Security for costs allow defendants to secure from Claimants a sum to be paid onto account in case that party loses the case. This means that a defendant will be able to proceed with a degree of security about their eventual costs being paid. This reflects the fact that while Claimants have a choice about whether to litigate or not, defendants usually have legal costs forced upon them.
Part 25.13 sets out the conditions for making an order for security for costs. These are as follows:
(1) The court may make an order for security for costs under rule 25.12 if –
(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and
(b)
(i) one or more of the conditions in paragraph (2) applies, or
(ii) an enactment permits the court to require security for costs.
(2) The conditions are –
(a) the claimant is –
(i) resident out of the jurisdiction; but
(ii) not resident in a State bound by the 2005 Hague Convention, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982 7;
(c) the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so;
(d) the claimant has changed his address since the claim was commenced with a view to evading the consequences of the litigation;
(e) the claimant failed to give his address in the claim form, or gave an incorrect address in that form;
(f) 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 will be unable to pay the defendant’s costs if ordered to do so;
(g) the claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.
The Court must also be satisfied that it is just to make the order.
The procedure is the same as all other interim applications. An N244 must be completed and filed with supporting evidence.