The High Court has ordered 3V Benelux BV to provide €417,642 in security for costs in its action against Safecharge Card Services Limited. The security must be provided in cash or by bond by 5 January 2022. Further proceedings in the action are stayed until it is provided.
The ruling by Mr Justice Allen dealt only with the amount and form of security left outstanding after an earlier decision. In October 2019, the court had found that Safecharge had established a prima facie defence and reason to believe 3V Benelux would be unable to pay the defendant’s costs if the action failed. It also found that 3V Benelux had not shown, on a prima facie basis, that the anticipated inability to pay resulted from actionable wrongdoing by Safecharge.
The court had preferred Safecharge’s original estimate of party-and-party costs of €394,700 over 3V Benelux’s estimate of €252,000. Justice Allen ruled that the remaining issue was what fraction of that estimate should be secured. He declined to reopen the estimates, despite later affidavits seeking to revise them.
3V Benelux proposed a first-priority fixed charge over a bank account expected to receive funds from dormant debit-card balances. It said the funds could provide €417,642 after accounting for Safecharge’s claim to 25% of the projected inactivity fees. The judge considered the proposed charge ineffective as security because the account was expected to remain empty for about two years and the projected funds belonged to customers who could seek repayment.
The court also considered evidence that 3V Benelux had about €200,000 in cash, which was required for its business, and that its forecasts did not adequately account for its own legal costs. The judge inferred that a financial backer was funding those costs, but found no evidence about the nature or duration of that support. He concluded there was no evidence that an order for security would stifle the claim, and that delaying security while allowing the action to proceed would expose Safecharge to an unfair risk.
The court allowed time for security to be provided, noting the plaintiff’s proposal that funds would be available by the end of 2021. It ordered the €417,642 security by 5 January 2022 and stayed the action in the meantime. The ruling did not decide the underlying contractual dispute or the ultimate outcome of the claim.