Security for costs from a foreign claimant: step by step means a formal motion asking the court to order a claimant domiciled outside Sweden to lodge a guarantee covering the defendant's potential legal costs before the case advances further. If the claimant fails to provide it within the deadline set by the court, the claim can be dismissed without any ruling on its substance.
Who this concerns
This applies to any Swedish company or individual named as defendant in civil proceedings where the party bringing the claim is registered or resident outside Sweden. It matters most in commercial disputes with a foreign supplier, distributor, licensor or investor: situations where losing the case would leave the defendant with an unenforceable costs award, because the claimant has no assets or presence in Sweden against which that award could be collected.
It is largely irrelevant if the claimant is Swedish, or if the claimant already holds assets in Sweden sufficient to cover a costs award. It is also a narrower question than the merits of the underlying claim: a motion for security for costs does not test whether the claim is well founded, only whether the claimant can be trusted to pay if it loses.
For a group structure where the actual claimant is a foreign subsidiary backed by a Swedish or foreign parent, the security order attaches to the named claimant, not automatically to the parent. Whether the parent's exposure matters separately is a distinct question, addressed in the liability exposure of a foreign parent behind a group claim.
What the law says
Under Swedish law as it currently stands, a defendant can ask the court to order a claimant domiciled outside Sweden to provide security for the costs that the defendant may be awarded if the claim fails. The rule exists because a Swedish costs order against a claimant with no assets and no presence in Sweden is, in practice, unenforceable: there is nothing in the jurisdiction to attach.
The motion is decided by the district court, tingsrätt, handling the underlying claim, as an interim question separate from the merits. Whether the obligation applies at all depends on the claimant's domicile: a claimant based in a state with which Sweden has a relevant reciprocal arrangement on the recovery of legal costs is generally not caught by the rule, while a claimant based outside any such arrangement typically is.
If the court grants the motion, it sets both the amount of security and the form it must take, and gives the claimant a deadline to comply. Non-compliance carries a specific consequence: the court can dismiss the claim on that ground alone, without examining whether the claim would otherwise have succeeded.
How it works in practice
Step 1: Establish the claimant's domicile and legal form
Before filing, confirm where the claimant is actually domiciled, not just where it operates commercially. A foreign-sounding trading name does not settle the question; what matters is the claimant's registered seat or, for an individual, habitual residence. This determines whether the motion has any prospect of succeeding at all.
Step 2: Check whether a reciprocal arrangement removes the claimant from scope
Some domiciles fall outside the rule because Sweden has a reciprocal arrangement with that state covering the recovery of legal costs. This step decides the outcome before the motion is even drafted, and it is the step most often skipped under time pressure.
Step 3: File the motion before submitting a full defence on the merits
The motion is normally filed at an early stage of the proceedings, before or alongside the defendant's initial response. Filing it only after a full defence on the merits has been submitted risks the court treating the objection as waived, since by then the defendant has already engaged with the substance of the claim without raising it.
Step 4: Set out the cost exposure the security is meant to cover
The motion should include a reasoned estimate of the costs the defendant expects to incur through the anticipated stages of the case: first instance, and, where relevant, appeal. A bare request without any grounding in expected cost exposure gives the court little to work with when setting an amount.
Step 5: The court decides amount and form
The court sets the amount and the acceptable form of security, commonly a bank guarantee, a cash deposit, or another form of comparable reliability. The claimant is not free to choose an alternative that the court has not accepted; providing security in the wrong form has the same practical effect as providing none at all.
Step 6: The court sets a deadline and the case is paused pending compliance
The claimant is given a deadline to lodge the security. The case does not simply continue in parallel: further substantive steps typically wait until the security is in place or the deadline has passed.
Step 7: Non-compliance leads to dismissal
If the deadline passes without compliance, the court can dismiss the claim on that basis. This is a procedural dismissal, not a decision on the merits, but its practical effect for the defendant is the same as winning outright: the claim is disposed of without a trial.
Step 8: The order can be revisited if exposure grows
If the case runs longer than expected, or moves to appeal, the defendant can ask the court to increase the security to match the new cost exposure. The original order is not a ceiling fixed for the life of the case.
Documents the motion should include
- Evidence of the claimant's registered address or habitual residence, sufficient to establish domicile outside Sweden.
- A reasoned estimate of the defendant's anticipated legal costs through the stages of the case covered by the request.
