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Court of Appeal allows appeal of refusal to grant order for security for costs where an ATE (after the event) insurance policy failed to raise a sufficient inference of an ability to discharge the defendant’s costs, finding that: 1) there was insufficient evidence before the High Court to demonstrate the existence of an effective ATE insurance policy; and 2) the policy did not provide a sufficient security to the defendant to warrant refusal of an order for security for costs since it is voidable for many reasons which are outside the control, responsibility or, by times, knowledge of the defendant.
Practice and procedure – effect of the existence of a policy of “after the event” (ATE) insurance on an application for security for costs – s. 390 of the Companies Act 1963 – appeal of refusal to order security for costs – whether the plaintiff’s ATE insurance sufficiently mitigated the risk that the plaintiff would be unable to discharge the defendants costs – whether the trial judge was wrong to conclude that a prima facie defence had been demonstrated – whether the existence of the policy had an effect on plaintiff’s insolvency and inability to pay the defendant’s costs – failure to put before the court the no-win no-fee agreement which is a condition precedent to the policy being in effect at all – s. 8 of the Solicitors (Amendment) Act 1994 – appeal allowed.
Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.
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