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Sweeney & Anor v The Voluntary Health Insurance Board [2026] IESC 32
The Supreme Court has allowed an appeal and set aside an order for security for costs on the basis that the delay in bringing the application was so extensive, and so inadequately explained, as to constitute a sufficient special circumstance to displace the presumptive entitlement to security. The Court described the delay as “truly extraordinary”.
The decision confirms that delay remains a recognised special circumstance in security for costs applications, but goes further in clarifying why that is so, how delay is to be assessed, and the extent to which prejudice must be established where delay is relied upon in answer to an otherwise well-founded application.
Key Points
- Delay may, in an appropriate case, constitute a sufficient countervailing factor to defeat an otherwise valid application for security for costs.
- While prejudice will often remain relevant, the greater the delay, the less weight will be placed on the need to establish it. In cases of sufficiently significant and unexplained delay, delay itself may shift the balance of justice against granting security.
- Applications for security should be brought as soon as reasonably practicable, ordinarily within weeks or, at most, a number of months, with delays of six months or more calling for explanation and delays of a year or longer weighing decisively, against the grant of security.
Background
The proceedings arise from a proposed private hospital project in Limerick. The appellants alleged that the Voluntary Health Insurance Board (the “VHI Board”) had abused a dominant position by refusing to recognise the proposed facility for insurance purposes.
The respondent first sought security for costs in correspondence in May 2015 and stated in October 2015 that, absent agreement, it would issue a motion. No motion was in fact issued until 28 June 2023. In the intervening period, the proceedings advanced through a series of interlocutory steps, most notably a contested dispute concerning expert evidence which proceeded through the High Court, the Court of Appeal and the Supreme Court, with costs orders being made against the appellants.
The High Court ordered security for costs and that decision was upheld by the Court of Appeal. The Supreme Court allowed the appeal.
The statutory context
Under section 52 of the Companies Act 2014, a defendant seeking security for costs must establish a prima facie defence and credible grounds for believing that the plaintiff company will be unable to meet a costs order if unsuccessful. Once those conditions are met, security will ordinarily be ordered unless the plaintiff establishes a sufficient countervailing factor, or special circumstance, such that the balance of justice lies against making the order.
Delay is one such recognised special circumstance. The central issue in this appeal was the proper approach to delay in that context, and in particular whether a plaintiff must always demonstrate actual prejudice in order to rely successfully on delay as a basis for resisting security.
Delay as a special circumstance
A central feature of the judgment is its careful explanation of the rationale underpinning delay as a special circumstance. The Court endorsed the analysis of Clarke J. in Moorview Developments Ltd v Cunningham, namely that a plaintiff ought, so far as reasonably practicable, to be able to factor into its decision whether to progress proceedings the fact that security may have to be provided. The point is not whether the plaintiff would inevitably have proceeded in any event. It is that the plaintiff ought to have been entitled to make that decision in possession of full information.
That aspect of the judgment is important. It places the emphasis not merely on loss in a narrow financial sense, but on the loss of a procedural opportunity: the opportunity to decide, at the relevant time and with the relevant information, whether it is appropriate to continue to invest in the litigation. Where a defendant delays in bringing an application for security, that opportunity is diminished or lost.
Donnelly J. also made clear that delay, in this context, also engages the public interest in the efficient administration of justice. Unexplained delays in bringing applications for security may permit proceedings to continue through interlocutory stages that might otherwise have been avoided, thereby consuming court time and prolonging the resolution of the dispute on the merits. Those are not marginal or collateral concerns. They are part of the balance of justice which the court is required to assess.
Prejudice and the effect of delay
Donnelly J. reviewed the earlier authorities, including Hidden Ireland, Moorview, Werdna and Marlan Homes, and clarified that prejudice will generally remain relevant when delay is relied upon as a special circumstance. Prejudice may consist of detriment, loss or damage, and may include the incurring of costs, including adverse costs orders. The nature of the evidence required will depend on the facts of the case, and the court is entitled to look at the history of the proceedings as a whole.
At the same time, the judgment rejects any absolute rule that specific prejudice must always be separately proven. The Court held that the longer the delay, the less weight need be placed on proof of prejudice in tipping the balance of justice against granting security. Where the delay is significant and unexplained, the Court may conclude that the balance of justice has already shifted in favour of refusal. In such a case, prejudice may be inferred from the delay itself, and where the delay is sufficiently grave, there may be no need to demonstrate prejudice at all.
This aspect of the judgment is expressly informed by a broader development in Irish procedural law. Donnelly J. situated the analysis in the context of Kirwan v Connors [2025] IESC 21 and Tweedswood Ltd v Power [2025], both of which reflect a stricter modern attitude to delay and a clearer recognition that lapse of time is itself harmful to the administration of justice and to the effective use of limited judicial resource
When does the delay begin?
The Court also rejected any rigid rule that delay is to be measured only from delivery of the defence. The proper inquiry is one of knowledge. The relevant period begins when the defendant has sufficient knowledge to decide that it has a basis for seeking security and to articulate that application. In many cases that may be after pleadings have closed, but the matter is fact-specific and not governed by a fixed procedural milestone.
On the facts, the Court held that the respondent had sufficient knowledge by October 2015 at the latest, when it expressly stated that it had instructions to issue a motion for security for costs.
The Court held that the delay was “truly extraordinary”. Measured from October 2015, it was almost eight years. Measured from delivery of the defence in June 2018, it was still approximately five years. No explanation for that delay was advanced on affidavit. On any view, the delay was inordinate.
The Court also considered that the delay had practical and systemic consequences. Significant judicial resources had been expended in hearing and determining the expert evidence dispute and associated appeals during a period in which the respondent could, had it chosen to do so, have pursued the security application. Donnelly J. described the respondent’s decision to pursue that interlocutory course rather than seek security as a strategic choice and held that the consequences of that choice fell to be weighed in the balance.
In those circumstances, the delay alone was sufficient to justify refusal of security. The Court nevertheless went on to hold that, even if the delay had not been so significant as to be determinative in itself, there was sufficient prejudice in the form of the costs orders made against the appellants during the intervening interlocutory litigation.
Why the decision matters
The judgment is likely to be of immediate practical significance in commercial litigation. It confirms, in clear terms, that delay in bringing a security for costs application is not merely a background discretionary factor. Depending on its length and explanation, it may become the decisive consideration. Defendants who wish to seek security must therefore do so promptly once the relevant basis is known.
More broadly, the decision reflects the increasingly clear judicial unwillingness to tolerate procedural delay where that delay skews the balance of justice between the parties or imposes avoidable burdens on the administration of justice. In that respect, Sweeney sits comfortably with the the recent judicial emphasis reflected in Kirwan and Tweedswood: the courts are placing greater weight on lapse of time itself, on litigation efficiency, and on the systemic consequences of procedural delay.
This article was co-authored by Knowledge Lawyer, Melanie Ardiff.
