A large number of applications for security for costs against plaintiffs resident in EU member states are being abandoned because of a recent Court of Appeal decision.

In John Fitzgerald v Bryn Lloyd Williams [1996] The Times, 3 January, the court found that a plaintiff should not usually be obliged to provide security.

It is now clear that only in exceptional circumstances may security for costs be ordered against an individual plaintiff resident in a member state party to the Brussels Convention.In Fitzgerald, 81 of the 87 plaintiffs were ordinarily resident in Eire.

The question was whether the Irish plaintiffs had rights in EU law which the English court had to respect, by holding that it has no jurisdiction to make an order for security against them or, if it c ontinued to have jurisdiction, by refraining from the exercise of its discretion to make an order against them.

The Court of Appeal asked the Attorney-General to appoint an amicus curiae.The judge at first instance had made an order for security for costs against the plaintiffs under RSC ord 23 r 1(1).

This provides: 'Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the court (a) that the plaintiff is ordinarily resident out of the jurisdiction .

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then if, having regard to all the circumstances of the case, the court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just.' The Court of Appeal held unanimously that no English court should ever exercise its discretion under ord 23 r 1(1)(a) to order security to be given by an individual plaintiff who is a national of, and resident in, another member state which is party to the Brussels Convention 1968, particularly in the absence of very cogent evidence of substantial difficulty in enforcing a judgment in that other member state.Fitzgerald showed not that enforcement in Ireland was difficult but that it was no harder than in England and Wales.

The plaintiffs argued that an order for security for costs against them would contravene art 6 of the EU Treaty which provides that discrimination on grounds of nationality shall be prohibited.

In Berkeley Administration Inc v McClelland [1990] 2 QB 407 the Court of Appeal concluded that since ord 23 r 1(1)(a) related to residence and not nationality it did not discriminate, even covertly, on the grounds of nationality and so did not offend against the EU Treaty.

However, the plaintiffs in Fitzgerald asked the Court of Appeal to reconsider the decision in Berkeley in the light of the decision of the European Court of Justice (ECJ) in Mund & Fester v Hatrex International Transport 1994 ECR 1-467 (case C 398/93).Mund & Fester's application for a seizure order was dismissed, the court holding that the relevant provision of German law was no longer applicable to the enforcement of judgments in states which were party to the Brussels Convention.

This provided inter alia that: 'The fact that judgment is to be enforced abroad shall be considered sufficient grounds for a seizure order'.Mund & Fester appealed to a higher German court, which made a reference to the ECJ under art 177.

The ECJ decided that: the German law provision fell within the ambit of the EU Treaty; it amounted to a covert form of discrimination; a presumption of difficulty in enforcing a judgment in a non-member country was legitimate but not justified where enforcement was to take place in a member state party to the Brussels Convention; and that, as the German provision appeared to consider the risks and difficulties of enforcement to be sure and certain solely by reason of enforcement taking place in another member state it followed that the national provision was not justified by objective circumstances.In Fitzgerald the Court of Appeal considered the matter of security for costs in the light of Mund & Fester and held that: ord 23 r 1(1)(a) came within the scope of the Treaty provisions; arts 6 and 220 of the EU Treaty conferred rights which are directly enforceable in member states following legislative implementation of the Brussels Convention; ord 23 r 1(1)(a) is discriminatory in that it empowers the court to make orders against plaintiffs ordinarily resident out of the jurisdiction; and that the discrimination was based on nationality.The Court of Appeal accepted that the discrimination for which the rule provided was based on ordinary residence, not nationality.

But the Master of the Rolls drew a close analogy with Mund & Fester.

He said that just as most German judgments enforced outside Germany would not be against Germans, so most plaintiffs in England ordinarily resident outside the jurisdiction would not be British.

As the German provision had been held to be covertly discriminatory on grounds of nationality, so did ord 23 r 1(1)(a).The court also held that it did not have to decide whether discrimination on grounds of nationality could ever be justified by objective circumstances in relation to those who are nationals of and resident in other member state parties to the Convention.

This was because in Fitzgerald there were no objective circumstances, the only evidence demonstrating that enforcement in Ireland was no more difficult than in England.