Most appellate lawyers are familiar with appeal bonds and their use in many jurisdictions in staying enforcement of a judgment pending appeal. Less commonly understood are the requirements to obtain a bond and when it does and does not make sense for a client to use a bond rather than post another form of security directly with the court.
Often, the thought is that if 100 percent collateral is required by the surety insurer, the client is better off posting security with the court. While this can sometimes be true, bonds in many circumstances are more beneficial to the client. There are even times when posting cash with a surety insurer instead of the court directly can be advantageous to the client. Understanding these nuances can help save clients’ money and make sure they do not forgo their option to stay enforcement of a judgment due to misconceptions about their ability to secure an appeal bond.
To understand the requirements, it is helpful to gain a little insight into the nature of the obligation of an appeal bond. When issuing an appeal bond, a surety insurer is guaranteeing to the appellee on behalf of the appellant that if the lower court’s judgment is upheld, the surety insurer will pay the judgment plus costs to the respondent. This promise to pay is what surety insurers often refer to as a “financial guarantee,” because there are no other triggers or requirements that need to occur other than a decision by the appellate court, affirming the judgment in whole or in part.