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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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We are the Claimant in a case against our former MD, who

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Hi - We are the Claimant in a case against our former MD, who left our company and refused to pay towards liabilities that he personally and as a director of his new company, agreed to pay towards prior to leaving.
His solicitor has written asking us to provide evidence to avoid them making an Application for Security of Costs, as he says that he thinks we wont be able to pay his costs. We have written back saying that we are are under no obligation to provide any evidence, it is him who has to evidence that we are in a parlous state - which in reality we are not.
We think that the Application would be turned down, on the grounds that he was involved in screwing up our company as MD and we have rescued it (well) since he left, and besides the only evidence he has are 2014 accounts, when he was MD and are poor, and my understanding is that the defendant needs to provide the court with evidence to make the application.
They have written again to us to say that they want evidence, or they will apply for the security.
Question: Are we under any obligation legally to do this at this stage? As we will gladly show any security hearing that we can more than pay his costs.
Hello my name is ***** ***** I will help you.How much is the value of the claim please?Alex
Customer: replied 1 year ago.
Hi Alex - it was originally circa £38k and we have increased this to £75k as his employee, our former financial controller, stole clients from us, after he signed a non-solicitation clause. The additional is for 10 years of the clients fee income to our company that he took.
Customer: replied 1 year ago.
His costs statement was about £22k
Thanks. Your understanding of the claim is a little confused. If you bring a claim YOU have to prove it. It is not for the Defendant to disprove it. You must prove the claim on balance, the burden is on you.Further under the Civil Procedure Rules both parties are under a duty to disclose documents which support their case or adversely affect it. Therefore when the Solicitor asks for evidence if you refuse to supply it then they can apply to the court for an order.Can I clarify anything for you about this today please?Alex
Its rule 31.6:31.6 Standard disclosure requires a party to disclose only–(a) the documents on which he relies; and(b) the documents which –(i) adversely affect his own case;(ii) adversely affect another party’s case; or(iii) support another party’s case; and(c) the documents which he is required to disclose by a relevant practice direction.Alex
Customer: replied 1 year ago.
Alex - you are misunderstanding my original question and clearly did not read it. The defendant is aiming to apply for security of costs, my question is straight forward. Are we (the Claimant company) under any legal obligation at all to provide evidence to the Defendants solicitor that the Claimant is in a financially sound position??
Customer: replied 1 year ago.
Its the Defendant looking to try to get an Application for Security for Costs against us.
Yes they are entitled to do that if they dont think you can pay for their costs.The court will want to look at the accounts, so look at P&L, Balance sheet etc. They will probably need a forensic accountant to look at the accounts to make sure you can afford to see the claim through.But they are entitled to apply for security if:Conditions to be satisfied25.13(1) The court may make an order for security for costs under rule 25.12 if –(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and(b)(i) one or more of the conditions in paragraph (2) applies, or(ii) an enactment permits the court to require security for costs.(2) The conditions are –(a) the claimant is –(i) resident out of the jurisdiction; but(ii) not resident in a Brussels Contracting State, a State bound by the Lugano Convention, a State bound by the 2005 Hague Convention or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982 7;(c) 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;(d) the claimant has changed his address since the claim was commenced with a view to evading the consequences of the litigation;(e) the claimant failed to give his address in the claim form, or gave an incorrect address in that form;(f) the claimant is acting as a nominal claimant, other than as a representative claimant under Part 19, and there is reason to believe that he will be unable to pay the defendant’s costs if ordered to do so;(g) the claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.(Rule 3.4 allows the court to strike out a statement of case and Part 24 for it to give summary judgment)Does that clarify?Alex
So yes, you are required to provide evidence to show you can pay the costs. Otherwise an application can be made.Does that clarify?Alex
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