ATE policy insufficient security for costs due to drafting deficiencies (Lloyds v Accor)
Dispute Resolution analysis: The case concerns the defendant’s (‘Accor’) application for further security for costs from the claimant (‘Lloyds’); who was in administration. The primary issues concerned whether the claimant’s ATE policy was sufficient to replace a payment into court; the adequacy of the policy; and finally, the amount of security to be paid. It was found that there were deficiencies in the drafting of the policy and the Anti-Avoidance Endorsement (‘AAE’) rendering the ATE policy insufficient to replace a payment into court. However, these could be rectified; and indeed, could have been rectified previously, if the defendant had engaged with the claimant at an earlier stage. In light of Accor’s failure to engage constructively in advance of the hearing, the claimant was granted 10 days to refine the policy and address the deficiencies. Providing that the policy then met the judge’s concerns, it would be sufficient to meet the further security ordered, of £882,336. Written by Lucy Hodgkins, senior associate Costs Lawyer at Paragon Costs Solutions.
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