Security for Costs in South African Litigation

The Legal Basis for Security for Costs

The right to request security for costs is found in Rule 47 of the Uniform Rules of Court, which empowers a defendant to demand that the plaintiff furnish security before proceeding further with their claim. Rule 47 sets out procedural framework, establishing when and how security for costs may be sought, however, this procedural framework is supported and enshrined by principles stemming from common law, and statutory provisions such as Companies Act.

Common Law and Companies Act Perspectives

Security of Cost has its roots not only in procedural rules but in common law principles. At common law a peregrinus (a foreign litigant that is not domiciled within the jurisdiction of the court) may be required to furnish security in order to protect an incola (a local litigant domiciled within the jurisdiction of the court) from not being able to recover costs. In addition, the Companies Act 71 of 2008 specifically empowers defendants to request security for costs from companies or close corporations. Under section 13, if it appears that a company will be unable to pay costs of litigation, the court may order security to be furnished. This provision reflects the commercial realities where entities without sufficient assets may otherwise evade cost liabilities, providing a statutory safeguard alongside common law and Uniform Rules. 

Constitutional Considerations

Security for costs orders engage the constitutional right of access to courts, enshrined in Section 34 of the South African Constitution. The constitutional balancing ensures that security for costs is granted only where justified by the facts, preserving fairness without undermining access to justice.

Instances where Security for Costs may be ordered

1. When a plaintiff lives or is incorporated outside South Africa, the defendant may have difficulty recovering costs if successful, in such cases courts often require the foreign plaintiff to furnish security before the matter proceeds. In Blum v Anglin 1938 AD 511, the court held that the foreign plaintiff could be compelled to provide a security to ensure that a successful defendant would not be left without recourse.
2. Where evidence suggest that a plaintiff is insolvent or unlikely to satisfy a costs order, the court may grant an application for security. In G v J.G 2023, the court ordered a litigant residing abroad and facing insolvency to furnish security for costs pending an appeal in terms of Rule 47 and 49(13).
3. Under section 13 of the Companies Act, a defendant may request that a company or close corporation provide as security for costs if there is reason to believe it will be unable to pay.
4. Where executors, trustees, liquidator, or curators who litigate on behalf of an estate or trust may be ordered to provide security if the estate’s funds are insufficient to cover possible costs.
5. If a court finds that an action is frivolous, malicious or without merit, it may order the plaintiff to provide security for costs as a safeguard against abuse of court process. In Standard Bank of South Africa Ltd v Maloka 2024, the court granted Standard Bank’s application for security for costs against a litigant who had repeatedly brough unmeritious claims. The court emphasized while access to the courts is a constitutional right, this does not give litigants license to instigate proceedings without regard to opposing party’s potential costs exposure.
6. Security for costs may be required when an appellant brings an appeal and where there is a risk that they will not be able to the respondent’s costs if the appeal fails. In Mokhele v South African Legal Practice Council 2025, in the Free State Division, the court ordered the applicant to furnish a security for cost, since the applicant had a history of unsuccessful litigation and failed to show ability to pay adverse costs.

The Court’s Discretion

Importantly an order for security is not automatic. The court has a discretion to grant or refuse it, considering the circumstances of the case. In Shepstone & Wylie v Geyser, the court emphasized that discretion must be exercised judicially, balancing the defendant’s right to be protected against uncollectable costs order and the plaintiff’s constitutional right of access to the courts. The courts therefore assess factors such as:

• The bona fide of the claim
• The financial position of the plaintiff,
• Whether the application for security is brought oppressively, and
• The interest of justice in allowing or refusing the claim to proceed.

Why Security for Costs Matters

Security for costs is not merely a procedural technicality, it is a mechanism that safeguards fairness and accountability in South Africa’s justice system. Litigation can be expensive and time-consuming, and without safeguards, defendants risk facing financial exposure defending against claims that may lack merit or are brought by parties unable to pay costs. At the same time, the rule protects the integrity of the courts by discouraging frivolous litigation, ensuring that only genuine disputes, brough in good faith and with real prospect of success, proceed through the system. In the wake of increasing cross-border and high-cost litigation, awareness of security for costs empowers parties to make informed decisions, protecting both access to justice and financial prudence. This knowledge helps to maintain trust in the legal process, promoting a system where justice is not only done, but done equally for all parties involved. Nevertheless, security for costs applications involve a delicate balancing act between protecting litigants from financial risk and preserving individual’s right to access the courts.

Conclusion

Security for costs plays a vital role in ensuring fairness in South African litigation. It protects defendants from the risk of unrecoverable costs while maintaining plaintiff’s constitutional right to access the courts.

The content does not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. Kindly contact us on info@cklaw.co.za or 021 556 9864 to speak to one of our attorneys.