COST BITES 322: WHAT IS THE POSITION OF AN INSURER IN RELATION TO VAT WHEN THE INSURED IS INSOLVENT: DOES A PAYING PARTY NOW HAVE TO PAY VAT?

This is an interesting "cost bite" issue.  What is the position on VAT when an insurer is being sued under the Third Parties (Rights Against Insurers) Act 2010 but the insured has gone into voluntary liquidation? Is a paying party liable to pay the defendants VAT on costs now that the insured no lon...