Security of Costs

Question 1

Security of Costs: Who can make an application for security for costs?

Answer 1

• A defendant against a claimant

-A claimant against a defendant in respect of a counterclaim

-A third party against a defendant in respect of a Part 20 additional claim

Question 2

Security of Costs: What are the grounds for security of costs?

Answer 2

• One or more of the prescribed conditions in the rules are satisfied. ⛔️
  AND
• Having regard to all of the circumstances of the case, it is just to make an order ⚖️

Question 3

Security of Costs: What are the prescribed conditions for security of costs?

Answer 3

• the claimant is resident outside of the jurisdiction 🌎 (but is not resident in a state bound by the Hague Convention)
  [individual = habitual abode]
  [company = CM&C]
• The claimant is a company and there is reason to believe it will be unable to pay the costs if ordered to do so. 🏭
  [must show WILL be unable to pay costs AND the amount of likely costs]
• The claimant has taken steps in relation to its assets that would make enforcement of a costs order difficult. 👣🦹‍♂️
• The claimant has changed address since the claim has commenced with a view to evading the consequences of litigation.🏠
• The claimant failed to give an address on the claim form. 💌
• Claimant is acting as a nominal claimant and there is reason to believe it will be unable to pay the defendant’s costs if ordered to do so.🥸

Question 4

Security of Costs: What is included in an application for security of costs?

Answer 4

Normal rules apply, plus:

• application notice should state which grounds apply.
• application must be supported by written evidence which should cover;
  a) the grounds, 🪧
  b) factors in the court’s discretion, ⚖️
  c) the likely costs to trial 💰
  d) the amount of security requested💵

Question 5

Security of Costs: Who sets the amount of security if the claim is successful?

Answer 5

The court has full discreation

Question 6

Security of Costs: What forms can the security take?

Answer 6

• A payment into court. 🧑‍⚖️
• A payment to the defendant’s solicitor 🧑‍💼
• A bank guarantee 🏦
• An undertaking to pay costs 📝

Question 7

Security of Costs: What else will the court consider?

Lindsay Parkinson v Triplan

Answer 7

• Admission of liability by defendant
• Delay will make less likely to succeed.
• Claim appears not to be genuine claim or has little prospect of success
• If the defendant has been responsible for the claimant’s financial difficulties
  will made defendant’s claim for security more likely to succeed.

Question 8

What is the court’s main consideration regarding security for costs?

Answer 8

• the ability of the respondent to comply with any order for security for costs.
  .
  The court should not normally make the continuation of a claimant’s claim dependent on a condition which it is impossible for the claimant to fulfil, because this effectively restrict the claimant’s access to the justice system. An impairment of a claimant’s right of access which is disproportionate to the need to protect the defendant is likely to be a breach of Article 6 ECHR (right to a fair trial)