Can "After The Event" Insurance Be A Substitute For Security For Costs?

In the recent case of Greenclean Waste Management Limited v Maurice Leahy & Co. Solicitors, the High Court had its first opportunity to consider whether "after the event" ("ATE") insurance policies could effectively be a substitute for security for costs.  Judge Hogan concluded that the policy before the Court could only provide adequate security to a defendant in circumstances where the plaintiff's insurer gave an assurance that it would not rely on a "prospect of success" clause to deny cover. 

As companies struggle to remain solvent during the economic downturn, security for costs is increasingly sought before the Irish courts.  Security for costs can be an effective tool for a defendant who is being sued by an insolvent plaintiff where the defendant believes that the case against it is without merit and there is a risk the plaintiff will not be in a position to pay the defendant's costs in the event that the litigation is unsuccessful.  In such cases, the Court