Security for costs orders have long provided peace of mind for defendants since they require a claimant to pay an amount of money into court to cover their costs. But a recent Court of Appeal decision in the ongoing Ingenious Litigation has turned the tide, reversing the trend towards cross-undertakings in damages being granted in return for putting up security for costs. As a result, the decision has important implications, both for applicants seeking security and for third-party litigation funders.

So what does a security for costs order entail? Typically, a defendant can seek security for costs when they are concerned that the claimant will be unable to pay their costs in the event that the claim is unsuccessful. The relevant procedure for applying for security, and the conditions that need to be satisfied, are set out in Part 25 of the Civil Procedure Rules (CPR).