Dunn Motor Traction Ltd v National Express Ltd

Dunn Motor Traction Ltd v National Express Ltd

An indemnity from the sole shareholder is not a reliable source of litigation funding and does not defeat the threshold for security for costs; the Claimant is unlikely to be able to pay the Defendant’s costs when they fall due, so security is justly ordered.

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
Outcome
Application for security for costs granted.
Legal Topics
Security for Costs, Repudiation of Contract, Indemnity, ATE Insurance
Civil Procedure Contract Law Security for Costs Repudiation of Contract Indemnity ATE Insurance

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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

Legal Issues

  1. 1 Whether the Claimant will be able to pay the Defendant’s costs if ordered to do so
  2. 2 Whether an indemnity from the sole shareholder is a reliable source of litigation funding
  3. 3 Whether it is just to order security for costs

Ratio Decidendi

An indemnity from the sole shareholder is not a reliable source of litigation funding and does not defeat the threshold for security for costs; the Claimant is unlikely to be able to pay the Defendant’s costs when they fall due, so security is justly ordered.

Court Disposition

Application for security for costs granted.

Orders

  • Claimant to provide £487,500 within 4 weeks.
  • Claimant to provide a further £487,500 within 4 months.