DR Security for Costs

Question 1

Who can bring an application for security for costs and what is the purpose?

Answer 1

An application made by a person in the position of the defendant who is concerned that the claimant (respondent) will not be willing/able to pay the defendant’s costs should the claim be successfully defended

• Security for costs relates solely to the costs of the claim (not level of damages)

Application made by:
- Defendant
- Claimant in respect of a counterclaim
- Third party against defendant in respect of additional claim

Question 2

Structure for Application

Answer 2

1. Application made promptly
2. It is just to make an order (having regard to all circumstances)
   a) will it bankrupt them? is D responsible for C’s financial difficulties?
   b) is it prompt?
   c) do they have a good chance of success?
   d) has D admitted liability? If so, less likely to succeed
3. Satisfies one or more of the prescribed conditions:
   a) Claimant is outside jurisdiction (and not in a state bound by Hague Convention)
   b) the claimant is a COMPANY and there is reason to believe it WILL be unable to pay D’s costs if ordered to do so
   c) Claimant has taken steps in relation to assets which would make enforcement order difficult
   d) Claimant has changed address since claim was commenced
   e) Claimant has failed to give an address in CF
4. Amount of security: if the court makes an order for security for costs, it will determine the amount, as well as the manner in which security is given
   - AMOUNT = court’s discretion, take into account D’s likely costs. Deduction can be made for possibility of settling
   - MANNER = payment into court / solicitor / bank guarantee / undertaking