Contis Group v Swipewallet: bifurcation and security for costs with ATE insurance

In Contis Group Limited & Anor v Swipewallet Holdings Limited & Ors [2025] EWHC 3065 (Comm), Christopher Hancock KC, sitting as a High Court judge, delivered an instructive judgement on case management in high-value commercial disputes, addressing both the appropriateness of bifurcating trials and the sufficiency of after-the-event (ATE) insurance policies as security for costs.

The dispute centred on agreements between Contis and Swipewallet (a Binance affiliate) enabling cryptocurrency holders to make purchases using VISA debit cards. Following regulatory difficulties with VISA and the Bank of Lithuania in 2023, Swipewallet terminated the agreements. Contis claimed €144 million in guaranteed fees under clause 17.3 of the Framework Agreement, whilst Swipewallet maintained the termination was justified and counterclaimed for damages.

Bifurcation of liability and quantum

Contis sought to split the trial, arguing that determining liability first would save approximately £1 million in costs if their primary debt claim succeeded. Swipewallet resisted, citing overlapping issues between liability and quantum, particularly regarding the penalty clause analysis and the economic impact of alleged breaches.

The judge granted bifurcation, finding that potential cost savings outweighed the risks. Whilst acknowledging some overlap, the court rejected Swipewallet's concerns that evidence on the penalty clause and breach impacts would substantially duplicate quantum evidence. The penalty clause analysis would focus on projections at the time of contracting, distinct from the detailed quantum inquiry.

Significantly, the court dismissed Swipewallet's argument that bifurcation would prejudice settlement discussions. Rather, knowing where parties stood after liability determination would more likely facilitate settlement. The court also found concerns about the claimants' deteriorating financial position insufficiently compelling, characterising the prejudice as "speculative" given multiple contingencies that would need to materialise.

Security for costs and ATE insurance adequacy

Swipewallet's security application raised complex issues about ATE policy sufficiency. The policy contained various termination provisions, including where prospects of success fell below 51% or if insurers' consent wasn't obtained for interim applications or settlements.

Applying the established test from Premier Motorauctions Ltd v PricewaterhouseCoopers LLP [2017] EWCA Civ 1872, the court considered whether there was a "real, as opposed to fanciful" risk the policy wouldn't respond. The judge differentiated between three types of risk: avoidance ab initio, loss of cover for individual applications, and prospective termination.

The court found risks of avoidance or losing cover for individual applications "unrealistic", reasoning that commercial incentives would ensure compliance with notification requirements. Both claimants and insurers would wish to preserve coverage, and insurers would need to act reasonably in withholding consent.

However, the risk of future termination under clause 4.8.1 was "real and not fanciful" given litigation uncertainties. The court therefore ordered £300,000 security to enable Swipewallet to apply for alternative security if the ATE policy terminated. Additional protective orders required notification of any termination and evidence of insurers' consent for interim applications and settlements.

The Crabtree principle (that security shouldn't be ordered where claim and counterclaim raise identical issues) had limited application. Whilst overlap existed, bifurcation meant many costs would relate solely to Contis's claim, particularly construction of clause 17.3 and the penalty clause argument.

The judgement provides practical guidance on managing complex commercial disputes where impecunious claimants rely on ATE insurance, balancing defendants' protection against inhibiting access to justice.