On occasion, parties engaged in court proceedings will consider procedural tactics with the ultimate intention of exerting such pressure on their adversaries that their weakened position, or even inability to pursue the proceedings, will work to their advantage. Such a situation arose in (1) Deleclass Shipping Co. Ltd (2) MWI Shipping Services Ltd v Ingosstrakh Insurance Co. Ltd (2018) where the defendant's application for security for costs became very problematic for the claimants.

In the recent case of Reynard v Fox, the High Court struck out a claim brought by a litigant in person and cited the recent Supreme Court decision in Barton v Wright Hassall.

The court rejected the claimant's submission that this would be unjust because as a litigant in person, he did not have a detailed knowledge of the insolvency regulations. It ruled that the relevant regulations were not hard to find, difficult to understand or ambiguous.

Background

As the nights drew in, the end of 2017 saw a flurry of case law on security for costs, and particularly its interaction with after the event (ATE) insurance and litigation funding. This article considers what insights can be gleaned for litigants who do not want to be left out in the cold.

Premier Motorauctions: security for costs and ATE

Key Points

• Insurers had no priority rights to collect premiums over the proceeds of a successful action they had insured, as a result of a drafting error.

• The High Court affirmed the general rule that, where a party has contracted for an unsecured right only, the court will not elevate it to a secured status.

The Facts 

Associate Martin Cox considers the recent High Court decision of Peel Port Shareholder Finance Company Ltd v Dornoch Ltd, in which the court declined to exercise its discretion under the Civil Procedure Rules (“CPRs”) to order the pre-action disclosure of an insurance policy held by a solvent insured. The article considers the extent to which the outcome in this case is consistent with the overriding objective that courts dispose of cases justly and at proportionate cost.

Case Alert - [2018] EWHC 95 (Comm)

Court considers whether deed of indemnity from insurer is adequate security for costs

A great deal of insolvency litigation is funded by non-parties to a claim – for example, by a creditor or an “after the event” (ATE) insurer. Ordinarily such arrangements and their precise terms are confidential and are not required to be fully disclosed to a counterparty in litigation. In the recent case of Re Hellas Telecommunications (Luxembourg) [2017] EWHC 3465 (ch) (“Hellas”), the court considered the extent to which the underlying details of the litigation funders should be disclosed for the purposes of a security for costs application.

Summary: This Expert Insight looks at the case of Ziggurat (Claremont Place) v HCC International Insurance Company PLC [2017] and considers the implications of the case for the surety industry generally, particularly in the context of construction insolvency.

This article was first published for Thomson Reuters' Practical Law Dispute Resolution Blog.

The Court of Appeal overturns the High Court decision concerning an ATE insurance policy lacking anti-avoidance provisions as adequate security for costs.