Infinity Distribution Ltd v The Khan Partnership LLP [2021] EWCA Civ 565 (20 April 2021)

Infinity Distribution Ltd v The Khan Partnership LLP [2021] EWCA Civ 565 (20 April 2021)

The potential recoverability of a substantial ATE insurance premium from the defendant is a relevant and material consideration when determining the form of security for costs. Where security by deed of indemnity would expose the defendant to a significant additional cost if it loses, and there is no evidence that payment into court would stifle or unduly prejudice the claimant, security should be ordered by payment into court.

Citation
[2021] EWCA Civ 565
Parties
Claimant and Respondent: Infinity Distribution Ltd (in administration); Defendant and Appellant: The Khan Partnership LLP
Jurisdiction
England and Wales
Judgment Date
20 April 2021
Procedural Posture
Civil Appeal / Second Appeal From High Court to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Security for Costs, After the Event (ate) Insurance, Recoverability of Insurance Premiums, Discretion in Form of Security, Access to Justice for Insolvent Companies
Civil Procedure Insolvency Costs Security for Costs After the Event (ate) Insurance Recoverability of Insurance Premiums Discretion in Form of Security Access to Justice for Insolvent Companies

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Parties

Infinity Distribution Ltd (in administration)

Claimant and Respondent

The Khan Partnership LLP

Defendant and Appellant

Procedural Posture

Civil Appeal / Second Appeal From High Court to Court of Appeal

Legal Issues

  1. 1 Whether the potential recoverability of a substantial ATE insurance premium from the defendant is a relevant consideration when determining the form of security for costs to be ordered.
  2. 2 Whether security for costs should be provided by deed of indemnity (with recoverable premium) or by payment into court.

Ratio Decidendi

The potential recoverability of a substantial ATE insurance premium from the defendant is a relevant and material consideration when determining the form of security for costs. Where security by deed of indemnity would expose the defendant to a significant additional cost if it loses, and there is no evidence that payment into court would stifle or unduly prejudice the claimant, security should be ordered by payment into court.

Court Disposition

Appeal allowed

Orders

  • Infinity Distribution Ltd to provide security for costs by payment into court rather than by deed of indemnity.
  • Parties invited to make submissions as to the time within which payment into court should be made.