On 9th June 2026, the Supreme Court issued a significant judgment in the case of Sweeney & Anor v The Voluntary Health Insurance Board [2026] IESC 32, setting aside a security for costs Order, on the basis of delay.
The decision makes it clear that defendants who delay in issuing such applications run the risk of a court refusing their application.
The decision serves as a significant reminder to defendants that applications for security for costs should be pursued at the earliest reasonable opportunity.
Background to the Proceedings
The proceedings arose from a dispute concerning the proposed establishment of a private hospital in Limerick. The appellants alleged that the respondent insurer had abused a dominant position in violation of competition law by refusing to provide insurance cover for the intended facility.
The respondent first sought security for costs shortly after proceedings issued in 2015 and threatened to issue a motion if security was not voluntarily provided. However, no such application issued until June 2023, almost eight years later. Although the High Court granted the security for costs Order in the sum of €1,790,500 against the appellant company (which the Court of Appeal upheld), the appellants ultimately succeeded before the Supreme Court, which set aside the High Court Order on the basis of the delay in bringing the security for costs application.
Delay as a “Special Circumstance”
The primary issue for the Supreme Court to consider was whether the appellants could rely on the respondents delay itself, and / or any presumed or inferred prejudice arising from it, or whether they must establish actual prejudice in resisting the application for security for costs. If actual prejudice was required, the court had to consider whether sufficient prejudice had been demonstrated before the High Court. The Court also considered whether, in light of the Kirwan v Connors [2025] IESC21 decision, prejudice was required at all.
In addressing that question, the Supreme Court set out the following principles regarding delay as a special circumstance:
- Courts assess applications for security for costs at an early stage of proceedings, often without being able to form strong views on the merits of the underlying claim. This context informs consideration of any “special circumstance”;
- The rational of delay as a special circumstance is based on the entitlement of the Plaintiff to know as early as reasonably possible whether security for costs may be required, as this may affect decisions about whether and how to progress proceedings.
- The relevant question is not whether the plaintiff would have continued the litigation regardless, but whether it was deprived of the opportunity to make informed decisions with full knowledge of the potential requirement to provide security.
- Courts will consider not only the parties’ interests but also the public interest in the ensuring the efficient administration of justice. Delayed applications may waste judicial resources, prolong litigation and result in unnecessary interlocutory steps that could have been avoided if security for costs application was made earlier.
- The length of the delay is a relevant factor in assessing where the overall balance of justice lies.
- Plaintiffs will generally be expected to demonstrate some prejudice arising from delay, although the evidence required will depend on the circumstances and the history of the proceedings.
- Where delay is substantial and unexplained, courts may infer prejudice and conclude that the balance of justice favours refusing security, unless there is a pressing exigency of justice.
- Security for costs is a discretionary order and as such, there is an obligation to bring such application as soon as reasonably possible, generally within weeks or months. Unexplained delays of six months to one-year weighs against granting relief even without any specific prejudice. A delay of more than one year, particularly an unexplained delay, shifts the balance of justice toward refusing to order security for costs unless a pressing exigency of justice exists.
In applying these principles, the Court concluded that the respondent’s delay was “truly extraordinary” and as such, was fatal to the application. The Court held that the respondent had sufficient information to bring a motion for security for costs from at least October 2015, when it expressly threatened to issue same and no explanation was offered as to why the application was delayed for almost eight years thereafter.
In those circumstances, the Court held that the delay, combined with the absence of any pressing exigency of justice, justified setting aside the High Court order requiring the appellant company to provide security for costs.
Key Take Aways
The judgment serves as a clear reminder that where security for costs is contemplated, defendants should act promptly to bring such application, ideally soon after the commencement of proceedings.
Defendants cannot assume that raising the issue in correspondence will preserve their position indefinitely. Delay must be justified and where substantial periods pass without explanation, courts may infer prejudice and conclude that the balance of justice favours refusing relief.
The decision is a strong reminder that security for costs is a discretionary order that demands early strategic consideration and expeditious action.
For further information, please contact Liam Collins or Eoin Cunneen.