Interim Applications (2): security for costs, interim payments, interim costs
orders
NB, procedure:
Security for costs normal part 23 procedure, issue an application notice
supported by written evidence, serve 3 clear days before hearing etc.
Interim payment 14/7/3 rule (like summary judgment).
Security for Costs
(Part 25, Interim Remedies and Security for Costs)
25.12, Security for Costs
(1) A DEFENDANT to any claim (including a D to a counterclaim/additional claim)
may apply under this section for security for his costs of the proceedings
o (NB, Part 3 provides for court to order payment of sums into court in other
circumstances.
o R20.3 provides for this section to apply to Part 20 claims
(counterclaims/additional claims) i.e. it also applies to Defendants to
counterclaims and additional claims, such Ds can apply for security.
o [[so a Claimant could apply for security for costs against a defendant who
brings a counterclaim, or a 3rd party may apply for security against a
defendant who makes an additional claim against the 3rd party]].
(2) an application for security for costs must be supported by written evidence.
(3) where court makes an order for security for costs, it will:
o (a) determine the amount of security; and
o (b) direct:
(i) the manner in which the security must be given; and
(ii) the time within which the security must be given.
25.13, Conditions to be satisfied, The court may make an order for security for costs under
25.12, IF:
(1) is satisfied that, having regard to all circumstances, that it is JUST to make such
an order; ( see commentary below)
AND
(2) either:
o (i) one or more conditions in para (2) apply:
(a) the Claimant is: (i) resident out of the jurisdiction BUT (ii) NOT
resident in a Brussels Contracting State, a State bound by the Lugano
Convention, a State bound by 2005 Hague Convention, or a
‘Regulation State’ (as defined in s1(3) Civil Jurisdiction & Judgments
Act 1982).
(b) – omitted
(c) C is an (incorporated) company or other body [not an individual]
(whether incorporated inside or outside Great Britain) AND there is
reason to believe that it will be unable to pay D’s costs if ordered to
do so;
, See commentary below
D must show that: there is reason to believe the company
would not be able to meet its debts when an Order for Costs
was made against it. Having regard to the nature and
liquidity of the company’s assets.
See commentary the standard of proof is ‘reason to
believe’ is lower threshold than balance of probabilities.
If C is an insolvent company: then an application for security
for costs under this rule is the primary method of protection.
Adequate insurance may be adequate for C to avoid a security
for costs order
(d) the Claimant has changed his address since claim was
commenced with a view to evading the consequences of the
litigation;
(e) C failed to give his address/gave an incorrect address in the claim
form;
(f) C is acting as a nominal claimant, other than as a representative
claimant under Part 19, and there is reason to believe he will be
unable to pay D’s costs if ordered;
[[NB: “nominal claimant” someone who isn’t really the actual
C, doesn’t have an interest in the claim, and doesn’t have any
interest in the costs, is Claimant in name only]]. May have
been done as a way to subvert costs, window-dressing.
(g) C has taken steps in relation to his assets that would make it
difficult to enforce an order for costs against him.
see commentary below.
egs of such steps:
dissipation of assets;
transfer of assets overseas;
transfer of assets into names of 3rd parties;
transfer/removal of assets into places unknown to D.
D need not show specific intent to avoid enforcement on
behalf of C; but showing specific intent would increase the
likelihood of an order for security.
o OR (ii) an enactment permits court to require security for costs.
(R3.4 allows court to strike out a statement of case; and Part 24 allows for summary
judgment).
[[NB so all the claimants above that you can seek an order for costs against are
claimants who, for the above reasons, who are dodgy/might evade costs]]
SO NOTE an order for security is DISCRETIONARY You need to show both (a) that
a condition listed in (2) is satisfied AND (b) court must also be satisfied that an
order is ‘just’ given all the circumstances
Procedure for making an application = the GENERAL PART 23 PROCEDURE for interim
applications
Should follow general Part 23 procedure (serve application notice at least 3 DAYS
before court is to deal with application).
orders
NB, procedure:
Security for costs normal part 23 procedure, issue an application notice
supported by written evidence, serve 3 clear days before hearing etc.
