Mar 26
If your business is involved in court proceedings, concerns about legal costs are often unavoidable, even where you are confident in the strength of your position.
In England and Wales, it is common for the successful party to seek recovery of its legal costs from the losing party. However, where there is a concern that the other side may not have sufficient funds to meet a costs order, it may be appropriate in certain situations to consider an application for security for costs. This is a mechanism by which the court can require the party bringing the claim to provide financial security to cover some or all of your legal costs if they are unsuccessful. It is important to note that recovery of costs is never guaranteed and remains subject to the court’s discretion.
An order for security for costs can help reduce the risk that a party successfully defends a claim but is unable to recover its legal costs and in some cases, proceedings may be paused until appropriate security is provided, which can prompt a claimant to reflect carefully on the commercial risks of continuing.
In this article, Adam Colville-Robins, Senior Associate in the Dispute Resolution team at Raworths, discusses when an application for security for costs may be appropriate, using a hypothetical dispute between a pasta sauce manufacturer and supplier accused of causing an outbreak of food poisoning by supplying out-of-date sauce to a restaurant chain.
A party commencing court proceedings will usually have assessed the risks and potential costs of doing so before issuing a claim. By contrast, a defendant may face significant and unexpected legal expense in responding to proceedings brought against them.
Using the example above, a sauce manufacturer accused of supplying out-of-date products may need to incur substantial costs to defend the claim. This could include engaging expert witnesses to address product dating, food safety, and causation, in addition to the usual legal costs associated with litigation. In complex disputes, these expenses can be considerable and often the defendant would want assurance that if they were to succeed in their claim, that the costs will be paid by the other side.
In certain circumstances, it may be possible to ask the court to order that the claimant pays a sum of money into court, or provides another form of security, to protect the defendant’s position in relation to legal costs. Any money or security provided is held subject to the outcome of the case.
When considering an application for security of costs, the court will balance the need to protect the defendant against the risk of unfairly preventing the claim from proceeding if, for example, the claimant does not have the cash flow to make the required payment.
Orders for security may take different forms, including:
The amount of security ordered will depend on several factors. While the defendant will usually be required to provide an estimate of likely costs, the court will assess whether that estimate is reasonable in light of its own experience and the nature of the case.
Security for costs is not available in every case and is always subject to the court’s discretion. Circumstances that may be relevant include:
Each case will turn on its own facts.
A party defending a claim may be able to apply for security for costs if there are sufficient grounds. However, it is also possible for a claimant to seek security from a defendant who has brought a substantial counterclaim.
For example, if the sauce manufacturer counterclaims for reputational damage arising from public allegations made by the restaurant chain, the court may consider whether security should apply to one party, both parties, or neither. This will depend on the specific circumstances of the case.
While applications are commonly made against the party who issued the claim, usually a business, it may also be possible to seek security from a third party who is funding the litigation, including professional litigation funders.
Timing is important. Applications for security for costs are generally more likely to succeed if made at an early stage in the proceedings. As a case progresses, the court may take the view that the risks should already have been apparent.
Applications are often raised at an early case management conference, although they can be made sooner. Later applications are possible, but may face greater scrutiny.
Typically, the process begins with a written request to the claimant. If agreement cannot be reached, an application can be made to the court, supported by evidence explaining why security is sought and should be ordered in the particular circumstances.
Orders for security for costs often include consequences for non-compliance. In some cases, proceedings may be paused until security is provided. The court may also attach an “unless order”, meaning that the claim could be struck out if the claimant fails to comply with the order and make the required payment.
Security for costs can be a useful tool to consider where your business is facing litigation and there is genuine concern about recovering legal costs. It may also encourage a more realistic assessment of risk by all parties and, in some cases, assist with settlement discussions. However, it is important that you get the application right to give you the best chance of success.
For further information, please contact Adam Colville Robins at adam.colville-robins@raworths.co.uk. Adam is a Senior Associate in the Dispute Resolution team at Raworths based in Harrogate, North Yorkshire.
Published on 24 March 2026
The information and any commentary contained in this briefing is for general information purposes only and does not constitute legal or any other type of professional advice.
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