Security for Costs

Section 25 of the Civil Procedure Rules allows a Defendant to apply to the court for Security of Costs.

Security of Costs is the process by which the Claimant is ordered to pay a certain sum into the court.

The purpose of this (if granted) is that a Defendant can ensure (particularly if it feels that it is party to a spurious claim) that if it wins and costs are awarded against the Claimant, there will be the funds available for the Defendant.

It is a kind of protection for the Defendant and to prevent Claimants filing worthless claims and avoiding paying costs when it loses.

Part 25.13 sets out the grounds for a application for security of costs. The most common (and somewhat easiest to achieve) are when the Claimant is domiciled outside of the jurisdiction or when the Defendant believes (and can establish) that the Claimant is unlikely to be able to pay should it lose.

Security for Costs is often used in a litigation tactic. If the Claimant is ordered to pay a sum into court then it can become uncomfortable and in some cases reconsider or retract the claim.

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