Part 24 – Security for Costs

Scope of this Part

24.1

1. This Part deals with the power of the court to require a claimant to give security for the costs of the defendant.
   • Additional provision is made in relevant enactments relating to limited compa­nies for security to be ordered against an insolvent claimant company.

Application for order for security for costs

24.2

1. A defendant in any proceedings may apply for an order requiring the claimant to give security for the defendant’s costs of the proceedings.
2. Where practicable such an application must be made at a case man­agement conference or pre-trial review.
3. An application for security for costs must be supported by evidence on affidavit.
4. The amount and nature of the security shall be such as the court thinks fit.

Conditions to be satisfied

24.3

1. The court may make an order for security for costs under rule 24.2 against a claimant only if it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order, and that –
   1. some person other than the claimant has contributed or agreed to contribute to the claimant’s costs in return for a share of any money or property which the claimant may recover;
   2. the claimant –
      1. failed to give his or her address in the claim form;
      2. gave an incorrect address in the claim form; or
      3. has changed his or her address since the claim was com­menced; with a view to evading the consequences of the litigation;
   3. the claimant has taken steps with a view to placing the claimant’s assets beyond the jurisdiction of the court;
   4. the claimant is acting as a nominal claimant, other than as a representative claimant under Part 21, and there is reason to believe that the claimant will be unable to pay the defendant’s costs if ordered to do so;
   5. the claimant is an assignee of the right to claim and the assign­ment has been made with a view to avoiding the possibility of a costs order against the assignor;
   6. the claimant is an external company; or
   7. the claimant is ordinarily resident out of the jurisdiction.

Security for costs against counter-claiming defendant

24.4

1. Rules 24.2 and 24.3 apply where a defendant makes a counterclaim as if references in those rules –
   1. to a claimant – were references to a defendant making a counter­claim;
   2. to a defendant – were references to a claimant defending a counterclaim.

Enforcing order for security for costs

24.5

1. On making an order for security for costs the court must also order that –
   1. the claim (or counterclaim) be stayed until such time as security for costs is provided in accordance with the terms of the order;
   2. if security is not provided in accordance with the terms of the order by a specified date, the claim (or counterclaim) be struck out