A solicitor should not be subject to a non-party costs order for failing to obtain ATE insurance

The court’s jurisdiction to make a non-party costs order (NCPO) against a solicitor who had acted under a conditional fee agreement (CFA) without the benefit of after-the-event (ATE) insurance has been the subject of two Court of Appeal decisions in quick succession. The recent judgment in Heron and TNT (UK) Ltd v MTG will come as some relief to many solicitors who have not secured an ATE policy on their client’s behalf.

number of applications have found their way before the courts where the successful defendant to litigation has sought to obtain a non party costs order against the solicitor who acted for the unsuccessful claimant under a CFA. Where the claimant’s solicitors have failed to obtain ATE insurance to meet the defendant’s costs and where the losing claimant does not have the funds to do so, defendants have claimed that the claimant’s solicitors effectively “funded” or “controlled” the litigation. They have argued that this entitles the court to exercise its discretion under section 51 of the Senior Courts Act 1981 to make a NCPO in the defendant’s favour against the responsible solicitor…

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