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ARTICLE · 10 MAY 2012

Companies Act: Security For Costs

Under Irish law, as a general rule, costs typically follow the event such that the winning party recovers its party and party costs from the unsuccessful party.

IrelandCorporate/Commercial Law

Introduction

Under Irish law, as a general rule, costs typically follow the event such that the winning party recovers its party and party costs from the unsuccessful party. Where a defendant believes that a plaintiff has brought unmeritorious proceedings and is concerned that the plaintiff may be unable to meet any costs order against it in the event that it succeeds at trial, it may seek security for its costs from the plaintiff as a condition of proceeding with the claim.

Although the granting of security for costs is strictly controlled, in the right case such an application can be a useful weapon in the armoury of a defendant. While court rules govern the general jurisdiction of the courts to make such orders1, a statutory jurisdiction is afforded to defendants where the plaintiff is a company. The recent High Court decision in County Monaghan Anti-Pylon Ltd v Eirgrid plc2 has reiterated the test applicable under that legislation.

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