Security for Costs

Question 1

Can any party apply for security of costs?

Answer 1

No, only the defendant (Rule 25.12(1))

Question 2

When will court make an order for security of costs?

Answer 2

Rule 25.13(1): if (a) satisfied it is just to make such an order and (b) one or more of the conditions in 25.13(2) applies

Question 3

What are 3 of the conditions found in Rule 25.13(2)

Answer 3

1. Claimant based outside the EU
2. Claimant is an impecunious company
3. Claimant has taken steps to make enforcement difficult

Question 4

When is it just for court to make an order? - 5

Answer 4

1) Strength of claim and defence
2) Claimant’s ability to provide security
3) D’s behaviour led to C’s shortage of money
4) C has substantial property of permanent/fixed nature in jurisdiction
5) Timing - if D delayed for no good reason, court less likely to award

Question 5

Should D write to C to ask for security to be provided voluntarily?

Answer 5

Yes

Question 6

What must D provide to court in its application? - 3

Answer 6

(1) Establish a 25.13(2) condition exists
(2) Persuade court it’s just to exercise discretion
(3) Justify amount sought

Question 7

What order can a court make? - 4

Answer 7

(1) Make payment into court
(2) Security is held by D’s solicitor
(3) Banker’s draft or guarantee
(4) C gives suitable undertaking to court

Question 8

What happens if C fails to provide security after court has ordered it?

Answer 8

The claim can be struck out