April 29, 2026
The proceedings arise from a high value residential construction contract entered into in April 2021 under a standard RIBA domestic building contract. Larsen Limited, the contractor, claims unpaid interim valuations, additional sums arising from variations and loss of profit following suspension and termination of the works. The defendants, the owners of the property, deny liability and counterclaim for defective and incomplete works, liquidated damages for delay and overpayments, supported by an extensive expert report and Scott Schedule.
The defendants applied for security for costs contending that Larsen Limited was impecunious and would be unable to satisfy any adverse costs order. Reliance was placed on earlier findings in Reeve Gray v Larsen Limited, correspondence raising concerns about solvency and insurance cover, and affidavit evidence from the company’s sole director acknowledging limited working capital and an inability to meet substantial costs.
The plaintiff resisted the application, arguing that security would be oppressive and risk stifling its claim, that the counterclaim distorted the costs position, and that retention monies should be treated as effective security. It also relied on the interlocking nature of the claim and counterclaim, contending that much of the defendants’ anticipated expenditure related to their own affirmative case rather than the defence of the claim.
The Court undertook a detailed review of the applicable authorities emphasising that there is no presumption against ordering security from Jersey resident corporate plaintiffs, but that the discretion must be exercised by balancing injustice on both sides. Particular weight was placed on the plaintiff’s failure to provide any meaningful accounting evidence to substantiate claims of hardship, despite having had ample opportunity to do so, and the unexplained inconsistency between an earlier offer to provide substantial security and its later asserted inability to do so.
On the facts, the Court concluded that the claims and counterclaims were closely intertwined and of broadly similar value, such that virtually all of the defendants’ anticipated costs related to defending the claim. Retention monies were rejected as a form of security, as they would likely be absorbed by any successful counterclaim. Delay in bringing the application was also rejected as a bar, the issue having been raised at an early stage and revisited once settlement efforts failed.
Exercising its discretion, the Court ordered the plaintiff to provide security for costs in the sum of £100,000, limited to costs incurred and reasonably anticipated up to the evidential stage, leaving open the possibility of further security being considered later. The figure was deliberately calibrated to avoid stifling the claim while providing meaningful protection to the defendants.
The decision reinforces that corporate plaintiffs must be prepared to substantiate claims of financial hardship with proper evidence if resisting security for costs. It also illustrates the Court’s willingness to adopt a staged, proportionate approach in complex construction disputes, and underscores the forensic importance of early engagement with solvency, insurance and funding issues.
The proceedings arise from a high value residential construction contract entered into in April 2021 under a standard RIBA domestic building contract. Larsen Limited, the contractor, claims unpaid interim valuations, additional sums arising from variations and loss of profit following suspension and termination of the works. The defendants, the owners of the property, deny liability and counterclaim for defective and incomplete works, liquidated damages for delay and overpayments, supported by an extensive expert report and Scott Schedule.
The defendants applied for security for costs contending that Larsen Limited was impecunious and would be unable to satisfy any adverse costs order. Reliance was placed on earlier findings in Reeve Gray v Larsen Limited, correspondence raising concerns about solvency and insurance cover, and affidavit evidence from the company’s sole director acknowledging limited working capital and an inability to meet substantial costs.
The plaintiff resisted the application, arguing that security would be oppressive and risk stifling its claim, that the counterclaim distorted the costs position, and that retention monies should be treated as effective security. It also relied on the interlocking nature of the claim and counterclaim, contending that much of the defendants’ anticipated expenditure related to their own affirmative case rather than the defence of the claim.
The Court undertook a detailed review of the applicable authorities emphasising that there is no presumption against ordering security from Jersey resident corporate plaintiffs, but that the discretion must be exercised by balancing injustice on both sides. Particular weight was placed on the plaintiff’s failure to provide any meaningful accounting evidence to substantiate claims of hardship, despite having had ample opportunity to do so, and the unexplained inconsistency between an earlier offer to provide substantial security and its later asserted inability to do so.
On the facts, the Court concluded that the claims and counterclaims were closely intertwined and of broadly similar value, such that virtually all of the defendants’ anticipated costs related to defending the claim. Retention monies were rejected as a form of security, as they would likely be absorbed by any successful counterclaim. Delay in bringing the application was also rejected as a bar, the issue having been raised at an early stage and revisited once settlement efforts failed.
Exercising its discretion, the Court ordered the plaintiff to provide security for costs in the sum of £100,000, limited to costs incurred and reasonably anticipated up to the evidential stage, leaving open the possibility of further security being considered later. The figure was deliberately calibrated to avoid stifling the claim while providing meaningful protection to the defendants.
The decision reinforces that corporate plaintiffs must be prepared to substantiate claims of financial hardship with proper evidence if resisting security for costs. It also illustrates the Court’s willingness to adopt a staged, proportionate approach in complex construction disputes, and underscores the forensic importance of early engagement with solvency, insurance and funding issues.
