On the 18th January 2013, the High Court overturned an earlier judgment that an ARAG ATE policy was not good enough security for costs.
The bespoke wording expressly stated that the policy would only be void should there be fraudulent non-disclosure (and not for innocent or negligent non-disclosure), and even if there was, the cancellation provisions expressly stated that ARAG would be liable for costs up to the date of cancellation, so minimising any risk to the defendants costs.
The case was not the type to have an adverse verdict at trial, as it centred on technical issues rather than contentious facts, and so there was no commercial reason why the claimant would wish to jeopardise the policy by not complying with its terms. Quite simply, the policy was for the claimant’s own protection.
This case clearly shows that defendants will use the ATE policy as a way of making life difficult for the claimant, but fortunately in this case, the claimant had an ARAG policy that provided the safeguard for the claimant should they lose, and likewise for the defendant.
Permission to appeal has not been granted as yet, and the claimant was awarded the costs of the application.