Security for costs

In litigation, the usual position in relation to costs is that the unsuccessful party will be ordered to pay the successful party’s recoverable costs. Such costs may be substantial, especially when dealing with cases involving a foreign element which gives rise to additional costs, eg travel, expert evidence on foreign law, etc. While a defendant may be confident of their ability to defend the claim, they may nevertheless have concerns about potential difficulties in recovering costs that are provided for in any costs order against the claimant. The purpose of a security for costs order, which is an interim remedy, is to alleviate that concern by requiring the claimant to pay money into court, or to provide some other form of security, as a precondition to being able to continue with the claim. Where an order for security for costs is made, the proceedings will often be stayed, pending payment or provision of security.

Note, security for costs can be sought against the claimant or, in the case of a counterclaim, against the defendant. In cases where the defendant has brought a counterclaim specific considerations will apply.