Security For Costs - Moving The Goal Posts

The mere mention of Leeds United Football Club brings memories flooding back of Saturday afternoons at the ground watching Brian Flynn and Ray Hankin weave their magic. The recent foray of the Club into litigation in Jersey not only stirred those memories but has also resulted in a significant shift in the security for costs position in Jersey. The judgment of the Court of Appeal in an appeal brought by the Club has potentially far reaching effects and may make it easier for litigants not resident in this jurisdiction to pursue claims against Jersey companies.

The appeal was from a decision of the Deputy Bailiff who had ordered Leeds United Football Club to put up security for the defendant's costs in the sum of £263,000. The defendant to the proceedings was AdMatch Ltd, a Jersey company that had acted as the Club's agent for the sale of match and season tickets by credit card. The Club paid the security into court as it was ordered to do and then appealed the Deputy Bailiff's decision to the Court of Appeal (presided over by Jonathan Sumption QC).

The starting point for any application for security for costs in Jersey is Rule 4/1(4) of the Royal Court Rules. This states that "any plaintiff may be ordered to give security for costs".

Whilst the court's discretion to order security for costs is unlimited, the Court of Appeal was careful to point out that in practice the principles applied in this jurisdiction have developed by analogy with those applied in England. Indeed this case raised serious questions of the circumstances in which security should be given and ultimately resulted in the removal of the "blanket presumption" that such protection is appropriate purely on the basis that the plaintiff is resident out of the jurisdiction. In a reasoned judgment, the Court of Appeal considered the legal principles to be applied in applications of this nature and also the extent to which the Human Rights (Jersey) Law 2000 would apply in cases such as these.

Human Rights

The Court of Appeal looked first of all at the decision of the English Court in Sir Lindsay Parkinson & Co Ltd v. Triplan Ltd [1973] QB 609 which started from the premise that a defendant ought not to have to pursue a foreign resident plaintiff abroad for his costs. In that case, the court stated that "The mere fact of his non residence was enough to make it just to order security, unless (i) the plaintiff could be seen, even at an interlocutory stage, to have a high probability...