What is Security for Costs?

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When there is a dispute which goes to court, the usual rule is that the loser pays the winner’s costs. But what if the loser cannot pay? What happens then? 

If a claim has been started against you and you are worried that the Claimant will lose and disappear without paying your costs, what can you do?

In these circumstances, there are court rules which can assist you. The Court rules provide that where the Claimant is a company or an individual outside of the EU, you can make an application to the Court for security for costs.

How to make an application for security for costs

An application for security of costs is relatively straightforward. It has to be made on a standard court form and supported by a witness statement setting out why the Court ought to grant the order sought. 

If the Court orders security for costs, the Claimant would be required to pay a sum of money into the Court’s bank account to allow them to continue with the claim against you.  If they do not make the payment on time, they would not be allowed to continue with their claim. In a recent HIgh Court case, a claim was struck out because the Claimant failed to pay security for costs into Court, in breach of a Court order.  

If the Claimant makes the payment into court, and then loses their claim, the money which has been paid into Court would be used to cover your costs.  f the Claimant wins, the money is returned to them.

An application for security for costs can be a powerful tool against a company which has started a claim against you, or against an individual who has started a claim against you and tried to arrange their affairs (i.e. by putting a house into somebody else’s name) to ensure that if they lose they would not be able to pay your costs.

Do you need help with an application for security for costs?

At Samuels Solicitors, we are experts in assisting Clients with applications for security for costs. 

If you are dealing with proceedings yourself, we are happy to assist you with an application for a low fixed fee.

If you require advice about whether security for costs would be appropriate for your case, contact us today for a free initial assessment.