In July 2014, the joint liquidators of a pair of car auction
companies commenced claims against their previous advisors and
secured lenders, claiming various breaches of duty and damages in
the region of £45 to £54 million. The defendants denied
the claims and, after they were served notice that ATE policies had been issued to the claimants,
applied to the court for security for costs on the basis that they
doubted that the terms of the ATE
policies were sufficient to cover combined estimated costs of
The court held that the key question was not whether ATE insurance provides the same security as
traditional forms of security, such as cash, but "whether,
having regard to the terms of the ATE
policy in question, the nature of the allegations in the case and
all other circumstances, there is reason to believe that the ATE policy will not respond so as to enable the
defendant's costs to be paid"
Here, despite the defendants' objections, the court was
satisfied that the relevant ATE policies
did not cross the jurisdictional threshold. The multi-tiered ATE policy provided for cover of £5
million, the majority of which was provided by a reputable insurer
with an established track record, and it was unlikely that the
joint liquidators would act in such a way as to invalidate the
In good news for officeholders, the court has confirmed that
ATE insurance can be sufficient security
for costs, on which insolvent claimants are relying more
frequently. While applications for security for costs in respect of
ATE insurance will be decided on a
case-by-case basis, officeholders will be assisted by the pragmatic
recognition that claimants have a strong incentive to ensure that
the terms of any ATE policy are adhered
to, and respond appropriately.
A court in the United Kingdom refused to remove an arbitrator for perceived bias where the arbitrator was appointed to arbitrate multiple disputes arising from the same underlying incident triggering insurance coverage.
Drone use is on the rise. Private individuals and commercial companies are finding new and varied applications for the technology, from Amazon's ‘flying warehouse' to Lady Gaga's drone-propelled American flag at the Superbowl.
Ben Crook and Neil Beresford are holding a Breakfast Briefing on Wednesday 26 April 2017 to highlight for insurers the issues arising and practical steps needed in advance of the introduction of a new right for insureds to claim damages...
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