Security for Costs

• Author: International Law Group

In 1993, Amy Nasser (plaintiff), formerly of the U.K. but now a U.S. citizen living in Wisconsin, claimed that someone had stolen jewelry and other objects of hers worth about 900,000 pounds from her safety deposit box at the United Bank of Kuwait (UBK). She filed suit against UBK in the English courts. A long and complex series of motions, correspondence and phone calls began in February 1994 over an order that she deposit 10,000 pounds (at some point as high as 25,000) as security for defendant's costs.

Various judges at first instance expressed concern as to whether plaintiff could or could not afford the security and whether various amounts imposed would or would not stifle the litigation of a meritorious claim. After many ups and downs including dismissals and reinstatements, the lower court dismissed plaintiff's case for want of prosecution when plaintiff failed to deposit 17,500 with the Court by a specified date.

When plaintiff took an appeal, the Court of Appeal (Civil Division) in October 2000 itself faced an additional security-for-costs question as to appellate costs. After detailing the intricate proceedings below, the Court of Appeal reaches the merits of a question of general interest. That issue is what should the appellate court's approach be to "applications for security for the costs of an appeal under the Civil Procedure Rules (CPR), bearing in mind the restriction since 2nd May 2000 of the jurisdiction to make such orders, effected by CPR Part 25.15, read with Part 25.13(2)(a) and articles 6(1) and 14 of the European Convention on Human Rights as incorporated into English law since 2nd October 2000 by the Human Rights Act 1998." [para. 1]

A key provision of the CPR is Section 15.13(1). It authorizes a court to order security for costs if it is just under all the circumstances of each case and if one or more of the conditions set forth in subparagraph (2) applies. Section 25.13(2) provides: "The conditions are - (a) the claimant is an individual - (I) who is ordinarily resident out of the jurisdiction; and (ii) is not a person against whom a claim can be enforced under the Brussels Conventions or the Lugano Convention, as defined by section 1(1) of the Civil Jurisdiction and Judgments Act 1982."

[Editorial Note: The Brussels Convention applies in the 15 EU Member States, while the Lugano Convention has entered into force in the EFTA countries of Iceland, Norway and Switzerland. As of May 20,1999, Poland has also adopted...