Security for costs orders can frustrate the pursuit of even the most meritorious commercial disputes as well-resourced opponents seek to deter claims by insisting on security that can tie up the claimant’s capital.
The extent to which litigation insurance policies are accepted by national courts and arbitral tribunals as adequate security for costs around the world is constantly evolving. However, recent court decisions in jurisdictions like England & Wales and Australia are demonstrating a trend towards an acceptance by the courts of insurance policies. Provided the policy is supported by reputable insurers, ATE insurance should be presumed to be adequate security in the absence of specific reasons that present a higher than normal risk of a claim for adverse costs not being met.
A Thomas Miller Company
