Security for costs: A useful weapon where the Defendant believes the Claimant will be unable to meet any adverse costs order

Summary

We successfully applied on behalf of our client for security for costs in proceedings brought against her in the sum of £1.2m. The Claimant’s failure to comply with the security for costs order meant the claim was automatically struck out and the costs of the proceedings awarded to our client.

The Proceedings

A Claim was brought against our client by an overseas company in respect of an alleged debt owed to it in the sum of around £1.2m. Our client denied the claim in its entirety and had reason to believe that the company would be unable to meet any costs order made against it. We therefore applied for security for costs on behalf of our client early on in the proceedings.

The Claimant argued that the application was without merit and that it would stifle a genuine claim. On 23 October 2015, Mr Justice Smith dismissed this argument and ordered that security be provided in the sum of £100,000 which would cover the Defendant’s costs up to and including the service of expert reports. Thereafter the Defendant could apply for further security if necessary.

The Claimant failed to provide adequate security by the date set out in the order. Therefore, we applied to the Court on behalf of our client for an order that unless the Claimant provided security within 28 days that the claim be struck out. Mr Justice Blair made this order on 11 December 2015. He also ordered that if the claim was struck out that the Defendant would be awarded her costs of the whole proceedings, including an immediate payment on account of those costs.

The Claimant failed to comply with this order and therefore the claim was automatically struck out on 8 January 2016 with costs awarded to our client. 

The Claimant has since applied for an injunction preventing presentation of a winding up petition and relief from sanctions. We successfully defended both of these applications with costs again awarded to our client.

We then subsequently applied for a non-party costs order against the sole director and shareholder of the Claimant, Mr Sergi Windsor, as the costs orders remained unpaid and the Claimant was insolvent. This application was heard by Mr Justice Teare on 13 May and was successful. Mr Windsor is now jointly and severally liable for the costs of the proceedings. Please click here for further information on non-party costs orders generally and more details on this matter.