Security for Costs Flashcards
What is security for costs?
Application made by person in position of D, concerned that C will not be willing / able to pay D’s costs should claim be successfully defended. The court can order security.
What is a security for costs order made to protect?
Solely the costs of the claim, not the damages.
Who can a security for costs application be made by?
D against C, C against D in respect of counterclaim, Third party against D in respect of additional claim.
What are the grounds for security for costs?
1) Having regard to all the circumstances of the case, it is just to make an order
AND
2) One or more conditions in the rules are satisfied.
What are the conditions in the rules for security of costs?
1) C is resident out of jurisdiction (not in 2005 Hague Convention state)
2) C is a company and there is reasonable to believe it will be unable to pay D’s costs if ordered
3) C has taken steps in relation to its assets that would make enforcement of a costs order against it difficult
4) Other reasons such as changing address, failing to give address.
What countries are in Hague Convention?
UK, EU Member States, Mexico, Singapore, Montenegro.
When is the claimant company condition satisfied for security of costs?
D must show company will be unable, not may be unable.
Is the court obliged to give a security for costs order if conditions are satisfied?
No, the court still has discretion – must be just to make such an order.
What is the application procedure for security for costs?
Same as others – application notice stating grounds with supporting evidence.
What must be written in written statement alongside application for security for costs?
1) The ground
2) Factors in court’s discretion
3) Likely costs to trial
4) The amount of security requested.
What amount of security will be given for security of costs? What will the Court take account of?
Entirely in court’s discretion, will take into account:
1) Amount of D’s likely costs
2) Security can be whole or up to a point in time (e.g. up to disclosure)
3) Deduction can be made for likely reduction upon assessments of cost or possibility of settling
4) Other facts -e.g. delay.
Where do security of costs get paid or take form? [4]
1) Payment into court
2) Payment to D’s solicitor
3) Bank guarantee
4) Undertaking to pay costs.
