Security for Costs Applications and Undertakings
In the recent case of Pisante and Others v Logothetis and Others  EWHC 3588 (Comm), the Court ordered the Second to Fourth Claimants to provide security for costs in excess of £800,000 to the Defendants. When doing so, the Court also gave guidance in respect of the costs of security for costs applications, in addition to defendant’s undertakings provided to compensate a claimant for any loss suffered as a result of giving the security.
In this case, the Claimants had previously provided security on a voluntary basis and the Court was asked to make a finding on an increase in this security after the parties had failed to reach a consensus. The Defendants were awarded 95% of the costs of the application on the basis that they were the successful party, having been awarded increased security. Interestingly, the Defendants had previously been willing to accept £750,000 of security after receipt of the Claimants’ further evidence. However, the Claimants subsequently withdrew this offer. As the Defendants’ application was successful and they had beaten the amount offered in negotiations and given that the Defendants had not acted unreasonably, they were entitled to their costs.
It was found that a request for an undertaking from the Defendants should be considered on its merits and that neither authority nor principle supported the view that undertakings should be required only in exceptional or unusual circumstances. The Claimants were able to provide sufficient reason as to why an undertaking would be required, including the fact that the provision of security was likely to involve costs by way of bank charges, along with the possibility that funds would have to be allocated for security that may have otherwise been able to be deployed elsewhere.
If you have any questions about the topics mentioned above, please contact Andrew Broadbent on 0114 252 1416 or email firstname.lastname@example.org