Timing Matters: Security for Costs and the Lessons from Harrington & Charles Trading
Security for costs applications remain a familiar risk for claimants—and a key area where funders and insurers often step in. A recent England & Wales case highlights that, beyond having coverage, the timing and sequencing of security arrangements can have significant cost implications.
In Harrington & Charles Trading [i], the court was asked to determine who was the “successful party” in a security for costs application where the claimants, although covered by an ATE policy from the outset, only increased cover and arranged additional endorsements (sufficient to satisfy security) between the application being issued and its hearing.
The claimants argued that the defendants had applied prematurely, as the parties were still negotiating appropriate endorsements. The defendants contended that issuing the application ultimately secured satisfactory security. The court disagreed with both sides, ordering no costs—meaning each party bore its own—rather than engaging in a hypothetical debate about what might have happened had the application proceeded. The ruling demonstrates that it is rarely appropriate for a court to decide on the underlying merits when a security application is compromised by the parties.
The practical takeaway is clear: claimants who anticipate a security application should act early to secure appropriate coverage, rather than waiting until pressured by an application. An ATE policy with AAEs negotiated and included from inception is generally more economical than arranging endorsements later. TheJudge is experienced in structuring both ATE and enhanced policies with AAEs and can assist claimants proactively.
At TheJudge, we broker a range of specialist legal risk covers to help law firms and their clients manage the financial uncertainty of litigation. Claimants in commercial litigation can face serious barriers when well-funded opponents seek security for costs—often to deter or delay the claim. These orders can tie up a claimant’s capital and threaten the progression of even strong cases.
At TheJudge, we broker ATE policies that have a proven track record of being accepted for the purpose of meeting security for costs orders—including in many of the leading legal precedents. However, where a standard policy alone might not satisfy the court or tribunal, we can offer enhanced solutions such as deeds of indemnity and policies with additional wording designed to strengthen their use as security for costs. This includes limiting the insurer’s ability to avoid the policy through Anti-Avoidance Endorsements (AAEs). AAEs aim to reassure the court that a policy will respond to an adverse costs order. Their effectiveness depends on the specific wording, but they typically increase the likelihood that an ATE policy will be accepted as security for costs.
For further reading on ATE insurance and security for costs:
[i]Harrington & Charles Trading Company Ltd & Ors v Mehta & Ors
High Court (Chancery Division), 19 February 2026.