Harlequin Property (SVG) Ltd & Anor v Wilkins Kennedy (a firm)

Harlequin Property (SVG) Ltd & Anor v Wilkins Kennedy (a firm)

The ATE insurance policy, as currently drafted and endorsed, does not provide adequate security for costs due to the realistic risk that, in the event of the claimants' insolvency in SVG, the defendant would not have enforceable rights to recover under the policy, especially given the exclusion of the Contracts (Rights of Third Parties) Act 1999.

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 / Ruling on Form of Security for Costs
Outcome
Application for security for costs granted; current ATE policy insufficient as security due to insolvency risk.
Legal Topics
Security for Costs, ATE Insurance, Third Party Rights, Insolvency
Civil Procedure Insurance Law Security for Costs ATE Insurance Third Party Rights Insolvency

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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 / Ruling on Form of Security for Costs

Legal Issues

  1. 1 Whether an ATE insurance policy provides adequate security for costs in the circumstances of this case
  2. 2 Whether the risk of commutation or insolvency undermines the adequacy of the ATE policy as security

Ratio Decidendi

The ATE insurance policy, as currently drafted and endorsed, does not provide adequate security for costs due to the realistic risk that, in the event of the claimants' insolvency in SVG, the defendant would not have enforceable rights to recover under the policy, especially given the exclusion of the Contracts (Rights of Third Parties) Act 1999.

Court Disposition

Application for security for costs granted; current ATE policy insufficient as security due to insolvency risk.

Orders

  • Parties invited to resolve the outstanding issue by provision of a direct indemnity or suitable endorsement to ensure direct payment to the defendant without set-off.