevant when the court is considering an application for security for costs sought by the Defendants in a claim brought by an insolvent company in liquidation.

The Court of Appeal held that once a court is satisfied that a company is insolvent, then it has jurisdiction to order security for costs providing that ordering security does not stifle the claim, and in those circumstances it will normally be appropriate to order security for costs, whether or not there is After the Event insurance in place.

Nevertheless an appropriately framed ATE insurance policy “can in theory be an answer to an application for security.”

The Court of Appeal rejected the submissions on behalf of those seeking security to the effect that ATE insurance is not to be considered at all and said that it is necessary to consider whether the particular ATE insurance in any given case gives the Defendants sufficient protection.

On the facts of this case, the Court of Appeal held that the ATE policy did not give sufficient protection, and therefore ordered security for costs.

The judgment itself considers in detail the case law on the interplay between security for costs orders and ATE insurance, but holds that it will always be a fact sensitive issue, largely depending upon the terms of the particular ATE policy.

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Written by kerryunderwood

November 29, 2017 at 7:05 am

Posted in Uncategorized

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