security for costs

When a claimant in legal proceedings appears to the court to be impecunious, the defendant may apply to the court for a payment to be made into court by the claimant in 'security for the defendant's costs'. The sum paid into court is held by the court until the court makes an order for its release - usually after the substantive issues in the legal proceedings have been determined. If the defendant wins the sums paid in security for their costs are paid to the Defendant for their legal costs.

In English legal proceedings, liability for costs to be paid by a party is determined after the court has considered the merits of the case. An exception to this rule lies in orders for security for costs. Where a defendant has been sued the court has a discretion to make an order to secure the costs of the defendant where it is shown is no real prospect of the defendant recovering their costs in the event of successfully resisting the claim. Thus a fund is created that the defendant may draw upon to recover their costs in the event that they successfully defend the proceedings.

Usage: A court will make an order for security for costs pursuant to the Civil Procedure Rules after consideration of established principles, however a discretion always remains with the court to make the order or not.

Related Words: application notice; litigation; interim order; interim remedy.