Olatawura v Abiloye

The court may make an order requiring payment into court which is tantamount to security for costs outside Civil Procedure Rules 1998 Part 25. The power must be exercised cautiously. The court must first consider whether the order would unfairly prevent the party from pursuing the litigation, with access to the court under Article 6 being a prime consideration.

Relevant matters include the party’s ability to pay, conduct of the proceedings, compliance with procedural obligations, and the apparent strength of the claim or defence. Repeated procedural default or want of good faith may justify security, but security should not ordinarily be imposed merely as a penalty for a breach. A weak case alone will rarely justify such an order.

The claimant, a Nigerian lawyer, brought County Court proceedings claiming remuneration from his former employer. The defendant sought summary judgment. Although the District Judge held that the claim did not have no real prospect of success, she ordered the claimant to pay £5,000 into court as security for costs, with dismissal of the claim if he failed to comply.

A Circuit Judge dismissed the claimant’s appeal. The claimant paid the money into court and brought a second appeal to the Court of Appeal. The central issues were whether the CPR permitted security-for-costs orders outside Part 25, Section II, and whether the order was properly made on the facts.

1. Appeal dismissed. Lord Justice Simon Brown, with whom Lord Justice Dyson agreed, held that the CPR conferred jurisdiction to make orders tantamount to security for costs outside Part 25, Section II. The conditional-order provisions in the Practice Direction supplementing Part 24, and rules 3.1(3) and 3.1(5), expressly contemplated payment into court in circumstances beyond the ordinary Part 25 regime.

2. Before making security for costs in any case, the court must be alert to the risk of denying access to justice. The party’s ability to pay is a prime consideration, particularly in light of Article 6 of the European Convention on Human Rights. The court must balance that consideration against the opposing party’s risk of irrecoverable costs.

3. The wider jurisdiction was not a general punitive power. A party becomes amenable to security under rule 3.1(5), and perhaps rule 3.1(2)(m), where the party has regularly flouted proper procedure so as to inflate costs, or has shown want of good faith. Good faith means a willingness to litigate a genuine claim or defence economically and expeditiously in accordance with the overriding objective.

4. Nor should a conditional security order routinely follow from a weak claim or defence. The court should be reluctant to assess merits beyond deciding whether there is no real prospect of success. Orders based solely on weakness of the case should be rare.

5. The District Judge had properly considered that the payment would not stifle the claim. The claimant’s limited prospects, wholly unreasonable conduct, and likely difficulty in enforcing an adverse costs order together justified the £5,000 order. The appeal was dismissed with costs, subject to detailed assessment if not agreed.

• Court of Appeal (Civil Division): dismissed the second appeal and upheld the conditional order for £5,000 security for costs: [2002] EWCA Civ 998.

• Central London County Court, Circuit Judge: dismissed the claimant’s appeal from the District Judge’s order.

• Central London County Court, District Judge: refused the defendant’s application for summary judgment but ordered the claimant to provide £5,000 security for costs, failing which the claim would be dismissed.