The commercial litigation team at Fraser Dawbarns has recently defeated a multi-million pound claim on behalf of a King’s Lynn based commercial client. Following a prompt application for security for costs, the Claimant discontinued its claim at a relatively early stage.
When one party brings a claim against another and the matter goes to court, the successful party is usually able to recover its reasonably incurred legal costs. An order for security for costs offers considerable protection to a defendant who is facing a claimant with no funds or assets, and who might therefore be unable to reimburse the costs.
A security for costs application helps to guard against this as the Court can be asked to make an order that a certain amount is paid into court, pending the outcome of a trial. In our case, our client was served with a High Court claim running to several million pounds. We promptly responded with an application for security for costs asking around £400,000 to be paid into Court (in essence, like a security bond).
As the application hearing date drew closer, the claimant’s funds dwindled, leaving them in a position where they would face considerable difficulty in defending such an application. The claimant then discontinued the claim completely.
If you are faced with a claim, it is always worth considering whether to make such an application. It can flush out whether a claimant is serious about pursuing the claim. In our particular case, the claimant had issued a claim to try and push our client into settlement and thankfully we were able to put an end to this strategy.
Joshua Shuardson-Hipkin worked closely with Katie Longstaff and Radcliffe Chambers on this application and has considerable experience of security for costs applications in the past. Sadly, many businesses which defend a claim do not make an application and, following years of litigation, do not make any costs recovery even if they are successful.
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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.
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