Security for costs—counterclaims and set-offs

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Security for costs—counterclaims and set-offs
  • Principles applied by the courts
  • Court of Appeal decisions
  • First instance decisions

Brexit: The UK's departure from the EU on exit day, ie Friday 31 January 2020, has implications for practitioners considering security for costs. For guidance, see: Cross border considerations—checklist—Brexit—impact on CPR.

This Practice Note considers whether the court will make an order for security for costs in cases in which there are counterclaims. A key consideration will be whether the defendant is making a counterclaim or is in fact seeking set-off. The approach of the court will differ depending on whether it is a counterclaim or a set-off. The key authority in this area is Hutchison Telephone v Ultimate Response. It is one of a series of Practice Notes which considers issues relating to security for costs under CPR 25. The other Practice Notes are:

  1. Security for costs—what is it, its use and the court's discretion

  2. Security for costs—requirements and conditions (CPR 25.13)

  3. Security for costs—making an application

  4. Security for costs—additional security

  5. Security for costs—level of security

  6. Security for costs—ATE insurance

  7. Security for costs—after an order is made

  8. Security for costs—payment into and out of court

  9. Security for costs—equivalent orders

Principles applied by the courts

In cases in which a defendant makes an application for security for costs, it maybe that the there are co-extensive claims. In such cases, the court will look at whether it is fair to make an order for security for costs. The

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