Judge considers security for costs application against an individual resident outside the EU/EEA
The defendants sought security for costs against the claimant on the basis that she was an individual resident (broadly) outside of the EU/EEA (CPR r25.13(2)(a)). The mere fact that a claimant is resident outside the EU/EEA does not entitle a defendant to security: "the establishment of residence is merely a trigger". The court must then consider the impact on any future enforcement of a costs order.
In Ras Al Khaimah v Bestfort [2016], the Court of Appeal held that it is usually sufficient for an applicant simply to adduce evidence to show that there is a "real risk" that it will not be in a position to enforce a costs order and that, in all the circumstances, it is just to make an order for security. If enforcement will be possible but there is a real risk that it will take longer or cost more than enforcement in the EU/ EEA, security will usually be ordered to cover that risk only.
However, if there is a real risk of non-enforcement, the court may instead order security to cover the full likely recoverable amount of costs to date and then later to trial.
Here, there was a risk of non-enforcement in Russia, but the greater probability was that enforcement would be possible but take longer and be more difficult. The judge held that in such circumstances "one here combines the position as part of a sliding scale with the various discretionary factors (to the extent relevant). Thus .. a marginal risk in combination with lack of probity or established bad conduct may justify a full securing of costs".
On the facts of the case, the judge concluded that "this [was] a case where a single order of a substantial amount of security to reflect the real (but small) risk of non-enforcement and greater (but less financially extensive) risk of increased cost and delay [was] the correct approach".
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