Full case report

Al-Koronky v Time-Life Entertainment Group Ltd & Another (QB)

Reference [2005] EWHC 1688 (QB)
Court Queen's Bench Division

Judge Eady J

Date of Judgment 29 Jul 2005


Summary

Libel – Security for Costs – Claimants resident in the Sudan – Enforcement of costs – CPR Part 25.12 – CFAs – After the event insurance (ATE) – Discretion


Facts

The Claimants, the former acting Ambassador of the Sudan in London and his wife, brought proceedings for libel contending that a book published by the Defendants alleged that they had kept a slave, Mende Nazer, whilst resident in London. The Defendants pleaded a defence of justification and, because the Claimants had returned to the Sudan, sought security for their costs. The Claimants filed a large number of witness statements in opposition to the application and contended that the defence of justification was highly likely to fail and that security for costs should not be granted.


Issue

(1) Whether security for costs should be granted; and (2) if so, in what sum.


Held

(1) It was not possible, at this interim stage, to conclude that the defence of justification was highly likely to fail. The fate of the justification defence would depend on an assessment of witnesses; (2) Applying Nasser v United bank of Kuwait [2001] 1 WLR 1868, this was an appropriate case for security. The factors taken into account included: (a) enforcement of a costs order in the Sudan would be practically impossible; (b) the Claimants ATE insurance policies were admittedly worthless; (c) the first Claimant had delayed paying an order for costs made in his earlier claim against the Sunday Telegraph; (d) the Claimants had failed to satisfy the Court that their claim would be stifled by an order for security; (3) In the circumstances the appropriate sum to be provided by security was £375,000.


Comment

The regime for security for costs changed substantially after the implementation of the Human Rights Act 1998. Although the qualifying criteria under CPR Part 25.13 have remained unchanged, the Court of Appeal’s decision in Nasser has significantly altered the basis on which the court will exercise its discretion to order security. It is now impermissible to order security simply on the grounds that the Claimant is resident outside the relevant zone (essentially a contracting state). The Court can only proceed on the basis of an analysis of what difficulties a defendant would likely encounter attempting to enforce an order for costs against the Claimant in his/her country of residence. If, as in this case, the enforcement is likely to be an impossibility an order for up to the full security may properly be made. Countries where there is no real difficulty in enforcement will justify only an order for the increased costs of enforcement rather than full security.


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Instructing Solicitors

Carter-Ruck for the Claimants; Reynolds Porter Chamberlain for the Defendants