Parsdome Holdings Limited v Plastic Energy Global SL
[2023] EWHC 2851 (Comm)
Starting Point Recruitment Limited v Walsall Metropolitan Borough Council
26 April 2024
[2024] EWHC 982 (Comm)
High Court
A company sued another company for stealing their clients and confidential information. The losing company wanted the winning company to post money upfront to cover potential court costs if the losing company lost. The judge refused, saying the suing company had a reasonable chance of recovering and requiring the upfront money would stop the case from going forward.
Key Facts
- •Starting Point Recruitment Limited (Claimant) sued Walsall Metropolitan Borough Council (Defendant) for breach of contract and misappropriation of confidential information.
- •Defendant had stopped using Claimant's services and allegedly poached their workers.
- •Defendant applied for security for costs, arguing Claimant might be unable to pay if they lose the case.
- •Claimant's major client was the Defendant, and the loss of this contract significantly impacted their finances.
- •Claimant provided evidence of efforts to regain financial stability, including new business ventures and cost-cutting measures.
- •The court considered whether the Defendant met the 'gateway' requirement for security for costs and whether it was just to grant security considering all circumstances.
Legal Principles
Security for costs can be ordered if the court believes the claimant will be unable to pay the defendant's costs and it is just to do so.
CPR Part 25.13
The court considers all evidence when assessing if a claimant will be unable to pay costs, not just the defendant's evidence.
Jirehouse Capital v Beller [2008] EWCA Civ 908 at [34]
If granting security for costs would stifle the claim, it should not be granted.
Goldtrail Travel v Onur Air Tasimaclik [2017] UKSC 57
The claimant must provide full and frank disclosure of their financial position and potential sources of funding.
Goldtrail Travel v Onur Air Tasimaclik [2017] UKSC 57
The court can consider the defendant's conduct in contributing to the claimant's impecuniosity when deciding whether to grant security for costs.
Mastermailer Stationery Ltd v Sandison & Ors [2011] EWHC 4304 (Ch)
Outcomes
The Defendant's application for security for costs was refused.
The court found that while the Claimant currently couldn't pay the Defendant's costs, their evidence suggested a reasonable chance of recovery, and granting security would likely stifle the claim. The court also considered the Defendant's alleged conduct in contributing to the Claimant's financial difficulties.