UPC: Consideration of Litigation Cost Insurance in Security for Costs

The Court of Appeal addresses the criteria for ordering security for costs and the role of corresponding insurance coverage. In exercising its discretion, the Court must examine, taking into account the facts and arguments presented by the parties, whether the financial situation of the plaintiff gives rise to legitimate and real doubts as to whether a potential cost order can be enforced and/or whether such an order would be unenforceable or enforceable only with disproportionate effort. A litigation cost insurance policy covering the legal costs of the defendants must be taken into account when assessing whether the financial situation of the plaintiff gives cause for concern that a potential cost order cannot be enforced by the defendants, or can only be enforced with disproportionate effort. (UPC 18. 2. 2026, CoA 889/2025)