Cleon Catsambis succeeds in obtaining security for costs order despite ATE Policy with Anti-Avoidance Endorsement

Cleon Catsambis instructed by Mishcon de Reya LLP, was successful in obtaining an order for security for costs against litigation funder Asertis, notwithstanding the existence of an ‘After The Event’ (ATE) insurance policy supplemented by an ‘Anti-Avoidance Endorsement’ (AAE).

By judgment handed down on 24 September 2024 (Asertis Ltd v Lewis Bloch [2024] EWHC 2393 (Ch)), ICC Judge Mullen held that there was “reason to believe that Asertis will not be able to meet an adverse costs order” and that “the ATE Policy cannot be regarded as providing sufficient protection to [the Defendant], even on the basis that the AAE applies”.

In particular, the Judge noted (at [32]) the following deficiencies in the ATE policy:

• it offered no protection in respect of costs incurred before the policy was taken out;
• it was insufficient in amount to meet the Defendant’s budgeted costs;
• the Defendant had no means of enforcing the policy directly;
• the insurer’s liability to pay was contingent on a number of conditions, which the Defendant had no means of policing compliance with;
• there was no mechanism in place for the Defendant to be informed if the policy ended; and
• in the event of termination, it was unclear whether the insurer remained liable to pay the Defendant’s costs up to that point.

This decision is of broader interest because it demonstrates the Court’s willingness to consider the precise terms of an ATE policy in determining  whether it provides sufficient protection.

Click here to read the full judgment.