Estate Litigation and Security for Costs: Avoiding Surprises in Court

Legal costs can add up quickly during estate litigation in British Columbia. One tool the courts sometimes use to manage risk and fairness in these proceedings is an order for security for costs.

What is “Security for Costs”?

An order for security for costs order requires one party, usually either the claimant or the appellant, to provide money to cover the opposing party’s potential legal costs if the claim is unsuccessful.

The goal is not to punish anyone. Security for costs protects a defendant or respondent from having to incur substantial legal fees with little hope of recovering costs later, especially when the opposing party may have no assets in British Columbia, a weak or speculative claim, a history of failing to pay court costs, or litigation funding concerns.

An order for security for costs are discretionary and fact-specific.

Spencer J. in Island Research & Development Corp. v The Boeing Co. 1991 CanLII 598 (BC SC), stated:

“The purpose of security for costs is to protect a defendant from the likelihood that in the event of its success it will be unable to recover its costs from the plaintiff. The plaintiff is not permitted a free ride on an unlikely claim at the defendant’s expense.  The factors to be considered in achieving a just balance between the defendant’s right to protection and the plaintiff’s right to advance a potential claim for adjudication include the chance of the claim’s success, the anticipated level of cost in conducting the action and the prospect of the plaintiffs ever having assets from which to pay the defendants’ costs if the claim fails.” (emphasis added)

What are Security for Costs in Estate Litigation?

To grant an order for security for costs in estate litigation, courts look closely at:

1. The nature of the claim: Some estate claims seek to ensure a fair distribution or allege wrongdoing by an executor. In those cases, courts may be reluctant to block access to justice by imposing heavy financial barriers.
2. The applicant’s standing: Executors and personal representatives may have access to estate funds, while beneficiaries typically do not. Courts balance the parties’ respective financial positions carefully.
3. The strength of the claim: If a claim appears weak, speculative, or abusive, a court may be more inclined to require security.
4. Whether the claimant lives outside BC: If the claimant resides out of province or out of country, the risk of cost recovery increases.

Courts may also assess:

• Whether security would unfairly stifle a meritorious claim;
• Whether estate assets are accessible to the claimant (like in wills variation matters); and
• Any prejudice caused by delay or by requiring security

Why do Courts Order Security for Costs?

Security for costs may be granted to:

• Prevent frivolous or vexatious litigation;
• Protect the estate’s assets;
• Shield executors from personal financial risk;
• Encourage efficient and responsible litigation; and/or
• Ensure fairness between financially unequal parties

Courts are unlikely to order security where:

• There is a legitimate issue requiring judicial determination (such as capacity concerns, suspicious circumstances);
• Ordering security would deny access to justice;
• The applicant-executor can access estate funds and faces little personal financial risk; or
• The claim is central to ensuring fair estate distribution

How Much Security is Required?

Security is not meant to cover the cost of the entire litigation. It is just meant to be a reasonable portion to protect the responding party.

The court typically estimates:

• Costs incurred to date;
• Future anticipated costs through key litigation stages; and
• The complexity of the matter

What Happens if a Party Cannot Pay?

If the court orders security for costs and the claimant is unable to pay, their claim may be stayed (paused) until the security is provided. This can effectively halt the litigation.

However, courts often weigh access-to-justice concerns carefully, especially in estate matters where a party may have legitimate rights but limited financial means.