Under Rule 26 of the new Procedural Rules adopted in September of 2023, a Claimant who has his habitual residence outside the European Union or a Member State of the European Union may, at any stage of the claim, be ordered to provide security for costs, even if he may reside temporarily within Cyprus or in a Member State of the European Union. It is understood that low-income foreign workers are exempt from any order to provide security for costs.
In cases of claims raised by persons residing outside of Cyprus or a Member State of the European Union, when the claimant's claim is based on a decision or order of the court the authority to claim from the Claimant to provide security for costs is left to the discretion of the court.
Where a person sues in a representative capacity on behalf of a child or an incapacitated person, under the provisions of any law, that person may, if he is an appellant, be ordered to give security for costs.
If it appears that a person suing is not the actual Claimant, but is suing only as a nominal claimant for the benefit of another person, then that person may be required at any stage of the claim to provide security for insolvency costs or poverty.
Where the court orders the provision of security for costs, it may stay the proceedings until the security for costs is provided and in the event that the security is not provided within the specified time, the court may dismiss the claim.
Where a bond is given as security for costs, it shall, unless the court otherwise orders, be given to the party requesting the security and not to an officer of the court.
Some criteria for security for costs as set by case law (which was based on the procedural rules prior to 2023). It was said that where the Claimant is a foreigner and has no assets in Cyprus which can be disposed of to meet the Defendant's costs, the Court will usually be inclined to grant an order for security for the Defendant's costs, unless special circumstances of the case render the issuance of such an order unjust. The amount of the cost security is at the discretion of the Court and as mentioned in the case of Standard Ltd et al. v. Gold Seal Ship. Co Ltd (1993), the costs must be neither ficticious nor oppressive, in the sense that they would effectively bar recourse to the Court. The security to be ordered can cover expenses incurred up to the given moment and even future expenses.
Relevant also is the timing of the submission of such an application which will be taken into account by the Court because, as stated in the case Union Des Cooperatives Agricoles De Cereales De Semences v. Apak Agro Industries Ld. & Others (No. 2) (1992), it is possible that there may be cases in which a party's delay in filing for security for costs in conjunction with other aggravating factors may lead the Court to reject such a request.
In the end, whether or not to order security for costs is in the end left at the discretion of the Court depending on the circumstances before them.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.