Security for costs Flashcards
What is security for costs?
Security for costs is when anyone in the position of a D believes that C will not be willing or able to pay D’s costs should the claim be successfully defended.
This is a protective measure to ensure that costs can be recovered if the defending party wins.
What should D attempt before seeking security for costs?
D should attempt to get a voluntary payment first.
What are the forms of security for costs?
Security can be given in various ways, most commonly:
* Payment into court
* Guarantee to bank
* Payment to D’s solicitor
* Undertaking
These options provide different mechanisms to secure costs.
Who can provide security for costs?
Security can be made by:
* D against C
* C against D (in respect of a counterclaim)
* Third Party against D (in respect of an additional claim)
This allows various parties involved in the litigation to secure costs depending on their roles.
What are the grounds for security of costs?
- having reagrad to all the circumstances of the case, it is just to make an order (OO)
- and one of the prescribed conditions are satisfied
What are the conditions for security of costs?
- C is resident out of jurisdiction (not in a state bound by the 2005 Hague Convention)
- C is a company likely unable to pay D’s costs
- C has made asset-related steps making enforcement difficult
- C has changed address to evade consequences
- C failed to give address
- C is acting as a nominal claimant
What is the standard for the reason to believe that the company will be unable to pay D’s costs?
very low bar - D must just show a potential reason why the company may be unable to pay and also likely amount of costs
What is the main consideration of the court regarding security for costs?
The main consideration is the ability of the respondent to comply with any order.
Courts must ensure that their orders are reasonable and can be complied with.
If the grounds are made out, will Security of Costs definitely be given?
No, the court has discretion
What are Sir Lindsay Parkinson v Triplan factors?
D’s application is less likely to succeed if:
- D has admitted liability or there have been substantial open offers by D
- Delay
- D was responsible for the C’s financial difficutlies
- D is using the application oprressively or to stifle a genuine claim
- settlement is possible
D’s application more likely to succeed if:
- the claim is not genuine
- the claim has little propsect of success
This principle ensures fairness in the litigation process.
How does an admission of liability by D affect security for costs?
An admission of liability by D makes the application for security for costs less likely to succeed.
This is because the claimant may appear more likely to recover costs.
What makes D more likely to succeed in an application for security for costs?
A not genuine claim makes D more likely to succeed.
If the claim lacks merit, the risk of non-payment increases.
What procedural steps are involved in applying for security for costs?
The procedure involves:
1. Normal rules for interim applications
2. Application notice stating which ground applies
3. Support by written evidence
What factors should the court take into account when determining the amount of security?
Factors include:
* Amount of D’s likely costs
* Likely reduction if settled
* Can be for whole action or up to a point in time
* Can cover costs incurred and future costs
CPR for security for costs?
CPR 25.13
