Security for costs from a foreign claimant: what to do in the first ten days comes down to three moves made before the response deadline: verify the claimant's domicile and asset position, preserve that evidence, and file an early application for security (rättegångskostnadssäkerhet) with the court hearing the case.
Who this concerns
This concerns a Swedish company, or a foreign company with Swedish assets, that has just been served with a claim by a claimant domiciled outside the EU or EEA, where that claimant has no branch, no bank account, and no registered property in Sweden. It also concerns cases where the claimant is a special-purpose vehicle set up for a single transaction, or a group entity whose parent sits in a jurisdiction with no reciprocal enforcement arrangement with Sweden.
The trigger is procedural, not substantive. The defendant does not yet need to know whether the claim will succeed. What matters at this stage is whether the defendant, if it wins and is awarded costs, has any realistic path to collect them from the claimant. If the answer is no, Swedish procedure gives the defendant a tool to shift that risk back onto the claimant before the case consumes further resources.
The issue often surfaces alongside other exposure. A manufacturing supplier facing a claim from an offshore counterparty may also be assessing de facto director liability in manufacturing if the claim later turns into an insolvency dispute, and a claimant that senses it will be asked for security sometimes accelerates asset stripping ahead of a bankruptcy filing on its own side, which changes what the defendant should preserve as evidence now, not later.
What the law says
Under Swedish law as it currently stands, a court hearing a civil claim may, on the defendant's application, order a claimant who is domiciled outside the EU or EEA and who lacks sufficient recoverable assets in Sweden to lodge security covering the defendant's anticipated litigation costs. If the claimant does not provide that security within the period the court sets, the claim is dismissed without the merits being examined.
The mechanism is procedural and sits apart from the substantive dispute. It does not require the defendant to show the claim is weak, only that recovery of a future costs award would be impractical. Claimants domiciled within the EU or EEA generally fall outside its scope regardless of their asset position, because the underlying policy concern, cross-border enforceability of a Swedish costs order, does not arise in the same way inside that regime. Some jurisdictions outside the EU or EEA are treated differently again where Sweden maintains a reciprocal arrangement recognised by its courts, which is why the claimant's actual domicile and corporate structure need to be established precisely, rather than assumed from the address on the statement of claim.
Where the claimant is a subsidiary of a group whose parent holds assets elsewhere but not in Sweden, the analysis does not automatically transfer to the parent. The court looks at the claimant as the party to the litigation, and security is assessed against that party's own position unless there is a basis to look through the corporate structure.
How it works in practice
Days one and two: confirm domicile and asset exposure
Establish, from the claim documents and any available corporate register extracts, where the claimant is actually domiciled and whether it holds identifiable assets in Sweden. A registered address is not the same as domicile for this purpose, and a claimant that trades through a Swedish agent may still have no assets of its own here.
Days three and four: build the evidentiary basis
Assemble what supports the application: absence of a Swedish bank account, absence of registered property, absence of a branch, and, where available, information about the claimant's financial standing in its home jurisdiction. Weak or thin capitalisation strengthens the application; a dormant or recently incorporated claimant strengthens it further.
Days five and six: decide the quantum and form requested
The application should propose a specific amount and a form of security, typically a bank guarantee or a deposit, calibrated to the costs the defendant genuinely expects to incur through the stage of proceedings the court is likely to reach. Overreaching on quantum invites the court to reduce it and slows the decision; underreaching leaves the defendant exposed if the case runs longer than expected.
Days seven and eight: file and notify
File the application with the court seized of the substantive claim and notify the claimant's counsel. Filing early, before any response on the merits, matters procedurally: engaging substantively with the claim first can be read as a waiver of the right to raise security later.
Days nine and ten: prepare for the order and its consequences
The court will typically invite the claimant to respond before ruling. Prepare for two outcomes: an order setting a period for security, after which non-compliance leads to dismissal, or a refusal, usually because the claimant demonstrates sufficient Swedish assets or EU or EEA domicile after all. Either way, the defendant should already know its next procedural step before the ruling lands.
What to check
- The claimant's registered domicile against its actual trading address and correspondence address.
- Whether the claimant holds a Swedish bank account, branch registration, or real property.
- Whether the claimant's parent or group structure has any independent basis for being brought into the analysis.
- Whether any reciprocal arrangement between Sweden and the claimant's home state affects eligibility.
