Judge refuses to grant security for costs on the basis that the
claim would be stifled
This case involved an application for security for costs against
a corporate Claimant where there was reason to believe that it
would be unable to pay the Defendant's costs if ordered to do
so. Nonetheless, even though the conditions for granting security
were met, Smith J concluded it would not be just to make the order
because it would stifle the claim being brought by the
Claimant's liquidators on behalf of the Claimant, for the
benefit of the Claimant's creditors.
The judge noted that the key question when considering whether a
claim will be stifled is whether the company (and the company
alone) can or cannot provide the security. In this case, even if
the liquidator was prepared to take the highly unusual step of
causing the security to be paid out of her firm's coffers,
those funds would be coming from a third party, and not the company
itself. Furthermore, the liquidator
