Meridian International Services Ltd v Richardson & Ors

Security for an appeal’s costs may be ordered only where it is just in all the circumstances. That enquiry governs both whether security is ordered and its amount. Where the respondent’s costs include a conditional-fee success uplift, uncertainty about whether that uplift will become payable may make security for it unjust on the available evidence.

In considering whether security would stifle a corporate appeal, the court must consider the ability of those behind the company to fund it, as well as the company’s own resources.

Meridian’s claim had been dismissed in the Chancery Division, with consequential orders for delivery up, damages and costs in favour of the defendants. Meridian obtained permission to appeal.

The respondents then applied for security for their appeal costs. Meridian accepted that it could not pay those costs if unsuccessful. The dispute concerned the just amount of security, including whether it should cover a 33% conditional-fee success uplift and whether the existing security for the trial costs could assist.

The central issue was what sum, if any, it was just to require as security for the respondents’ costs of the appeal.

Decision

1. Application granted. Rimer LJ ordered Meridian to provide security for the respondents’ appeal costs in the sum of £53,000.

2. Under Civil Procedure Rules Part 25.13(1)(a), the court could make an order only if satisfied that it was just in all the circumstances. That discretion concerned both the making of an order and the amount required.

3. The respondents’ estimate of £105,610.74 included a 33% conditional-fee success uplift. Applying a broad-brush assessment, the court treated £30,000 as fair for solicitors’ past and future costs and £40,000 as fair for leading and junior counsel, a total of £70,000 including the uplift.

4. On the material before the court, it could be unjust to require security for the uplift. The conditional-fee agreements had not been disclosed and there was no evidence identifying when the respondents would become personally liable for the success fees. Security was therefore fixed at the lesser sum of £53,000.

5. There was no evidence that this order would stifle the appeal. In accordance with Keary Developments Ltd v Tarmac Construction Ltd and Another [1995] 3 AER 534, the court considered the ability of those behind the corporate appellant to fund the security. There was no suggestion that its sole shareholder and shadow director could not do so.

• Court of Appeal (Civil Division) — Meridian had permission to appeal. On the respondents’ application, the court ordered Meridian to provide £53,000 security for the respondents’ appeal costs: [2008] EWCA Civ 490.

• Chancery Division — Mr Robert Ham QC, sitting as a deputy judge, dismissed Meridian’s claim and made orders for delivery up, an enquiry as to damages, and costs in the defendants’ favour. The subsequent damages enquiry was settled by consent.