Show Me The Money – Security For Costs

Two recent judgments highlight the difficulties facing defendants when they apply for an order which safeguards their exposure to costs. A security for costs order requires the plaintiff to lodge in court a sum of money as security for the defendant’s costs, in the event the plaintiff’s claim is unsuccessful.

Standard tests

The courts must strike a balance between a person or company’s right to recover costs from an unsuccessful plaintiff and the plaintiff’s right of access to justice. If the plaintiff is an individual, the defendant must establish that they normally reside outside of the jurisdiction and that the defendant has a good defence. If the plaintiff is a company, the defendant must establish that it is unlikely to be able to pay costs if they were to lose the case.