Security for Costs

The Cost Of Providing Security For Costs | Court of Appeal Decision

In this case between a wholesale supplier of mobile telephones (“Infinity”), in administration, and their former solicitors (“TKP”), TKP sought and were granted an order for security for costs against Infinity in the sum of £350,000. The issue which arose cantered around the manner in which the security was to be provided.

security for costs

Higher Level Of Security For Costs Based Upon A Potential Award Of Indemnity Costs Declined

The defendants in this anti-competition and breach of contract case sought security for costs against the claimant.

The claimant agreed with D4-D8 to provide security for 65% of their incurred and anticipated costs. However, D4-D8 sought security at a higher level than this based upon a potential award of indemnity costs given the “wide ranging and serious allegations of impropriety, which may include deceit”.

The defendants’ case was based largely on the decisions in Danilina v Chernukhin [2018] EWHC 2503 (Comm) (which we reported on here) and Re Ingenious Litigation [2020] EWHC 235 (Ch). In both cases the court awarded security at 75%.

Padlocked Pound

Security for costs and the role of court approved costs budgets

Sales LJ sets out the Court of Appeal’s policy regarding costs security when a party demonstrates a ‘deliberate reticence’ about its financial position, and the relevance of any court approved costs budget in the calculation of an appropriate sum