Autumn 2020 dsba.ie Angela Brennan is a senior associate in Matheson’s Commercial Litigation and Dispute Resolution Department. She is a member of the Commercial Committee of the DSBA
and a practical consequence or consequences for the plaintiff. aker stated that the causal connection between the actionable wrongdoing and a plaintiff s impecuniosity re uires a plaintiff to establish, on a prima facie basis, a connection between specific losses claimed and the likely inability to meet the costs of a successful defendant. In aker s view, uinn had established, on a prima facie basis, that had PwC identified the likely impact of the combined e ect of the uarantees, the understatement of the technical provisions and the gifts, uinn could have been in a very di erent financial position.” aker . held that the trial udge came to the correct conclusion that uinn had made out a prima facie case that it might have avoided the compounding of its di culties had it known of the risks inherent in some of the commercial choices it made. n that analysis, uinn had discharged the burden of showing, on a prima facie basis, that the losses it says are attributable to the alleged negligence and breach of duty could prima facie have led it to avoid the financial catastrophe that befell it.” Accordingly, the Court of Appeal held that Quinn had arguably met the test that special circumstances exist.
Balance of Justice between the Parties However, the Court of Appeal held that the matter did not end there. espite the finding of special circumstances, the Court held that it needed to find the balance of justice between the parties. The Court held that, even where special circumstances exist, that does not mean that security will inevitably be refused. In reaching the decision to grant the order for security for costs, the Court placed reliance on the fact that the sum of million to be borne by the individual PwC partners was intrinsically unfair”. hile uinn had the benefit of limited liability, PwC did not. The individual partners would be liable for
these enormous costs.” aker also relied on the fact that the granting of security was unlikely to sti e the present claim as uinn had financial backing for its own costs and therefore, the litigation was likely to continue even if security was to be provided.
Exceptional Public Importance The second special circumstance relied upon by the plaintiff was that the case raised issues of exceptional public importance. The Court of Appeal reversed the igh Court s findings that security should not be granted on this basis. The Court held that the public interest had to be exceptional and the plaintiff bore a heavy burden to establish this because the refusal to make an order would deprive a defendant of an order that it would otherwise be entitled to. The Court found that the interests pursued in this litigation were wholly commercial and the fact that the taxpayer or the State coffers may get the benefit of the litigation was not, in itself, a matter that made the litigation one of exceptional public interest.
Conclusion The amount and mode of security has gone back to the High Court for determination and therefore, despite the award of security for costs, the litigation continues. This decision provides useful guidance as to the evidence required to resist an application for security for costs. It also makes clear, even where the plaintiff can establish that special circumstances exist, that does not mean that security will inevitably be refused as the Court will seek to find the balance of ustice between the parties. In finding this balance, the Court is likely to take into account whether such an order would put an end to the litigation. P
Litigation
ven where the plaintiff can establish that special circumstances exist, that does not mean that security will inevitably be refused as the Court will seek to find the balance of justice between the parties
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