Security for costs

Question 1

What is security for costs?

Answer 1

Where D has reason to believe that if C loses their case, they will not be in a position to pay D’s costs.

Question 2

What part of the CPR does the test for security for costs fall under?

Answer 2

Part 25.13

Question 3

Which parties can apply for security for costs?

Answer 3

The defendant only

Question 4

Is the power of the court to order security for costs mandatory or discretionary?

Answer 4

Discretionary

Question 5

Set out the test for security for costs.

Note: there are 2 limbs, the second limb has 6 possible grounds

Answer 5

1. Court is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and
2. D can show one or more grounds below:
   a. C is resident outside jurisdiction:
   b. C is a company or other body incorporated in or outside GB and there’s reason to believe it will be unable to pay D’s costs
   c. C has changed their address since claim commenced to evade consequences of litigation
   d. C failed to give/gave incorrect address in claim form
   e. C acting as a nominal claimant and there’s reason to believe they’ll be unable to pay D’s costs
   f. C’s taken steps for his assets that would make it difficult to enforce a costs order

Question 6

Must both limbs of the test be shown?

Answer 6

Yes - but only one ground under the second limb must be shown

Question 7

What factors should be considered for ground b (C is a company unable to pay costs)?

Answer 7

• Recent losses/debts
• Given every opportunity to pay and deliberately refused

Question 8

What is a nominal claimant (ground e)?

Answer 8

Where someone sues on behalf of another person

Question 9

What factors should be considered for ground f (steps taking by C to make it difficult to enforce order)?

Answer 9

• Dissipation of assets (e.g. draining bank account)
• Moving assets overseas