High Court Orders Security for Costs in Asertis Ltd vs Lewis Barry Bloch [2024] EWHC 2393 (Ch) - Case Summary

The High Court has ruled in favor of Lewis Barry Bloch, ordering Asertis Ltd to provide security for costs in ongoing litigation. The judgment highlights significant concerns about Asertis Ltd's financial stability and underscores the rigorous scrutiny applied to financial security in litigation funding.

TLDR:

• High Court orders security for costs in litigation between Asertis Ltd and Lewis Barry Bloch.
• Key concerns about Asertis Ltd's financial stability influenced the judgment.
• ATE Policy and revolving credit facility deemed insufficient security measures.
• Case highlights financial transparency requirements for litigation funders.

Background: The case revolves around claims assigned to Asertis Ltd by the joint liquidators of Genesis Capital (UK) Ltd. Asertis alleges that Bloch, the sole director of Genesis at the relevant times, breached his fiduciary duties by authorizing a transfer of £2,754,170.60 to Mr. Warren Friedland in December 2018. During the costs and case management conference (CCMC) on June 21, 2024, Judge Mullen granted Asertis permission to amend its particulars of claim and set directions for a trial. The CCMC was adjourned to November 21, 2024, to address costs management and disclosure issues.

Legal Issues: Bloch's application for security for costs was a focal point of the hearing. Bloch argued that Asertis would be unable to pay his costs if ordered, citing the company's financial losses and reliance on uncertain litigation funding. Asertis countered by pointing to its revolving credit facility and an 'after the event' insurance policy (ATE Policy) with an 'anti-avoidance endorsement' (AAE). However, the court found these measures insufficient to mitigate the risk.

Judgment Summary: Judge Mullen ruled that Asertis must provide security for costs, ordering the company to pay a sum into court equivalent to 60% of Bloch's incurred costs and 70% of the estimated costs to be approved at the next CCMC. The judgment emphasized the importance of financial stability and the adequacy of security measures in litigation funding.

Practical Implications: This case serves as a cautionary tale for litigation funders and highlights the court's meticulous approach in assessing financial security. The judgment underscores the importance of robust financial transparency and adequate security arrangements in ongoing litigation.

Legal representatives: Mr. Ian Tucker (instructed by APS Legal) for the Claimant; Mr. Cleon Catsambis (instructed by Mishcon de Reya LLP) for the Defendant.

Judicial Panel: ICC Judge Mullen

Case Citation Reference: [2024] EWHC 2393 (Ch)

For more information, visit becivil.co.uk.