The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:
Brexit: The UK's departure from the EU on exit day, ie Friday 31 January 2020, has implications for practitioners considering security for costs. For guidance, see: Cross border considerations—checklist—Brexit—impact on CPR.
This Practice Note considers the use of After the Event insurance (ATE insurance) as security for costs. It is one of a suite of Practice Notes considering issues relating to security for costs under CPR 25. The other Practice Notes are:
Security for costs—what is it, its use and the court's discretion
Security for costs—requirements and conditions (CPR 25.13)
Security for costs—making an application
Security for costs—counterclaims and set offs
Security for costs—additional security
Security for costs—level of security
Security for costs—after an order is made
Security for costs—payment into and out of court
Security for costs—equivalent orders
There are also other CPR provisions which provide for orders which are equivalent to a security for costs order. For more information, see Practice Note: Security for costs—equivalent orders.
A claimant can take out ATE insurance to cover the legal costs payable to the defendant in the event that the claimant’s claim is unsuccessful. The question is whether such insurance can be used as security for costs. As stated by Longmore LJ in Belco Trading v Kondo, it is most unlikely that any standard form of ATE insurance could provide
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