Huscroft v P & O Ferries Ltd

A condition imposed under rule 3.1(3) of the Civil Procedure Rules must be attached to identified relief. The rule does not authorise a free-standing order for security for costs merely because the court is making procedural directions.

The court must identify the condition’s purpose and decide whether it is a proportionate and effective means of achieving that purpose in relation to the relief granted. A conditional security order must not circumvent Part 25. A claimant resident within the jurisdiction or the European Union cannot be required to provide security solely because of impecuniosity; additional circumstances are required.

The claimant sought damages from his former employer for personal injury allegedly sustained while moving a trolley onto a ferry. At a case-management conference, the district judge ordered him to pay £5,000 into court as security for the defendant’s costs, with automatic strike-out for default, while also giving directions for trial.

His first appeal to His Honour Judge Bullimore was dismissed. On a second appeal, permission was granted on the questions whether rule 3.1(3) of the Civil Procedure Rules justified the conditional security order and, if so, whether £5,000 was an appropriate amount. The central issue was the proper scope of the court’s power to attach conditions to an order.

1. Appeal allowed unanimously. Lord Justice Moore-Bick, with whom Lord Justice Elias and Lord Justice Sedley agreed, held that the district judge’s order was not a proper exercise of rule 3.1(3) of the Civil Procedure Rules.

2. Rule 3.1(3) permits the court to grant specified relief on terms. It is directed to the future conduct of the litigation. It does not confer a general power to impose a condition whenever the court happens to make an order. A condition should be expressed as part of the particular order granting the relief to which it relates.

3. Although the power is not confined to cases of repeated procedural default or bad faith, the court must identify its purpose. It must then decide whether the proposed condition is proportionate and effective in relation to the order to which it is attached. Rules 3.1(3) and 3.1(5) address different situations: the latter is directed to unjustified non-compliance, whereas a condition under the former ordinarily controls future conduct.

4. An order under either provision that is, in substance, security for costs must not be used to evade Part 25. In particular, a personal claimant resident within the jurisdiction or another European Union member state cannot be required to give security merely because he is impecunious. Further circumstances must justify the burden.

5. Here, the payment order was free-standing and unrelated to any relief sought by the claimant. The routine case-management directions gave no proper basis for making payment a condition. The claimant’s criticised conduct had not been found to cause significant wasted costs, and payment was not an effective means of securing future compliance. The order therefore improperly obtained security which the defendant could not have obtained under Part 25.

6. Although unnecessary to the disposal of the appeal, the court considered that £5,000 would not itself have been excessive on the evidence. A party who asserts inability to provide security must explain his financial position with evidence; an unsubstantiated assertion is insufficient.

• Court of Appeal (Civil Division): Allowed the claimant’s second appeal in [2010] EWCA Civ 1483 and set aside the conditional security-for-costs order.
• Sheffield County Court (His Honour Judge Bullimore): Dismissed the claimant’s first appeal from the district judge. No citation is stated in the judgment.
• Sheffield County Court (District Judge Babbington): Ordered the claimant to pay £5,000 into court as security for costs, with strike-out in default, while giving case-management directions.