What are Security for Costs?

In certain types of legal proceedings in some countries, the plaintiff can be ordered to pay a security for costs. The security for costs is designed to act as an assurance that if the case is ruled against the plaintiff, the plaintiff will be able to pay the legal fees associated with the case. This is used in legal jurisdictions where the loser of a case can be forced to pay court costs incurred by the other side. In costs jurisdictions, as they are known, a security for costs can be ordered by the judge.

When a litigation is brought to court, the defendant may have a reasonable belief that the plaintiff will not pay the court costs or will have difficulty paying them. In these situations, defendants can ask the judge to order a security for costs. The judge will look at the facts of the case and can order the plaintiff to put money in trust or to write a check to the court which will be returned if the plaintiff wins and applied to the costs if the plaintiff loses.

If the plaintiff does not comply with the order, the case will not go forward. The amount of the security is determined by the judge, as a general rule, using information about the case as guidance. Jurisdictions which allow judges to order that the loser of a case pay the costs do have some limits in place to avoid abuse. The costs must be reasonable, and they include fees paid to lawyers and witnesses.

The costs system used in some legal systems can be problematic. Some people argue that it presents a barrier to litigation because people may be afraid of losing cases and being forced to pay costs. Thus, people who may have cases may be put off by the costs and thus do not take their cases to court. Likewise, a security for costs can be a barrier to a plaintiff because she or he may have a solid case, but be unable to put down the security.

In areas where costs are not awarded automatically, the parties to a case may agree that the loser will pay the costs before the trial proceeds. Legal systems which do not mandate the payment of court costs by the loser are sometimes criticized under the argument that they make it too easy for people to litigate by removing the barrier of being forced to pay court costs in the event of a loss. Some people suggest that this promotes frivolous legislation because people have little to lose by filing a case.