||All England Reporter
|| All ER (D) 154 (Oct)
|| EWHC 2610 (Ch)
||Hugh Sims QC and Jay Jagasia (instructed by Hausfeld & Co LLP) for the companies.
||Henry King (instructed by DLA Piper UK LLP) for PwC.
||Adam Zellick (instructed by CMS Cameron McKenna LLP) for the bank.
||24 October 2016
Costs - Security for costs - Company - After the event (ATE) insurance - Claimant companies, acting by joint liquidators, bringing claim against first defendant firm and second defendant bank, alleging breach of various duties and conspiracy to cause claimants loss by unlawful means - Defendants applying for security for costs - Claimants obtaining ATE insurance policies - Whether ATE policies amounting to adequate security - Appropriate question to be asked when applying threshold jurisdictional test for ordering security for costs in respect of insolvent companies - Whether jurisdiction to grant security for costs - Whether application for security for costs should be granted - CPR 25.13.
Costs Security for costs. The Chancery Division, in dismissing the defendants' application for security of costs in respect of proceedings brought by the claimant insolvent companies, held that where there was an ATE policy in place, the question, under CPR 25.13, was simply whether there was reason to believe that the insurer would not pay under the policy when called upon to do so. In the present case, the claimants had obtained ATE insurance policies and the defendants had failed to satisfy the court that there was reason to believe that they would be unable to pay the defendants' costs already incurred and of the initial stages of the proceedings if ordered to do so. Accordingly, the jurisdictional threshold under CPR 25.13 had not been crossed.
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