Dunn Motor Traction Ltd v National Express Ltd [2017] EWHC 228 (Comm) (15 February 2017)

Dunn Motor Traction Ltd v National Express Ltd [2017] EWHC 228 (Comm) (15 February 2017)

An indemnity from the sole shareholder of a claimant company is not a reliable source of litigation funding and does not displace the threshold for ordering security for costs where there is reason to believe the claimant will be unable to pay the defendant's costs if ordered to do so. It is just to order security in this case.

Citation
[2017] EWHC 228 (Comm)
Parties
Claimant/respondent: Dunn Motor Traction Limited; Defendant/applicant: National Express Limited
Jurisdiction
England and Wales
Judgment Date
15 February 2017
Procedural Posture
Commercial Court Application / Application for Security for Costs Prior to Trial
Outcome
Application granted
Legal Topics
Security for Costs, Company Insolvency, Indemnity by Shareholder, ATE Insurance, Access to Justice
Civil Procedure Commercial Law Security for Costs Company Insolvency Indemnity by Shareholder ATE Insurance Access to Justice

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Parties

Dunn Motor Traction Limited

Claimant/respondent

National Express Limited

Defendant/applicant

Procedural Posture

Commercial Court Application / Application for Security for Costs Prior to Trial

Legal Issues

  1. 1 Whether the claimant is unable to pay the defendant's costs if ordered to do so
  2. 2 Whether an indemnity from the sole shareholder is equivalent to ATE insurance for security for costs purposes
  3. 3 Whether it is just to order security for costs in the circumstances

Ratio Decidendi

An indemnity from the sole shareholder of a claimant company is not a reliable source of litigation funding and does not displace the threshold for ordering security for costs where there is reason to believe the claimant will be unable to pay the defendant's costs if ordered to do so. It is just to order security in this case.

Court Disposition

Application granted

Orders

  • Claimant to provide security for costs in the sum of £975,000, staged as £487,500 within 4 weeks and £487,500 within 4 months.