Previous case law
Present case


In Cody v Murray(1) the High Court ordered a claimant based in Texas to pay security for costs. While such applications are commonplace, this recent decision is of particular interest as the court departed from a previous High Court decision(2) which had sought to establish an exception to the Court of Appeal precedent (Nasser(3)) that the mere fact of foreign residence in a country not covered by the Brussels/Lugano regime is insufficient to justify the exercise of powers under the Civil Procedure Rules (CPR) to order security for costs. However, the judge recognised the limitations in the Court of Appeal precedent on this point and suggested that further guidance or reconsideration of the issue is urgently required by the appellate courts.


The first defendant, Andrew Murray, and the other two defendants, his parents, entered into a written agreement dated December 16 2003 with the claimant under which the claimant was appointed their exclusive adviser in relation to Murray's professional tennis career. The underlying dispute concerned the claimant's entitlement to a percentage of certain commercial and sponsorship agreements entered into by Murray.

The defendants brought an application for security for costs under CPR 25.13(2)(a) on the basis that the claimant resides in Texas.

Previous case law

Since the Court of Appeal decision in Nasser it has been clear that when an application is made on the basis of residence outside states covered by the Brussels or Lugano Conventions or the EU Jurisdiction and Judgments Regulation, the mere fact of foreign residence is insufficient to justify the exercise of the power conferred on the court to order security for costs.

In Nasser the Court of Appeal held that the essential question for granting security of costs in this context was whether:

"there are likely to be substantial obstacles to or a substantial extra burden (e.g. of costs or delay) in enforcing an English judgment, significantly greater than there would be as regards a party resident in England or in a Brussels or Lugano state."

The Court of Appeal went on to observe that an "absence of reciprocal arrangements or legislation providing for enforcement of foreign judgments cannot of itself justify an inference that enforcement will not be possible". It would be both discriminatory and unjustifiable if the mere fact of residence outside any Brussels or Lugano member state could justify the exercise of discretion to make orders for security for costs with the purpose or effect of protecting defendants against risks, to which they would equally be subject and in relation to which they would have no protection if the claim or appeal were being brought by a resident of a Brussels or Lugano state. In granting an order, the court should base its decision on objectively justified grounds relating to the obstacles to or the burden of enforcement in the context of the claimant or country concerned.

While the Court of Appeal acknowledged that there remain some countries where enforcement is in "obvious reality" all but impossible, it is incumbent on the courts to try to ensure that any order granted specifically reflects the nature and size, and thus additional costs, of the risk against which it is designed to protect.

In determining the present application, the court also considered the 2010 case Dumrul,(4) where the High Court found that the obstacle or burden referred to by the Court of Appeal in Nasser related only to 'enforcement' of a judgment and not the 'execution' – the former stopping at the point when an order or judgment is obtained from the foreign court opening the door to execution, which might be in the form of an order or judgment obtained under reciprocal enforcement treaties or legislation, or (particularly in the United States) a new judgment through an action on the English judgment.

The High Court has now expressed severe reservations that the distinction between enforcement and execution as relied on in Dumrul – that is, on the basis of their supposed literal meaning when 'enforcement' could, depending on the context, extend ambiguously to either meaning – was correct. The court could not see any indication in Nasser that any restriction was intended such as that adopted in Dumrul. Had it been, the court considered that it would surely have been clearly addressed and articulated by the Court of Appeal, together with the reasons impelling its adoption.

While comity and the rules of precedent prescribe that the court should now depart from the decision in Dumrul only if it is clearly satisfied that the previous decision was wrong, with great respect to the previous judge, the court concluded that such was the case. In adopting this position, the court commented that the judgment in Nasser:

"may be thought urgently, for at least substantial guidance from the appellate courts if not some element of re-consideration, to address the practical difficulties which have since emerged at the first-instance coal-face, exemplified in both Dumrul and the present case."

Present case

The court was not persuaded that there was significant additional cost to render the judgment of the English court enforceable in Texas compared to a European equivalent. The court then went on to consider the execution process and noted that Texas has a number of anomalous liberal exemptions from execution which protect:

  • among other things, home furnishings, clothes, jewellery and cars with a value of up to $30,000;
  • a 'homestead'; and
  • further exemptions regarding insurance policies and savings plans.

The claimant asserted that he had no assets and nothing but bank debts. This was relied on in support of the claimant's argument that the exemptions did not represent an additional obstacle to execution, on the basis that there is nothing for the exemptions to bite on.

The court was not satisfied that the claimant was either presently or potentially, in the near future, without assets that would benefit from the $30,000 cash exemption, and it appeared unlikely that the claimant did not have at least that modest level of such assets. In contrast, the court had no basis to reject the claimant's other submissions regarding his lack of real property, insurance policies and savings plans; these submissions appeared entirely plausible. Accordingly, the court concluded that it was unlikely that the claimant would benefit from exemptions worth more than $30,000.

The defendants submitted that the existence of these exemptions in Texas meant that significant extra time and costs would have to be spent on taking depositions (and perhaps other investigatory work) to track down non-exempt assets. The defendants provided evidence from a Texan lawyer putting the cost of collection at $50,000 to $100,000 according to size or, if acting on a contingency, a fee of 33% of collections.

The claimant provided evidence from another Texan lawyer who stated that he would require a contingent fee of 25% of all collections plus reimbursement of expenses. The court proceeded on the basis that the work would be done on a contingency fee arrangement, which would reduce the amount ultimately recovered by the defendants by 25% to 33%.

On the evidence submitted, the court was not persuaded that the claimant had non-exempt assets to a level which would lead to any significant amount being collected, and the fee would be correspondingly modest. The court also required evidence that the cost of collection would be greater than the costs and expenses of executing in a European country. However, the court had no comparative evidence before it on this point, although it was noted that any real difference would be likely to manifest itself only in the case of a substantial recovery. Accordingly, the court concluded that a loyal application of Nasser would not justify an order in excess of $30,000.

Finally, the claimant sought to argue that the modest level of his assets was such that any order for security would stifle his claim. However, the court concluded that the evidence presented was inadequate for this purpose, and the claimant had ignored the well-established requirement that he should provide full detail of all his assets and earnings and address whether the security could be found from moneys provided from other sources, such as borrowing. In these circumstances, the court was not satisfied that the claimant would be unable to find the $30,000 and be prevented from prosecuting this claim further.


It used to be the case that when a decision was made in principle to award security, the court would generally give security for the whole of the costs which it regarded as being a reasonable estimate of what was likely to be incurred. This general principle was brought into question following Nasser. There is now an important distinction between situations where there would be substantial obstacles or difficulties in enforcement and those where there will simply be "an extra burden" in enforcing a judgment as compared to in a Brussels/Lugano member state.

However, there is now some confusion as to whether this "extra burden" should be calculated in relation to the strict enforcement (ie, recognition) or the wider enforcement and execution of a judgment. The diverging opinions of the High Court on this point is an interesting aspect of this case and it is clear that the lower court would welcome further guidance on this matter.

Notwithstanding the confusion regarding the correct application of Nasser, this decision highlights the need to ensure, for both applicant and respondent, that sufficient evidence is submitted to the court on the precise procedures of enforcement and execution in the relevant jurisdiction and, in particular, evidence as to the additional burden faced by the applicant as compared to in Brussels/Lugano countries.

For further information on this topic please contact Laura Martin at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email ( The RPC website can be accessed at


(1) [2013] EWHC 3448 (Ch).

(2) Dumrul v Standard Chartered Bank [2010] EWHC 2625.

(3) Nasser v United Bank of Kuwait [2002] 1 WLR 1868.

(4) Supra note 2.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.