Security for costs at the UPC after Syntorr v Arthrex
On 18 February 2026, the UPC Court of Appeal set aside two security for costs orders, each for €2m, in Syntorr v Arthrex. The Court found that the claimant had already put in place litigation insurance (ATE) with a robust anti‑avoidance endorsement (AAE). The Court ruled that, assessed properly, the ATE+AAE eliminated any “legitimate and real concern” about costs recovery or enforcement, so no security was necessary. Importantly, the Court treated the insurance as part of the claimant’s “financial position” under Art. 69(4) UPCA / Rule 158.1 RoP - the threshold question of whether security is needed at all.
In a line of previous appeals (for example, Audi v NST and Chint v JingAo), the Court of Appeal has clarified that the touchstones are recoverability and (non)burdensome enforcement, not mechanically requiring cash deposits or bank guarantees. Those applying for security for costs must first show a credible risk; if they do, the claimant must dispel it with substantive evidence. Syntorr establishes that is a legal test an ATE+AAE can satisfy - if it is drafted and evidenced correctly.
What worked in Syntorr: the ATE/AAE features the Court relied on
From a claimant’s perspective, Syntorr provided a blueprint of what ATE/AAE arrangements need to provide in order to have a meaningful impact on the consideration of the claimant’s “financial position”. The Court highlighted that the ATE/AAE package:
Neutralised avoidance and cancellation for the opponents’ costs: the AAE made the policy non‑voidable and non‑cancellable as regards the defendants’ adverse costs “irrespective of exclusions or general law” – thus removing potential concerns about the conditional nature of a typical insurance policy.
Granted direct rights to the opponents (third‑party beneficiaries), so they could claim directly without being exposed to the insured’s insolvency risk.
Specified a simple payment trigger: binding costs order/settled figure + bank details + verification call; the Court labelled this “straightforward”, rejecting the idea that payment would be burdensome.
Controlled termination risk with a 60‑day moratorium and explicit cover for all costs incurred before termination takes effect - and clarified that the timing relates to incurrence, not when a costs order is later drawn up.
Came from an EU‑authorised carrier (Solvency II regulated); the Court found solvency objections unsupported on the evidence.
The Court didn’t need to decide whether insurance can be ordered as a form of security under Rule 158.1 RoP (which lists deposit or EU bank guarantee), because the specific ATE+AAE made any security order unnecessary.
Why Syntorr matters moving forwards: preserving access to justice
The decisions demonstrate an important course‑correction that keeps the UPC open to well‑founded claims without forcing litigants to deposit large sums of cash in court or chase scarce EU bank guarantees.
That preserves access to justice for capital‑constrained innovators and SMEs, and it does so within the framework of Art. 69(4) UPCA / Rule 158.1 RoP: defendants remain protected if genuine risk persists, but claimants who demonstrably remove that risk - through the right ATE/AAE architecture - need not divert working capital or derail a case at the security for costs threshold.
What are the practical implications of Syntorr for claimants?
After Syntorr, a claimant can present a cost‑effective, court‑credible alternative to deposits and bank guarantees (and avoid the additional friction that may result from a non-EU‑licensed insurance or bank guarantee). This reduces reliance on expensive cash escrows or hard‑to‑access facilities - costs that third‑party litigation funders may be unwilling to immobilise, or that many claimants simply cannot carry. In parallel, decisions such as AorticLab v Emboline underscore that the security regime exists to protect defendants, not to choke off defences or claims - reinforcing the need for a balanced approach that Syntorr now exemplifies in practice.
For claimants, the message is clear: invest early in the right ATE/AAE structure, placed and negotiated by specialists who understand UPC expectations, and you can preserve runway for the litigation itself, rather than for collateral mechanics.
What is the view of those involved?
The ATE insurance and anti-avoidance endorsement (AAE) placement was handled by TheJudge, a global leader in bespoke litigation risk covers for law firms and their clients. The team was led by Robert Warner, a Director in the London office, and Tomas Schmidt, a Director in the Hamburg office.
Robert Warner commented as follows; “TheJudge are delighted to have been able to assist Syntorr in structuring these complex insurance and security arrangements. This is a very important decision in preserving access to justice and it is clear to us that ATE insurance/AAEs are going to have a very important role in enabling claimants to proceed with UPC claims in a cost controlled manner.”
Syntorr were represented in the UPC proceedings by attorneys‐at‐law Hon.-Prof. Dr. Henrik Holzapfel and Dr. Laura Woll, LL.M., both McDermott Will & Schulte, Düsseldorf, Germany.
The ATE insurance policy was underwritten by International General Insurance Company (Europe) Ltd, part of International General Insurance Holdings Ltd. The team at IGI is made up of Joseph Mallia (Head of Underwriting, IGI Europe), Rob Horner (Underwriter, Legal Expenses) and Matt Lagden (Class Underwriter, Legal Expenses).
About TheJudge
TheJudge is a global specialist in arranging litigation insurance for commercial claimants worldwide. Founded in 2000 and a wholly owned subsidiary of the Thomas Miller Group, TheJudge has been ranked Band 1 by Chambers & Partners in its field for the past five consecutive years. We have offices in London, Hamburg, California and Toronto.