The proceedings arise from a high value residential construction contract entered into in April 2021 under a standard RIBA domestic building contract. Larsen Limited, the contractor, claims unpaid interim valuations, additional sums arising from variations and loss of profit following suspension and termination of the works. The defendants, the owners of the property, deny liability and counterclaim for defective and incomplete works, liquidated damages for delay and overpayments, supported by an extensive expert report and Scott Schedule.
The defendants applied for security for costs contending that Larsen Limited was impecunious and would be unable to satisfy any adverse costs order. Reliance was placed on earlier findings in Reeve Gray v Larsen Limited, correspondence raising concerns about solvency and insurance cover, and affidavit evidence from the company’s sole director acknowledging limited working capital and an inability to meet substantial costs.
The plaintiff resisted the application, arguing that security would be oppressive and risk stifling its claim, that the counterclaim distorted the costs position, and that retention monies should be treated as effective security. It also relied on the interlocking nature of the claim and counterclaim, contending that much of the defendants’ anticipated expenditure related to their own affirmative case rather than the defence of the claim.
The Court undertook a detailed review of the applicable authorities emphasising that there is no presumption against ordering security from Jersey resident corporate plaintiffs, but that the discretion must be exercised by balancing injustice on both sides. Particular weight was placed on the plaintiff’s failure to provide any meaningful accounting evidence to substantiate claims of hardship, despite having had ample opportunity to do so, and the unexplained inconsistency between an earlier offer to provide substantial security and its later asserted inability to do so.
On the facts, the Court concluded that the claims and counterclaims were closely intertwined and of broadly similar value, such that virtually all of the defendants’ anticipated costs related to defending the claim. Retention monies were rejected as a form of security, as they would likely be absorbed by any successful counterclaim. Delay in bringing the application was also rejected as a bar, the issue having been raised at an early stage and revisited once settlement efforts failed.
Exercising its discretion, the Court ordered the plaintiff to provide security for costs in the sum of £100,000, limited to costs incurred and reasonably anticipated up to the evidential stage, leaving open the possibility of further security being considered later. The figure was deliberately calibrated to avoid stifling the claim while providing meaningful protection to the defendants.
The decision reinforces that corporate plaintiffs must be prepared to substantiate claims of financial hardship with proper evidence if resisting security for costs. It also illustrates the Court’s willingness to adopt a staged, proportionate approach in complex construction disputes, and underscores the forensic importance of early engagement with solvency, insurance and funding issues.
The proceedings arise from a high value residential construction contract entered into in April 2021 under a standard RIBA domestic building contract. Larsen Limited, the contractor, claims unpaid interim valuations, additional sums arising from variations and loss of profit following suspension and termination of the works. The defendants, the owners of the property, deny liability and counterclaim for defective and incomplete works, liquidated damages for delay and overpayments, supported by an extensive expert report and Scott Schedule.
The defendants applied for security for costs contending that Larsen Limited was impecunious and would be unable to satisfy any adverse costs order. Reliance was placed on earlier findings in Reeve Gray v Larsen Limited, correspondence raising concerns about solvency and insurance cover, and affidavit evidence from the company’s sole director acknowledging limited working capital and an inability to meet substantial costs.
The plaintiff resisted the application, arguing that security would be oppressive and risk stifling its claim, that the counterclaim distorted the costs position, and that retention monies should be treated as effective security. It also relied on the interlocking nature of the claim and counterclaim, contending that much of the defendants’ anticipated expenditure related to their own affirmative case rather than the defence of the claim.
The Court undertook a detailed review of the applicable authorities emphasising that there is no presumption against ordering security from Jersey resident corporate plaintiffs, but that the discretion must be exercised by balancing injustice on both sides. Particular weight was placed on the plaintiff’s failure to provide any meaningful accounting evidence to substantiate claims of hardship, despite having had ample opportunity to do so, and the unexplained inconsistency between an earlier offer to provide substantial security and its later asserted inability to do so.
On the facts, the Court concluded that the claims and counterclaims were closely intertwined and of broadly similar value, such that virtually all of the defendants’ anticipated costs related to defending the claim. Retention monies were rejected as a form of security, as they would likely be absorbed by any successful counterclaim. Delay in bringing the application was also rejected as a bar, the issue having been raised at an early stage and revisited once settlement efforts failed.
Exercising its discretion, the Court ordered the plaintiff to provide security for costs in the sum of £100,000, limited to costs incurred and reasonably anticipated up to the evidential stage, leaving open the possibility of further security being considered later. The figure was deliberately calibrated to avoid stifling the claim while providing meaningful protection to the defendants.
The decision reinforces that corporate plaintiffs must be prepared to substantiate claims of financial hardship with proper evidence if resisting security for costs. It also illustrates the Court’s willingness to adopt a staged, proportionate approach in complex construction disputes, and underscores the forensic importance of early engagement with solvency, insurance and funding issues.