Security for costs

The general rule in costs jurisdiction is that "costs follow the event". In other words, the loser in legal proceedings must pay the legal costs of the successful party. Where a defendant has a reasonable apprehension that its legal costs will not be paid for by the plaintiff if the defendant is successful, the defendant can apply to the court for an order that the plaintiff provides security for costs.

Typically a plaintiff will be outside the jurisdiction of the court: the law of security for costs recognises that orders of the court relating to payment of a party's legal costs can be very difficult to enforce in non-common law jurisdictions, and so will order security to be provided. Security can also be ordered where a plaintiff is insolvent, or prone to vexatious litigation.

Security is usually provided in the form of a bank cheque paid into the court, or held in a trust account operated jointly by both the plaintiff's and defendant's lawyers.

If the defendant is successful, the money can be applied aginst the costs order. If the plaintiff is successful, the security is returned to the plaintiff.