A party making a claim against a leading dispute resolution firm will have to stump up a substantial sum to be allowed to pursue it.
Edwin Coe LLP applied for security for costs on the basis that claimant Fortress Lending would be unable to pay its costs if the claim failed.
Ruling in Fortress Lending Fund Subsidiary Designated Activity Company v Edwin Coe LLP & Ors, Mr Justice Andrew Baker agreed that the published accounts of the claimant provided real reason to believe it would be unable to meet a costs order.
Representatives for Edwin Coe pointed out there was no evidence of the financial position of Fortress since the audited accounts for the year-end 2024.
The claimant, which resisted the application, also failed to identify any source for the information it was providing about its financial status.
The judge said the accounts presented suggested a company with only illiquid assets, essentially matched by liabilities, with very limited cash relative to a potential costs order for up to £700,000.
Fortress Lending had maintained that almost $2bn was ‘available to be drawn at the company’s discretion’, but the judge deemed that its funding structure for this claim was not persuasive for removing any doubt about the ability to meet a substantial costs award.
‘There is the real concern as to the ability of the defendants to be satisfied on their costs entitlement if they achieve a victory at trial,’ he added. ‘In circumstances where the application was intimated at the appropriate early point in the proceedings and brought on for hearing, security should be ordered.’
The security ordered was set at £600,000. Such security has to be provided in full by 3 July, and the claimant would have to seek the ‘indulgence’ of a time extension if that is looking unlikely.
Edwin Coe can apply for the claim to be struck out if the order for security for costs is not met in full and on time.
