Chris Warren-Smith and Ian Pegram advise on what to include in security for costs applications
An application for security for costs has proved an effective strategic weapon for defendants to pursue and fund a defence. Defendants can also use an application to force claimants to re-focus on whether their claim in fact has merit.
However, although the regime certainly applies to costs properly incurred after proceedings have started, the scope of pre-action costs which may validly be included in an application has not been so clear. Helpfully, the court in Lobster Group Ltd v Heidelberg Graphic Equipment Ltd & Anor [2008] All ER (D) 88 (Mar), has now given guidance on the extent to which an applicant might obtain security in respect of preaction costs and the costs of pre-action mediation.
Security for costs
The court’s power to make an order for security for costs is discretionary under CPR Pt 25. The court must be satisfied, having regard to all the circumstances of the case, that it is just to make an order and where one or more of the conditions in CPR 25.12(b) applies—where the claimant is
