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In New Tasty Bakery v MA Enterprise, HHJ Hacon, in making an order for security for costs, explains why he did not take into account either the defendant’s delay in making the application or the fact it had made a settlement offer. The case also reiterates the need for a claimant to provide evidence to support any contention that the making of such an order would stifle its claim.
One basis on which security for costs may be ordered is that the claimant is insolvent (CPR 25.13(2)(c)). Where the debt of the claimant is owed to the sole director and shareholder it may be argued that as the debt will never be called in the company
is not technically insolvent so as to seek to avoid the insolvency requirement. This was the situation in this case but HHJ Hacon did not consider this to be a relevant factor in determining whether or not to grant a security for costs order. Instead,
he considered the following three factors to be relevant:
Lexis®PSL Dispute Resolution subscribers enjoy a wealth of expert analysis. For further guidance on the establishing security for costs, see Practice Note: Security for costs—procedure
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Janna is a dispute resolution lawyer. She deals primarily with cross border issues and is active in the work being undertaken in relation to the implications of Brexit for Dispute Resolutions lawyers. Janna also heads up a LexisNexis costs team bringing together expertise from across the company to deal with the costs issues facing the profession.
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