Wednesday, April 11th, 2018

Centenary 6 Limited v Robert Caven & Kevin Mawer [2018] CSIH 27

The Second Division has ruled in this important case concerning caution for expenses. The claim by the Noters for a sum in excess of £20m was dismissed, on account of a failure to find caution for expenses. The Lord Ordinary (Lady Wolffe) ruled that an after the event (“ATE”) insurance policy was insufficient to satisfy the order for caution; and a guarantee of payment also produced was defective. A new version of the guarantee, presented on appeal, was acknowledged to be adequate and would have fulfilled the order.

By a majority (Lord Glennie dissenting) the reclaiming motion was refused. An application will be made for permission to appeal to the UKSC. 

Andrew Smith QC and Astrid Smart, neither of whom appeared in the court below, with regular appearances in the Commercial Court, appeared for the reclaimers. Practitioners should note that the Lord Justice Clerk was critical of the form of the respondents’ answers to the reclaimers’ grounds of appeal and to the respondents’ note of argument. Lord Glennie’s comments to the effect that procedures should not be permitted to stand in the way of substantive arguments are particularly significance. 

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