- The stage of proceedings reached, since an application filed after substantive engagement is weaker.
- Whether the underlying claim is disputed on the merits or is, in substance, an undisputed debt that belongs on a different procedural track.
How does security for costs apply if the claimant has any assets at all in Sweden?
Generally it does not apply in the same way. The mechanism targets claimants who lack assets sufficient to satisfy a future costs order in Sweden. A claimant with a modest but identifiable Swedish asset base can argue the risk the rule addresses does not exist, and the court will weigh the adequacy of that asset base against the costs likely to be at stake, not just its existence.
What happens if the claimant ignores the court's order to post security?
The claim is dismissed without the court examining the merits. Dismissal on this ground is procedural rather than a decision on the substance of the dispute, which matters if the claimant later tries to bring the same claim again, since it may not be barred from doing so on the merits, only from continuing that particular action without complying with the order.
Can the defendant recover the security if the claim is later withdrawn?
If the claimant withdraws, the defendant can apply for a costs order covering work done to that point, and any security already lodged is available to satisfy it. Withdrawal does not automatically release the security to the claimant; the court's decision on costs following withdrawal determines what happens to it.
The numbers
There is no fixed schedule set out here for how long the court takes to decide the application, or how long it gives the claimant to lodge security once ordered. Both periods are set by the court hearing the case, calibrated to the complexity of the claim and its own workload, and neither is announced in advance. What is within the defendant's control is the ten-day window discussed above: the period between service of the claim and the point at which delay starts working against the application.
What drives the cost of running this application, and the underlying case if security is refused, is the number of procedural steps expected before judgment, whether expert evidence or translated documents will be needed, and whether an appeal is realistic on either side. A claim likely to run to a full evidentiary hearing with foreign-language documents costs materially more to defend than one likely to be resolved on the papers, and the security amount should track that expectation rather than a rough estimate of legal fees in general terms.
Where the claimant would struggle to satisfy any costs order regardless of the outcome, defendants sometimes weigh the settlement versus enforcement economics of the dispute before deciding whether to press the security application at all, since a settlement that avoids the costs of litigating both the security question and the merits can be the more efficient route.
Where it usually goes wrong
Claimants domiciled within the EU or EEA fall outside this mechanism under Swedish law as it currently stands, and an application against such a claimant will be refused regardless of how thin its balance sheet looks. Domicile, not asset quality, is the threshold question.
Filing the application only after responding substantively to the claim is the most common self-inflicted problem. A defendant that files a defence on the merits and only later raises security risks the court treating the point as waived, because the procedural posture already assumed the case would run.
Security ordered at the outset does not automatically extend to a subsequent appeal. A defendant that wins at first instance and faces an appeal from the same claimant generally needs a fresh application if it wants security covering the appellate stage.
The mechanism does not stop the claimant from pursuing interim relief, such as an attachment over the defendant's own assets, while the security question is being decided. The two tracks run in parallel, and a defendant focused only on the security application can be caught out by a separate interim measure filed against it.
If the underlying dispute is heading to arbitration rather than Swedish court proceedings, this mechanism does not apply in the same form, and enforcement risk has to be assessed differently, closer to the issues that arise when enforcing an arbitral award in Saudi Arabia or another non-Convention jurisdiction than to Swedish civil procedure.
Finally, if the claimant later acquires Swedish assets, for example by opening a local subsidiary once litigation is underway, the basis for the security order can be reassessed, and a claimant that senses this coming sometimes moves quickly, which is the same dynamic behind asset stripping ahead of a bankruptcy filing on the claimant's own side.
What to do next
This material gets a defendant to the point of knowing whether the mechanism applies and what evidence the application needs. Whether it is worth filing, and how strong the resulting position actually is, depends on documents specific to this claim: the contract between the parties, the claimant's corporate filings abroad, and where in the proceedings the case currently stands. That assessment is not something to reconstruct from a checklist.
If the debt underlying the claim is itself disputed rather than simply unpaid, the procedural route differs again, and it is worth reading why disputed claims cannot use the summary route before deciding how the security application fits into the broader strategy. For a view on whether this specific claim is worth defending on security grounds at all, an assessment call is the next step: arrange an assessment of the claim.
For the broader mechanics of collecting against a claimant that resists payment, see the firm's debt recovery and enforcement work in Sweden.