CAYMAN ISLANDS Law and Practice Contributed by: Sam Dawson, Peter Sherwood and Denis Olarou, Carey Olsen
4.5 Applications for Security for Defendant’s Costs A defendant (including a defendant to a counterclaim) can apply for an order that the plaintiff must pay a sum of money as security for the defendant’s costs. Security may be ordered, if the court thinks it just to do so, in a variety of circumstances, including where the plaintiff: • is ordinarily resident outside the jurisdiction and the defendant is likely to incur additional costs in enforcing any costs awards against the plaintiff or where there is a real risk of non-enforcement of any costs award; • has failed to state its address in the writ or stated it incorrectly; • changed its address during the course of proceed- ings in order to evade the consequences of litiga- tion; • has no business or assets in the jurisdiction; • is a Cayman Islands company which, there is reason to believe, has insufficient assets to pay the costs of the defendant should the defendant suc- ceed at trial; or • is a nominal plaintiff (other than one suing in a representative capacity) suing on behalf of another person and there is reason to believe that that per- son will be unable to pay costs of the defendant. If one of the criteria is met, the court may make an order for security. There could be a variety of circum- stances and reasons why the court might refuse to do so. For example: • if the plaintiff’s impecuniosity was caused by the defendant’s actions; • if an order for security for costs would stifle a meri- torious claim; or • delay in making the application. 4.6 Costs of Interim Applications/Motions The usual rule on costs is that they follow the event; ie, the loser pays. However, the court has wide discre- tion on the question of costs and can make a variety of alternative orders. In general, the rule is no different in relation to the costs of interim applications. However, there are some
• judgment in default of acknowledgement of service or defence (see 3.6 Failure to Respond ); • summary judgment (see 4.2 Early Judgment Appli- cations ); • disposal on a point of law (see 4.2 Early Judgment Applications ); • strike out (see 4.2 Early Judgment Applications ); and • jurisdictional challenge. A defendant must launch any jurisdictional challenge within the time limited for service of defence (Order 12, Rule 8 of the Grand Court Rules). If the challenge succeeds, the court will decline jurisdiction and the proceedings will end. If the challenge fails, the claim will proceed, but the defendant will be granted further time to file a further acknowledgement of service and to serve a defence in due course. There are a variety of potential grounds for challenging jurisdiction, including: • an irregularity in the writ or service thereof; • an irregularity in any order giving leave to serve the writ out of jurisdiction; • an irregularity in any order extending the validity of the writ for the purpose of service; and • forum non conveniens. 4.4 Requirements for Interested Parties to Join a Lawsuit Interested parties not named in a lawsuit may inter- vene in it with leave of the court. The party wishing to join must apply for joinder and support its application by an affidavit explaining its interest in the matters in dispute (Order 15, Rule 6 of the Grand Court Rules). The court may grant the application if: • the joinder of the proposed intervener is necessary to ensure that all matters in dispute are effectually and completely determined; or • the matter raises an issue between the proposed intervener and any party to the matter which the court considers it would be just and convenient to determine between the intervener and the party at the same time as between the parties.
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