- Any material showing the claimant has no attachable assets in Sweden, where available; this strengthens, though it does not on its own decide, the motion.
- A draft order specifying the requested amount and an acceptable form of security.
What to check before filing
- Whether the claimant's domicile is genuinely outside Sweden, not merely its trading presence.
- Whether Sweden has a reciprocal arrangement with that domicile that would take the claimant outside the rule.
- Whether the claimant already holds assets in Sweden that would make a costs award enforceable without security.
- Whether the defendant has already filed a full defence on the merits, which may complicate raising the objection late.
What happens to a security for costs order if the foreign claimant becomes insolvent while the Swedish case is pending?
An order for security does not by itself protect against the claimant's insolvency; it protects against a costs award being unenforceable for lack of assets. If insolvency proceedings open against the claimant abroad, the defendant's position, and what recovery is realistically possible, depends on the financial standing of any Swedish entity in the group. See what changes financially for a Swedish subsidiary in cross-border insolvency.
Does a security for costs order extend to a foreign parent company standing behind the claimant?
No, not automatically. The order attaches to the named claimant in the proceedings. Whether a parent company can be reached separately is a different question, governed by its own rules on when a parent's conduct or control creates exposure for that parent, discussed in liability exposure of a foreign parent standing behind a group claim.
If the claimant refuses to lodge the ordered security, is it faster to seek dismissal or to negotiate a settlement?
There is no fixed answer; it depends on how much the defendant values a clean procedural end against the certainty of a negotiated outcome. Dismissal for non-compliance closes the case on procedural grounds, while a settlement resolves it on agreed terms but requires the claimant's cooperation. The trade-off between the two routes is examined in choosing between pursuing enforcement through court and settling.
The numbers
Swedish law does not fix a standard percentage of the claim value, or a standard number of weeks, for this procedure. Both the amount of security and the deadline to provide it are set by the court on a case by case basis, taking into account the estimated cost exposure at the relevant stage of the proceedings and the complexity of the dispute.
What does vary, and is worth planning around, is this: the amount tends to track the defendant's reasoned cost estimate rather than an abstract formula, the deadline is calibrated to what it realistically takes to arrange a bank guarantee or deposit rather than being a fixed statutory period, and the form of security accepted is a matter for the court's discretion in the specific case. Anyone budgeting for this step should treat the figure as case-specific from the outset, not as a benchmark carried over from a different dispute.
Where it usually goes wrong
The motion is refused outright when the claimant's domicile turns out to be covered by a reciprocal arrangement with Sweden; filing without checking this first wastes the early procedural window that makes the motion effective in the first place.
It is treated as waived when filed only after the defendant has already submitted a full response on the merits, since the court can read continued engagement with the substance of the claim as inconsistent with objecting to the claimant's standing to litigate without security.
It is refused, or the security is set unrealistically low, when the defendant's cost estimate is vague or unsupported; a bare request for "security for costs" without a reasoned figure gives the court little basis for anything but a token amount.
It fails in substance, even after being granted, when the claimant provides security in a form the court did not specify, such as a corporate guarantee where a bank guarantee was required; the defendant then has to raise the deficiency separately, losing the time the order was meant to protect.
It becomes moot when the claimant turns out to hold attachable assets in Sweden after all, since the underlying rationale for security, that a Swedish costs award would otherwise be unenforceable, no longer applies.
It stops mattering the way the defendant expected when the dispute intersects with a criminal or regulatory sanction against the corporate claimant itself, such as a företagsbot, a corporate fine under Swedish law; that is a separate track with its own consequences and is not resolved or affected by a civil security for costs order.
What to do next
A motion for security for costs is a procedural step, not a strategy on its own. It buys leverage and protects a future costs award, but it does not tell a defendant whether the claimant actually has recoverable assets anywhere, or whether the underlying claim is worth fighting rather than settling.
Before deciding whether to file, it is worth establishing what the claimant's financial and asset position actually looks like; a debtor report gives that picture directly rather than through assumptions built into the motion. Where the position is unclear or the group structure adds complexity, book a preliminary assessment to work through the specific facts before committing to the procedural route.
For the broader set of steps available once a claim or a judgment needs to be enforced against a party connected to Sweden, see the debt recovery and enforcement overview. For related reading: the glossary entry on företagsbot, the financial exposure of a Swedish subsidiary in cross-border insolvency, and liability exposure of a foreign parent behind a group claim.