Monday 4 August 2008

UK: England and Wales: security for costs and unlimited companies

Civil Procedure Rule 25.13 provides that the court may make an order for security for costs where, inter alia, "the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant's costs if ordered to do so". 

Does this Rule apply to unlimited companies or is it restricted to limited companies? This question has been considered by the Court of Appeal in Jirehouse Capital & Anor v Beller & Anor [2008] EWCA Civ 908, in which it was unanimously held that Rule 25.13 applies to unlimited and limited liability companies. Arden LJ observed (para. [19]):

CPR 25.13(2)(c) provides that the court may make orders for security against "companies", without distinction ... I do not accept the argument that to include unlimited companies is unprincipled".

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