Security for Costs (Part 25 CPR)

Question 1

What is the purpose of Security for Costs?

Answer 1

A legal measure that protects the defendant from losing money on incurred costs if they win the case but the claimant is unable or unwilling to pay their costs.

Question 2

When can a defendant apply for Security for Costs under CPR 25.13?

Answer 2

The court may require the claimant to deposit money in advance if:

Claimant outside UK jurisdiction - enforcing a costs order against them might be difficult or expensive.

Claimant’s financial position is uncertain - claimant is a company with little money or an individual who appears financially unstable,

Claimant has a history of unpaid costs orders - previously failed to pay court-ordered costs

Question 3

What Forms of Security Can Be Provided?

Answer 3

Payment into court - used if they lose the case and must cover the defendant’s costs.

Bank guarantee - the claimant secures a guarantee from a bank stating that if they lose, the bank will pay the defendant’s legal costs.

Surety bond - A third-party company guarantees payment of the security amount if the claimant loses and cannot pay the defendant’s costs.