Defining security for costs
The nature of civil litigation is such that it is not always predictable which party will win the dispute. Consequently, the defendant may feel that he has a strong chance to defend the claim alleged against him due to for example a particular defence. However, problem arises because of a concern that if the claimant loses his claim, he would be unable to meet any order of costs made at trial.
In order to protect the defendant of such possibility, there is a provision to make an application that the claimant provides security for costs. If such is granted it requests for the claimant to pay a specific amount of money into court within a period specified in the order.
As can be seen, ordinarily those orders are made by defendants against the claimants. However, such could exceptionally be made by claimants against the defendants in respect of a counterclaim. It is important to note that if the counterclaim is a set-off it is unlikely for security to be ordered.
Conditions for granting security for costs
Security for costs is available to be ordered only in specific circumstances provided for by the Civil Procedure Rules, rule 25.13(2). Those conditions are:
- The claimant is resident out of the jurisdiction but not in Brussels Contracting State, a Lugano Contracting State or a Jurisdiction Regulation State, as defined by the CJJA 1982, s1(3);
- The claimant is a company or other body and there is a reason to believe that it will be unable to pay the defendant’s costs if such action was ordered;
- The claimant has changed his or her address since the claim was commences with the view to evading the consequences of the litigation;
- The claimant fails to give his address in the claim form, or provided an incorrect address;
- The claimant is acting as a nominal claimant, other than as a representative claimant under Part 19, and there is reason to believe that he or she will be unable to pay the defendant’s costs if ordered;
- The claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.
For more information on:
- Procedure on application
- Decision of the courts
- After the trial