A recent judgment reminds us how, in expert hands, court procedures can be turned to real advantage for those facing the uncertain prospect of litigation.

Andy Murray’s former advisor, David Cody, issued (and “served”) proceedings against the two time grand slam tennis champion alleging breach of contract. Although the proceedings were brought in the English High Court, Mr Cody in fact lived in Texas, USA.

Consequently, Andy Murray’s legal team decided to apply for security for costs. In simple terms, an order for security for costs offers protection from the risks of an opponent not being able to pay your litigation costs, if ordered to do so, by requiring the opponent to pay money into court. There were two points that the Judge had to consider in this matter when exercising his discretion:

  1. The Court should not discriminate against those outside of the jurisdiction; and
  2. Any decision must be based on objectively justified grounds relating to the obstacle of enforcement in the context of Mr Cody and Texas law.

The High Court went ahead and ordered that Mr Cody pay USD$30,000 into Court on the basis that Texas law provided a number of “liberal exemptions from execution……for several items of real and personal property” and therefore it was unclear (without his first having paid this money into Court in England) whether Mr Cody would have assets available to satisfy any costs order made against him.

This provides us with a useful example of a tactical weapon that can be used to protect your position when you’re engaged in litigation commenced by a foreign party, where enforcement of any costs order could be difficult. Not only that, but security for costs can be, and regularly is, used to ward off litigation on the basis of a claimant’s inability to pay, or even just to force your opponent to reconsider the strength of their case. It can be a real match winner, if used correctly.

It is important to consider your opponent’s financial circumstances at the outset of any litigation because if your dispute does go all the way, and you are successful, you will of course want to be able to recover your legal costs.

The link to the Judgment can be found at: David Cody v Andrew Murray and others [2013] EWHC 3448 (Ch), (19 November 2013).