Security for costs—stifling a claim

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

  • Security for costs—stifling a claim
  • Stifling or oppressing a claim
  • Burden to show that the claim will be stifled
  • Evidence to support the claim being stifled
  • Funding from a third party
  • Controlling shareholders
  • Litigation funders
  • Approach of the courts

This Practice Note considers the opposition to a security for costs application on the basis that it would stifle the ability to the claimant to pursue the claim against the defendant. This arises where the ground relied on by the defendant that in CPR 25.13(a).

This Practice Note is drafted on the basis that the security for costs application has been made by the defendant. In the case of a counterclaim, a security for costs application may be made by the defendant to counterclaim ie the claimant. The Practice Note should be construed accordingly in such cases.

Stifling or oppressing a claim

When considering whether to exercise its discretion to make a security for costs order, the court needs to be satisfied, having regard to all the circumstances of the case, that it is just to make the order (CPR 25.13(a)).

The Court of Appeal in Sir Lindsay Parkinson & Co v Triplan (1973) set out a series of considerations for a court to apply when determining whether it would be just to make the order which included whether making an order would have the result of stifling a genuine claim. This consideration applies irrespective of whether that was the defendant’s motive for making the application.

This consideration, not stifling a genuine claim or not making an order which is oppressive, has been reiterated by the Court of Appeal

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