Security for costs — overviewSecurity for costs — use and the court's discretion

The court can order a claimant to pay security for costs where there is a significant risk that, if the defendant is successful, it will suffer the injustice of having to defend a case and have no real prospect of being able to recover its costs. Security will not normally be ordered against a set-off as that is considered to be a defence rather than a claim.

If an order for security for costs is made, the amount of the security will be such as the court considers appropriate in all the circumstances, but will not exceed what the claimant can afford. The order may provide that the claim be struck out if the order is not complied with within a certain time frame.

A claimant or defendant can be ordered to pay monies into court where it has failed to comply with some aspect of the CPR.

Security for costs - conditions

The court can order security for costs if (i) it is just to do so and (ii) one of the conditions in CPR 25.13 is satisfied. Examples of such conditions are:

• a trustee in bankruptcy elects to continue the claim — section 49 of the County Courts Act 1984

• there is reason to believe that the claimant company is insolvent or impecunious

• the claimant is resident outside the jurisdiction

There is a great deal of case law to assist parties in determining whether any of the conditions apply.

Security for costs — procedure

On making an application, the defendant is required to file specific documents together with a fee at court.