23es

High Court declines to order security for costs on basis that insolvent Claimant held adequate ATE insurance

Snowden J today handed down judgment on PricewaterhouseCoopers’ application for security for costs in Premier Motor Auctions Limited v PricewaterhouseCoopers (2016) EWHC (Ch). The Claimants are insolvent companies in liquidation but had policies of ATE insurance. The court held that the same meant that the relevant condition for security for costs, namely that it be likely that a costs order would go unpaid, did not arise because the same would be covered by the insurance. The court held that a Quistclose trust would arise over the proceeds of the insurance policy so that it would go to the Defendants rather than the general body of creditors.

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