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Pannone LLP v Aardvark Digital Ltd [2013] EWHC 686 (Ch)


Appeal against an order for security for the claimant's costs in relation to the defendant's counterclaim for damages for professional negligence in a dispute as to outstanding fees.

Held: Whether it is just to make an order for security is determined according to the circumstances of the case. Relevant considerations include the degree of overlap of issues between the claim and the counterclaim; the amounts claimed and counterclaimed respectively; and, whether a counterclaim is in substance a defence or an independent claim. Such an order will not be made if it disproportionately stifles a valid claim.

Order set aside. Although the counterclaim crossed the boundary which divides an aggressive defence from an independent claim, it was not just to order security. Evidence was sufficient to show an absence of, and inability to obtain, funding which would enable the defendant to comply with the order, therefore stiflying the counterclaim contrary to Article 6.