JLT Risk Solutions will be able to recover a higher than normal level of costs from

collapsed insurer HIH after the insurer's legal action over film finance transactions against the broker failed.

The UK's commercial court told HIH to pay half of JLT costs on an "indemnity basis" rather than the standard level because of the "flimsy" nature of the insurer's case.

HIH had sued JLT after alleging fraud in relation to film finance transactions.

The Australian insurer, which collapsed in March 2001, leaving thousands of policyholders uncovered and £2.1bn in debt, later dropped the fraud allegations after its two main witnesses gave evidence. It also went on to lose its negligence case against JLT.

Simon Brooks, partner with law firm Eversheds, said: "Indemnity costs awards are rare because they are only awarded in cases which are outside the norm. There needs to be such unreasonableness in the paying party's conduct or some other circumstances which has that effect."

Brooks said: "Here the witnesses simply did not support the fraud allegations made, and JLT's position was that it should not have had to face what the judge described as such flimsy and unconvincing allegations."

HIH was ordered to pay half of JLT's indemnity costs and ordered it to make a "substantial" interim payment on account.

It has been refused permission to appeal against the court's decision.