Insurance solution
Arbitration Security for Costs
Security solutions structured for arbitral tribunals and institutional rules.
- A judgment or award won
- A judgment against you
- Funder capital deployed
- Law firm fees and WIP
- Security for costsThis cover
- The opponent's costs
- Disbursements
- Own legal costs
Illustrative. The exposures a dispute can put on a balance sheet. What a policy responds to is set by its wording.
What is Arbitration Security for Costs?
Arbitration Security for Costs is a form of litigation risk transfer that may be arranged around security ordered by a tribunal. Security solutions structured for arbitral tribunals and institutional rules. Terms, where available, are set case by case through underwriting.
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Schedule · specimen
Arbitration Security for Costs
Not a policy. A specimen to show how this cover is structured. Cover exists only when a policy is issued, on its own wording.
- Terms
- Terms, where available, are set case by case through underwriting.
- Protects
- Security ordered by a tribunal, depending on policy terms.
- Terms
- Limit, premium and conditions are set by underwriting on the specific risk.
Clause 1
The insured
Who it is for
Claimants in arbitration facing a request for security for costs, including funded claimants and claimants with limited assets.
Clause 2
Insuring clause
What risks can be protected
The respondent's costs that the tribunal might order the claimant to pay, where the tribunal requires security for them.
Clause 3
Operation of cover
How it works
Tribunals decide security under the arbitral rules and the law of the seat, weighing factors such as the claimant's ability to pay and the presence of a funder.
An ATE policy or bond may be offered as the form of security, with wording that responds to the tribunal's costs award.
Clause 4
Underwriting
Underwriting factors
The core assessment is the same as for Security for Costs Insurance: merits, quantum, a proportionate budget, recoverability and the legal team.
The points that weigh most for this cover are set out under "What risks can be protected" and "How it works" above.
Clause 5
Proposal documents
Information required
The standard presentation pack described on the Security for Costs Insurance page, plus the documents specific to this cover noted above.
Clause 6
Limit, premium and staging
Potential structure
Arbitration ATE with enhanced wording for the respondent's benefit, or a bond from an insurer; staged to follow the procedural timetable.
Clause 7
Alternatives
Alternatives
- (a)Cash deposit or escrow;
- (b)Bank guarantee; and
- (c)Funder undertaking.
Clause 8
Territory
Jurisdiction notes
Forum rules apply as described on the Security for Costs Insurance page; the jurisdiction guides linked below set out the position forum by forum.
Specimen for explanation only. Terms, limits and exclusions are set by underwriting on each matter and by the wording issued.
Frequently asked
Can an arbitral tribunal order security for costs?
Yes, under most institutional rules and many arbitration laws tribunals have power to order security. They weigh factors such as the claimant's ability to pay an adverse costs award and the presence of third-party funding.
Will a tribunal accept an insurance policy as security?
Tribunals have accepted ATE policies or insurer bonds where the wording gives the respondent adequate protection. Practice varies by tribunal and institution.
Is Arbitration Security for Costs available for my dispute?
Availability depends on the merits, the quantum, the costs profile and the counterparty. Every risk is assessed individually and no cover exists until a policy is issued.
Does this quote a price?
No. Pricing is a function of the specific risk and is never quoted in the abstract. Nothing on this page indicates the cost or availability of cover.
Can it be combined with litigation funding?
Frequently, yes. Funding supplies capital; insurance defines the downside. The two are often structured together.
General information only. This page is not legal, financial, investment or insurance advice. Any insurance is subject to underwriting and to the terms of the policy wording issued.