Security For Costs - Premier Motorauctions V PWC LLP (Court Of Appeal)

Court of Appeal orders security for costs where ATE insurance policy did not contain an anti-avoidance provision

The defendants applied for a security for costs order on the basis that the claimant is a company and there "is reason to believe that it will be unable to pay the defendant's costs if ordered to do so" (CPR r25.13(2)(c)). The defendants had acted for the claimants before the claimants were placed into administration (and subsequently compulsory liquidation). After the claim form was issued, the claimant took out ATE insurance cover. The issue in this case was whether the security for costs order should be made in light of the ATE insurance cover.

At first instance, the judge held that the existence of an ATE policy should be taken into...