Companies Act 2014 section 52

Security for costs

Section 52 deals with the power of a court to require a company acting as plaintiff in legal proceedings to provide financial security for the defendant's costs where there is reason to believe the company cannot pay those costs if it loses.

• Where a company brings legal proceedings as plaintiff, the court may require it to provide security for the defendant's costs
• The requirement applies where credible evidence suggests the company may be unable to pay the defendant's costs if the defence is successful
• The judge may halt all proceedings until the required security is provided
• This provision protects defendants from the risk of being unable to recover their legal costs from an impecunious plaintiff company