It has long been the view that ATE was adequate security for costs. Lord Justice Longmore comments that there "may be a tendency" for judges at first instance to accept that an ATE policy can stand as security for costs.
Whilst this approach would need to turn on the specific contractual terms of the ATE policy, it would be unusual to find an ATE insurance policy which does not include the right for the ATE insurer to void the policy.
If this is the case (which I believe it is), then in reality it is now no longer acceptable to rely upon ATE insurance as being sufficient security for costs.
After-the-event insurance which can be voided does not constitute adequate security for costs, the Court of Appeal has ruled. Overturning the decision of Mr Justice Snowden, Lord Justice Longmore said the case raised “important questions of principle” because the original decision showed “there may be a tendency (I put it no higher) for judges at first instance to accept that an ATE policy can stand as security for costs.