Mostly we issue contract surety bonds (Performance & Payment) for contractors and our insurance agent / colleagues. However, we are also an important provider of Court and Probate bonds. We issued a number of interesting court bonds recently so here is some info on this subject.
What Are Court Bonds Are Why Are They Needed?
Generally, court bonds serve three purposes.
They provide required protection for the other party in the litigation (opposite the bond applicant)
They guarantee the payment of related court costs
The court likes them
An Injunction Bond is a good example. In these legal actions one party wants to limit or prevent the actions of another. An insurance agency may request an injunction to prevent a former salesman from soliciting their clients. The court requires the plaintiff (insurance agency) to provide a bond for the protection of the defendant (salesman) in the event it is found that (s)he has been wrongfully restrained.
A Replevin Bond is similar. These are required when the plaintiff (a bank) wants to seize an asset (your private jet) for failure to pay your finance charges. The bond will protect you if it is later found they wrongfully seized "Wings Over Yonkers." See how these work? In different situations the bonds provide the same type of function. The name of the bond identifies the underlying legal action.
Why Do Courts Like Them?
You may think "what's not to like?!" That's true. But the court may require a surety bond for a practical reason. If the litigation involves a financial matter, they could require that an escrow deposit be placed with the court for the benefit of the other party. They would hold this money until the case is decided.
This works, but is not convenient. Where will the funds be held? Who is responsible for their safekeeping? Will there be periodic accounting if the case runs for years? Who pays the expenses associated with this? What if the money is misplaced or stolen?
Compare this to a surety bond: Get the bond, throw in the file. Done!
Even though the court may have the option to take cash in lieu of bond, they may demand the issuance of a surety bond simply for its convenience.
Other Court Bonds
When a money judgment is rendered, the defendant may want the matter heard by the Appellate Court. Let's say Maynard sued Dobie for money and wins a $10,000 judgment. Maynard figures "OK here comes 10 big ones!" However, Dobie wants to dispute the decision so now Maynard has to wait.
In order to bring the Appeal, Dobie must obtain an Appeal Bond which protects the interests of the court and guarantees prompt payment if Dobie loses again. To get this bond, he'll have to give his personal financial statement, his indemnity, and put up maybe $11,000 for the surety to hold. Oh, and pay the bond premium! Why is all this necessary?
What Are Court Bonds Are Why Are They Needed?
Generally, court bonds serve three purposes.
They provide required protection for the other party in the litigation (opposite the bond applicant)
They guarantee the payment of related court costs
The court likes them
An Injunction Bond is a good example. In these legal actions one party wants to limit or prevent the actions of another. An insurance agency may request an injunction to prevent a former salesman from soliciting their clients. The court requires the plaintiff (insurance agency) to provide a bond for the protection of the defendant (salesman) in the event it is found that (s)he has been wrongfully restrained.
A Replevin Bond is similar. These are required when the plaintiff (a bank) wants to seize an asset (your private jet) for failure to pay your finance charges. The bond will protect you if it is later found they wrongfully seized "Wings Over Yonkers." See how these work? In different situations the bonds provide the same type of function. The name of the bond identifies the underlying legal action.
Why Do Courts Like Them?
You may think "what's not to like?!" That's true. But the court may require a surety bond for a practical reason. If the litigation involves a financial matter, they could require that an escrow deposit be placed with the court for the benefit of the other party. They would hold this money until the case is decided.
This works, but is not convenient. Where will the funds be held? Who is responsible for their safekeeping? Will there be periodic accounting if the case runs for years? Who pays the expenses associated with this? What if the money is misplaced or stolen?
Compare this to a surety bond: Get the bond, throw in the file. Done!
Even though the court may have the option to take cash in lieu of bond, they may demand the issuance of a surety bond simply for its convenience.
Other Court Bonds
When a money judgment is rendered, the defendant may want the matter heard by the Appellate Court. Let's say Maynard sued Dobie for money and wins a $10,000 judgment. Maynard figures "OK here comes 10 big ones!" However, Dobie wants to dispute the decision so now Maynard has to wait.
In order to bring the Appeal, Dobie must obtain an Appeal Bond which protects the interests of the court and guarantees prompt payment if Dobie loses again. To get this bond, he'll have to give his personal financial statement, his indemnity, and put up maybe $11,000 for the surety to hold. Oh, and pay the bond premium! Why is all this necessary?
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