Ireland: ATE Insurance Given The Amber Light By Court Of Appeal


In the most recent instalment in the case of Greenclean Waste Management Ltd v Leahy, the Court of Appeal, considering ATE insurance for the first time, overturned a High Court ruling that the insolvent plaintiff's after-the-event insurance ("ATE Insurance") could effectively substitute security for costs in this instance.

The Court of Appeal accepted that an ATE insurance policy could provide security for costs in principle. However, it did not accept that the policy in question provided sufficient security. In this case the Court's decision was clearly heavily influenced by the existence of a condition precedent to cover and the absence of any evidence to confirm that there had been compliance with the condition precedent.  The Court also considered the policy to be "highly conditional" and noted that the plaintiff had not responded to the defendant's detailed criticisms of the policy.

In a separate ruling, the High Court had confirmed that ATE insurance is valid and does not fall foul of the rules on maintenance and champerty.  While this ruling was not under appeal, the Court of Appeal made some useful observations regarding ATE insurance generally and the principles which apply:

  • An ATE policy can in principle provide security for costs;
  • However, an ATE policy can only provide as good a security as a payment into court or a bank bond or guarantee in very rare cases;
  • To be relied upon as security for costs, an ATE policy must actually provide some security, ie it must not contain terms which entitle the insurer to avoid liability to pay the defendant's costs;
  • If the ATE policy is not sufficient security, the amount of security fixed could potentially be reduced to take account of any realistic possibility that an ATE policy would cover the costs of the defendant.

Following this decision, it would appear that the way is clear for ATE insurance to be used as a legitimate method of third party funding in this jurisdiction, however, the extent to which it will be considered as an acceptable form of security for costs is less clear and will very much turn on the individual policy wording, which will be scrutinised by the Court, and the extent to which the policy is perceived to be conditional.

There is an opening in the market for the underwriters of ATE to write a policy aimed at the security for costs market and it is a very positive development that the law is now clear in terms of the legality of such a product.  Clearly, following this decision, it is desirable for ATE policies to be as certain as possible. However it is difficult to see how one might overcome the simple fact that an insurance policy cannot be enforced by a third party and further, it is difficult to envisage that an insurer might agree to eliminate the prospect of a repudiation for non-disclosure or declinature for breach of a condition precedent.

Finally, while there are similarities between Irish and English law, it is interesting to note the Court's comment that the policy in question was clearly modified for this jurisdiction.  This is a common practice in insurance but may not be appropriate for ATE insurance and greater consideration should be given to the terms and conditions of policies offered by ATE insurers in this jurisdiction.


This case involved an application for security for costs in a professional negligence action brought against a firm of solicitors by an insolvent company, Greenclean, which had recently entered voluntary liquidation.  Greenclean defended the application on the basis that it held ATE insurance and thus was in a position to discharge the Defendant's costs if unsuccessful.

In April 2013, the High Court delivered its judgment on security for costs (for further details, see " Can after-the-event insurance substitute security for costs?") The trial judge declined to make an order for security for costs after being furnished with a binding assurance from the ATE insurer that it would not subsequently repudiate cover by relying on a prospects of success clause (the "Prospects Clause") in the policy.1

The Defendant appealed to the Supreme Court. The Supreme Court adjourned the appeal and remitted the matter to the High Court in September 2014 for a determination as to the legality of ATE insurance in Irish law (for further details, see " After-the-event insurance passes champerty and maintenance test"). The High Court upheld the validity of ATE policies, expressly confirming that ATE insurance does not fall foul of the tort of maintenance or champerty.  With this point having been clarified, the case returned to the Court of Appeal2 for the final determination as to the effect of an ATE insurance policy on an application for security for costs.

Court of Appeal's Consideration of ATE Insurance

The Court of Appeal (Kelly J) accepted that, in the appropriate circumstances and as a matter of principle, an ATE policy could provide sufficient security for costs.  While the Court did not comment on the validity of ATE insurance, the decision seems to be premised on the basis that ATE insurance is not champertous (as previously held by the High Court) and the Court made some interesting general observations regarding ATE insurance.

The Court found that the proceeds of an ATE policy do not and will never form part of the assets of the company and consequently the trial judge was incorrect, in the context of the application for security for costs, to have regard to the existence of the policy in assessing the plaintiff company's ability to discharge costs although the Court of Appeal confirmed that the existence of the policy could be taken into consideration in the exercise of the court's discretion.

The Court noted that ATE insurance and conditional fee arrangements ("no win, no fee") had been introduced in England and Wales by the Access to Justice Act 1999 and, despite the absence of similar legislative measures in Ireland, ATE insurance had nonetheless "crept into this jurisdiction" but is still comparatively novel.

The Court was assisted by the conclusions of Akenhead J in the English case of Michael Philips Architects Limited v Riklin EWHC 834 (TCC), finding that they also apply in this jurisdiction:

  1. There is no reason in principle why an ATE insurance policy which covers the claimant's liability to pay the defendant's costs, subject to its terms, could not provide some or some element of security for the defendant's costs.
  2. It will be a rare case where the ATE insurance policy can provide as good a security as a payment into court or a bank bond or guarantee, because, amongst other reasons, insurance policies are voidable by insurers and the promise to pay under the policy will be to the claimant.
  3. In order for a policy to provide security, there must not be terms pursuant to which or circumstances in which the insurers can readily but legitimately and contractually avoid liability to cover the defendant's costs.
  4. There is no reason in principle why the amount fixed by a security for costs order could not be somewhat reduced to take into account any realistic probability that the ATE insurance would cover the costs of the defendant.

The ATE policy in question

The Court allowed the appeal, having concluded that there was insufficient evidence before the High Court to demonstrate the existence of an effective ATE policy in this instance.

The Court commented that an examination of the policy in question suggested it was originally written for the English market and had undergone minor modifications for use in this jurisdiction.

While the High Court had been concerned only with the Prospects Clause, the Court of Appeal considered that the most important and insurmountable issue was that the policy in question contained a condition precedent to cover requiring Greenclean to enter into a no-win no-fee agreement with its solicitor and no evidence of such an agreement had been put before the Court. The Court deemed the existence of this agreement, and its compliance with section 8 of the Solicitors (Amendment) Act 1994, to be a fundamental proof for establishing the effectiveness of the ATE policy.  As Greenclean was unable present a copy of this agreement to the Court, the policy did not constitute sufficient security. However, the Court observed that even if the condition precedent had been complied with, the policy was "highly conditional" and could be avoided for a substantial number of reasons outside the defendant's control and knowledge.

Consequently, the Court held that even with the Prospects Clause neutralised (ie, by virtue of the binding assurance given by the insurance company that it would not rely on same), the policy could not be relied on as sufficient security.  The Court concluded that the ATE policy in question fell "far short of providing as good a security as a payment into court or insurance bond".


1 The "prospects of success" clause allowed the insurer to decline cover if it agreed with the claimant's solicitor that it was "more likely than not" that the litigation would be unsuccessful.

2 The Court of Appeal having taken over from the Supreme Court as the appropriate appellate court in the interim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions