Security for Costs in Litigation

Security for Costs in Litigation

Are you defending a legal action, or do you anticipate court proceedings may be commenced against you in the near future?  If so, you may be justifiably concerned that should you succeed in defending the claim you won’t get your costs back from the other party.  The expert dispute resolution lawyers at Parris Whittaker can take prompt action on your behalf to protect your financial interests by obtaining an order for security for costs.

 

The usual costs rule in litigation is the losing party will be ordered to pay at least a substantial amount of the winner’s legal costs.  In some cases the party defending a claim is highly confident it will succeed in its defence, but is concerned the plaintiff will not or cannot pay any adverse costs award.   Or suppose the company or person is located outside of the Bahamas and you fear it will not pay your legal costs if you win?   An order for security for costs could be your answer and we will give you the expert advice you need for your peace of mind.

The purpose of ordering security for costs is to ensure a successful defendant will have a fund available within the jurisdiction of the court against which it can enforce the judgment for costs.

Where the Court is satisfied with the evidence presented, it may order the plaintiff to provide security for costs should it become liable for your legal costs.   An order for security for costs can be a useful weapon as it is likely to put the plaintiff at a distinct disadvantage.  However, an application for an order must not be used to obstruct a legitimate claim.

At Parris Whittaker, we are adept at ensuring our clients’ legal and financial positions are protected strategic and timely.  On that basis, we will make an application under Order 23 Rules of the Supreme Court which provides that the following must be satisfied:

  • the plaintiff is ordinarily resident outside of the jurisdiction; or
  • the plaintiff is a ‘nominal plaintiff’ being sued for the benefit of some other person and there is reason to believe he will be unable to pay the costs of the defendant if ordered to do so; or
  • the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated herein, or
  • the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation

 

When you instruct us, it is important you provide us with as much information as possible to ensure our application to court is watertight.

The Court must give full consideration to all the circumstance of the case.  The relevant circumstances include, for instance, whether the plaintiff’s claim is bona fide (not a sham) and whether the company has a reasonably good prospect of success. The court will also consider whether there is an admission by the defendants on the pleadings or elsewhere that money is due, or whether the application for security is being lodged aggressively in an attempt to stifle a genuine claim by the plaintiff. 

In your case, the Court may order the plaintiff to provide an appropriate amount of security for your costs of the action, or other proceedings, if it deems just to do so. 

If you are concerned about your potential defence litigation costs, contact the experienced dispute resolution lawyers at Parris Whittaker.