HARLEQUIN PROPERTY (SVG) LTD V WILKINS KENNEDY

[2015] EWHC 1122 (TCC), Queen's Bench Division, Technology and Construction Court, Mr Justice Coulson, 29 April 2015

Insurance (after the event) - Security for costs - Whether ATE policy was a substitute for security for costs order - Civil Procedure Rules 25.12 and 25.13

The defendant sought an order for security for costs in respect of a claim brought by the claimant, a company incorporated in St Vincent and the Grenadines, and it was agreed that the relevant amount should be £2.75 million. The claimant had an after the event insurance policy, and argued that the existence of that policy - which covered the claimant's liability for costs - was sufficient security and that no other order should be made. The court held that the policy provided adequate security in that it was not avoidable and that there was no realistic risk of the insurers and the claimant agreeing to commute the sums payable under the policy. However, the court was concerned with the effect of the claimant's possible insolvency, in that any sums payable under the policy would be payable to the claimant's insolvency practitioner in St Vincent and the Grenadines, and for that reason the policy did not provide a reason to refuse a grant of security.