What Happens If The Plaintiff Refuses To Pay The Security For Costs?

Gregory M. Sidlofsky, Counsel to Charles B. Wagner & Associates, discusses what happens if the plaintiff refuses to pay the security for costs.

In a lawsuit, if the defendant requests an order for security for costs and it is not paid, the case is halted. A provision in the Rules of Civil Procedure states that, if the plaintiff is not in compliance with the security for costs order, the action is stayed. Additionally, with the passage of time, if a plaintiff remains in default of a security for costs order, then the action can actually be dismissed.

Requesting security for costs is a provision that is of real use and benefit to defendants and respondents, especially when the lawsuit has been brought by someone outside of Ontario. A defendant will move for security for costs stating the fact that the plaintiff is ordinarily resident outside Ontario and that will trigger the rule. Then it is up to the plaintiff to give good reason why he should not have to post security, and that is very difficult for a plaintiff to do. Even if the plaintiff has assets in other jurisdictions, that is usually not good enough to avoid a security for cost order.

It is the plaintiff who is dragging the defendant into the system, not the other way around. The courts have determined that a defendant has a legitimate expectation that, if his case is successful, he will get his costs paid at the end of the day. If a plaintiff wants to sue a defendant who has no assets, that’s a judgment call for the plaintiff to make, but the plaintiff is making the choice, the defendant does not have that choice. The order for security for costs gives the defendant hope of recovering it costs for a lawsuit that it did not initiate, so the plaintiff is obligated to pay.

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This article is taken from a April 30, 2008 interview with Gregory M. Sidlofsky. Note that laws vary from province to province. Please consult with a lawyer in your own area to be sure of the laws and specific issues in your own jurisdiction. The article is provided as an information service only and should not be used as legal advice.