Ackerman v Ackerman & Ors

Under CPR 25.13(2)(g), the relevant question is whether the claimant has taken steps concerning assets that would make a costs order difficult to enforce. The condition is objective; dishonest or reprehensible conduct alone is insufficient, and there is no temporal limit on the relevant steps. The court must then decide whether security is just in all the circumstances, considering motivation, timing, proportionate costs, the claimant’s own and third-party resources, candour, affordability and whether security would stifle a genuine claim. Where resources cannot be quantified because disclosure is incomplete, the court may set a fair estimate of what the claimant can afford. The defendant’s contribution to the claimant’s lack of means is also relevant. Security of £600,000 was ordered, including a first charge of £375,000.

Joseph Ackerman sought relief in proceedings challenging alleged breaches of an agreement and the validity of determinations made by Andrew Thornhill QC in a provisional adjustment report. The BLP defendants applied for security for costs under CPR 25.12 and CPR 25.13(2)(g), relying on transfers of property and money which could hinder enforcement of a costs order. Mr Ackerman accepted that the statutory condition was satisfied but offered security by a charge over property. The central issues were the proportionate costs of the expedited trial, the resources available to Mr Ackerman and his family, the effect of incomplete financial disclosure, and whether additional security would stifle the claim.

1. Gateway and discretion. The application was granted. Under the Civil Procedure Rules 1998, CPR 25.12 and CPR 25.13(1), the court had to identify an applicable condition in CPR 25.13(2) and be satisfied that ordering security was just in all the circumstances. Both the making of the order and its amount were discretionary.
2. Asset-related condition. CPR 25.13(2)(g) required steps concerning the claimant’s assets which would make enforcement of a costs order difficult. The test was objective. Other dishonest or reprehensible conduct was insufficient by itself: Chandler v Brown [2001] CP Rep 103 and Aoun v Bahri [2002] EWHC 29 (Comm). There was no temporal limit on the relevant steps, although motive, intention and timing were relevant to the discretionary stage.
3. Affordability and resources. Impecuniosity did not itself justify security, and the court had to avoid stifling a genuine claim. It had to consider the claimant’s own resources and possible assistance from relatives or other third parties, while scrutinising financial evidence critically. The authorities included Keary Developments Ltd v Tarmac Construction [1995] 3 All ER 534, Brimko Holdings Ltd v Eastman Kodak Co [2004] EWHC 1343 (Ch) and Al-Koronky v Time-Life Entertainment [2006] CP Rep 47.
4. Assessment. The claimant’s estimated costs were disproportionate. A further £800,000 was sufficient for the claim through trial, and the defendants’ proportionate recoverable costs were also estimated at £800,000. Mr Ackerman had access to identified family assistance, although the evidence concerning resources was incomplete. The defendants’ conduct had contributed to his lack of means and was relevant to the exercise of discretion.
5. Order. Security of £600,000 was ordered. £375,000 could be provided by a first charge over 38 Green Lane, with further directions on the timing and form of the balance.

The judgment records an expedited trial order made by Newey J on 4 May 2011. No appeal or earlier appellate decision is identified.