Harlequin Property (SVG) Ltd & Anor v Wilkins Kennedy (a firm) [2015] EWHC 1122 (TCC) (29 April 2015)

Harlequin Property (SVG) Ltd & Anor v Wilkins Kennedy (a firm) [2015] EWHC 1122 (TCC) (29 April 2015)

The ATE insurance policy, as currently drafted and endorsed, does not provide adequate security for costs to the defendant because there is a real and realistic risk that, in the event of the claimants' insolvency in St Vincent and the Grenadines, the defendant would not be able to recover under the policy due to the exclusion of third party rights and the absence of applicable statutory protection.

Citation
[2015] EWHC 1122 (TCC)
Parties
Claimant/respondent: Harlequin Property (SVG) Limited; Claimant/respondent: Harlequin Hotels and Resorts Limited; Defendant/applicant: Wilkins Kennedy (a Firm)
Jurisdiction
England and Wales
Judgment Date
29 April 2015
Procedural Posture
Application for Security for Costs / Interlocutory Application Ruling
Outcome
Application for security for costs: ATE policy in current form rejected as adequate security; further steps invited to resolve outstanding issue.
Legal Topics
Security for Costs, ATE Insurance, Third Party Rights, Insolvency, Contracts (rights of Third Parties) Act 1999
Civil Procedure Insurance Law Security for Costs ATE Insurance Third Party Rights Insolvency Contracts (rights of Third Parties) Act 1999

Case Brief

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Parties

Harlequin Property (SVG) Limited

Claimant/respondent

Harlequin Hotels and Resorts Limited

Claimant/respondent

Wilkins Kennedy (a Firm)

Defendant/applicant

Procedural Posture

Application for Security for Costs / Interlocutory Application Ruling

Legal Issues

  1. 1 Whether the ATE insurance policy provides adequate security for costs for the defendant
  2. 2 Whether the risk of commutation or insolvency undermines the adequacy of the ATE policy as security
  3. 3 Whether exclusion of third party rights under the Contracts (Rights of Third Parties) Act 1999 affects the defendant's protection

Ratio Decidendi

The ATE insurance policy, as currently drafted and endorsed, does not provide adequate security for costs to the defendant because there is a real and realistic risk that, in the event of the claimants' insolvency in St Vincent and the Grenadines, the defendant would not be able to recover under the policy due to the exclusion of third party rights and the absence of applicable statutory protection.

Court Disposition

Application for security for costs: ATE policy in current form rejected as adequate security; further steps invited to resolve outstanding issue.

Orders

  • The ATE insurance policy as currently drafted does not provide adequate security for costs.
  • Parties invited to address the outstanding issue by further endorsement or direct indemnity.