PICKERING V THOMAS MANSFIELD SOLICITORS LIMITED [2025] EWHC 3021 (SCCO)
Costs Judge Nagalingam confirms solicitors may seek security for costs in Solicitors Act assessments, but dismisses application where client’s conversion of liquid funds into unencumbered property and debt repayment did not constitute putting assets beyond reach under CPR 25.27(b)(vi).
An application for security for costs under CPR 25.26 is procedurally permissible in Solicitors Act 1974 assessment proceedings because the proceedings as a whole constitute a “claim” for the purposes of the rule, even though they are initiated by the party who owes money to the solicitor. [32-34, 37-40, 44]
For an order for security for costs to be made under CPR 25.27(b)(vi), the applicant must demonstrate that the claimant has taken positive steps in relation to their assets that would make it difficult to enforce a costs order; the mere conversion of liquid funds into other forms of property, such as paying down a mortgage or purchasing real estate, does not of itself satisfy this condition if the new assets remain available for enforcement. [61, 63, 69-70, 87, 94]
The court will not infer that a party has taken steps to put assets beyond reach under CPR 25.27(b)(vi) where the applicant has not utilised available procedural mechanisms, such as a request for further information under Part 18 or an application for specific disclosure, to obtain evidence supporting such an inference. [46-47, 59, 85]
When considering whether to attach an automatic sanction for non-compliance to an order under CPR 3.1(3), the court will generally prefer to order payment by a certain date with liberty to apply for an unless order in the event of default, rather than imposing an immediate sanction, even where there has been a prior history of late payment. [16-17]
The court’s discretion to order security for costs under CPR 25.27(a) must be exercised justly, taking into account all circumstances, including substantial payments already made by the respondent on account, the imminence of the final hearing, and the reasonableness of the applicant’s own estimated costs of the proceedings. [95-97, 99]
