Whether security for costs application had been made too early

One of the issues in this case was whether the defendant had made its application for security for costs too early as it had not yet served its defence (although it provided evidence to show that it did intend to defend the claim). The judge held that, although security for costs are usually sought at the first case management conference, there was "no reason to think that it should not have been made, if the application is otherwise justified". However, the early stage at which the application is made may be a relevant consideration when the court exercises its discretion to order security.

The judge went on to observe that "There is something to be said for an application for security for costs to cover the costs of a larger segment of the action at a time when more is known about the parties' respective positions which would be revealed by their statements of case". However, he did not see that as a reason for delaying the provision of security for costs (or ordering the amount of such security), given that he had found that it would otherwise be just in all the circumstances to order security.

COMMENT: The same conclusion in this case was also reached by the judge in Brainbox Digital v Backboard where it was held that a security for costs order could be made even though no defence had been served yet, on the basis that the application should be made promptly. He commented that "There is no requirement that a defendant must first serve a defence before making such an application. Were there to be such a requirement, a defendant may find that an impecunious claimant discontinues having received the defence without any provision having been made for payment of its costs".