Interim payment 14/7/3 rule (like summary judgment).
Security for Costs
(Part 25, Interim Remedies and Security for Costs)
25.12, Security for Costs
(1) A DEFENDANT to any claim (including a D to a counterclaim/additional claim)
may apply under this section for security for his costs of the proceedings
o (NB, Part 3 provides for court to order payment of sums into court in other
circumstances.
o R20.3 provides for this section to apply to Part 20 claims
(counterclaims/additional claims) i.e. it also applies to Defendants to
counterclaims and additional claims, such Ds can apply for security.
o [[so a Claimant could apply for security for costs against a defendant who
brings a counterclaim, or a 3rd party may apply for security against a
defendant who makes an additional claim against the 3rd party]].
(2) an application for security for costs must be supported by written evidence.
(3) where court makes an order for security for costs, it will:
o (a) determine the amount of security; and
o (b) direct:
(i) the manner in which the security must be given; and
(ii) the time within which the security must be given.
25.13, Conditions to be satisfied, The court may make an order for security for costs under
25.12, IF:
(1) is satisfied that, having regard to all circumstances, that it is JUST to make such
an order; ( see commentary below)
AND
(2) either:
o (i) one or more conditions in para (2) apply:
(a) the Claimant is: (i) resident out of the jurisdiction BUT (ii) NOT
resident in a Brussels Contracting State, a State bound by the Lugano
Convention, a State bound by 2005 Hague Convention, or a
‘Regulation State’ (as defined in s1(3) Civil Jurisdiction & Judgments
Act 1982).
(b) – omitted
(c) C is an (incorporated) company or other body [not an individual]
(whether incorporated inside or outside Great Britain) AND there is
reason to believe that it will be unable to pay D’s costs if ordered to
do so;
, See commentary below
D must show that: there is reason to believe the company
would not be able to meet its debts when an Order for Costs
was made against it. Having regard to the nature and
liquidity of the company’s assets.
See commentary the standard of proof is ‘reason to
believe’ is lower threshold than balance of probabilities.
If C is an insolvent company: then an application for security
for costs under this rule is the primary method of protection.
Adequate insurance may be adequate for C to avoid a security
for costs order
(d) the Claimant has changed his address since claim was
commenced with a view to evading the consequences of the
litigation;
(e) C failed to give his address/gave an incorrect address in the claim
form;
(f) C is acting as a nominal claimant, other than as a representative
claimant under Part 19, and there is reason to believe he will be
unable to pay D’s costs if ordered;
[[NB: “nominal claimant” someone who isn’t really the actual
C, doesn’t have an interest in the claim, and doesn’t have any
interest in the costs, is Claimant in name only]]. May have
been done as a way to subvert costs, window-dressing.
(g) C has taken steps in relation to his assets that would make it
difficult to enforce an order for costs against him.
see commentary below.
egs of such steps:
dissipation of assets;
transfer of assets overseas;
transfer of assets into names of 3rd parties;
transfer/removal of assets into places unknown to D.
D need not show specific intent to avoid enforcement on
behalf of C; but showing specific intent would increase the
likelihood of an order for security.
o OR (ii) an enactment permits court to require security for costs.
(R3.4 allows court to strike out a statement of case; and Part 24 allows for summary
judgment).
[[NB so all the claimants above that you can seek an order for costs against are
claimants who, for the above reasons, who are dodgy/might evade costs]]
SO NOTE an order for security is DISCRETIONARY You need to show both (a) that
a condition listed in (2) is satisfied AND (b) court must also be satisfied that an
order is ‘just’ given all the circumstances
Procedure for making an application = the GENERAL PART 23 PROCEDURE for interim
applications
Should follow general Part 23 procedure (serve application notice at least 3 DAYS
before court is to deal with application).
