Virginia Appeal Bonds
What Are Virginia Appeal Bonds?
In Virginia, the terms “appeal bond” and “suspending bond” serve two distinct functions. While a client can file a notice of appeal without staying enforcement of the judgment, an appeal bond or irrevocable letter of credit is still required to ensure that the judgment debtor can pay the costs and fees of the appeal.
- Appeal Bond: Under Va. Code § 8.01-676.1(A), a party filing an appeal of right to the Court of Appeals must simultaneously file an appeal bond or irrevocable letter of credit (LOC). This security is conditioned upon paying all costs and fees incurred in the Court of Appeals and the Supreme Court. View our article on the pros and cons of using Letters of Credit vs. Appeal Bonds here.
If the appellant wishes to stay execution of the judgment that they are appealing, a suspending bond or irrevocable letter of credit is then also required per Va. Code § 8.01-676.1(C). A suspending bond is commonly also referred to as a supersedeas bond. The function of this bond is to ensure that the appellant will pay the full judgment amount if the judgment is affirmed.
If you’re an attorney handling a case in Virginia, here are the requirements and statutory bond limits for a suspending bond.
Virginia Suspending Bond Amount Requirements
Virginia Code § 8.01-676.1 outlines the specific requirements for the bond amount and the conditions for staying a judgment. Here are several highlights to be aware of:
- Bond Amount: Shall be for the satisfaction of the judgment and payment of all damages incurred in consequence of such suspension, plus an amount equivalent to one year’s interest calculated from the date of the notice of appeal (Va. Code § 8.01-676.1(J)).
- Bond Cap: The total suspending bond or irrevocable LOC required for an appellant and its affiliates shall not exceed $25 million, regardless of the total value of the judgment.
- Exception for Asset Dissipation: Per Va. Code § 8.01-676.1(K), the $25 million cap may be rescinded if the appellee proves by a preponderance of the evidence that the appellant is purposefully dissipating or diverting assets outside the U.S. to evade the judgment.
- Discretionary Waivers: For good cause, a court may waive the requirement for a suspending bond for damages other than compensatory damages. Additionally, the Commonwealth and its local municipalities are exempt from security requirements.
Virginia § 8.01-676.1. Security for Appeal.
A. Security for costs of appeal of right to Court of Appeals in civil cases. — A party filing a notice of an appeal of right to the Court of Appeals in a civil case shall simultaneously file an appeal bond or irrevocable letter of credit in the penalty of $500, or such sum as the trial court may require, subject to subsection E, conditioned upon paying all costs and fees incurred in the Court of Appeals and the Supreme Court if it takes cognizance of the claim. If the appellant wishes suspension of execution in a civil appeal, the security shall also be conditioned and shall be in such sum as the trial court may require as provided in subsection C.
A1. Security for costs or suspension in criminal cases. — An appeal bond or letter of credit is not required in criminal appeals as security for costs. A suspension bond is not required in criminal appeals.
B. Security for costs on petition for appeal to Court of Appeals or Supreme Court. — An appellant whose petition for appeal is granted by the Court of Appeals or the Supreme Court shall (if he has not done so) within 15 days from the date of the Certificate of Appeal file an appeal bond or irrevocable letter of credit in the same penalty as provided in subsection A, conditioned on the payment of all damages, costs, and fees incurred in the Court of Appeals and in the Supreme Court.
C. Security for suspension of execution. — An appellant who wishes execution of the judgment or award from which an appeal is sought to be suspended during the appeal shall, subject to the provisions of subsection J, file a suspending bond or irrevocable letter of credit conditioned upon the performance or satisfaction of the judgment and payment of all damages incurred in consequence of such suspension, and except as provided in subsection D, execution shall be suspended upon the filing of such security and the timely prosecution of such appeal. Such security shall be continuing and additional security shall not be necessary except as to any additional amount that may be added or to any additional requirement that may be imposed by the courts.
D. Suspension of execution in decrees for support and custody; injunctions. — The court from which an appeal is sought may refuse to suspend the execution of decrees for support and custody, and may also refuse suspension when a judgment refuses, grants, modifies, or dissolves an injunction.
E. Increase or decrease in penalty or other modification of security.
1. The trial court or commission may, upon the motion of any party (i) for good cause shown, modify the terms of the security for the appeal or of the security for the suspension of execution of a judgment and (ii) resolve any objection to the form or issuer of a bond or letter of credit at any time until the Court of Appeals or the Supreme Court acts upon any similar motion. Any party aggrieved by the decision of the trial court or commission may request a review of such decision by the appellate court before which the case is pending.
2. The Court of Appeals or the Supreme Court may order that the penalty or any other terms or requirements of the security for the appeal or of the security for the suspension of execution of a judgment be modified for good cause shown (i) upon the motion of any party or (ii) if such request is made in the brief of any party filed in the Court of Appeals, or in the Petition for Appeal or the appellee’s Brief in Opposition filed in the Supreme Court or the Court of Appeals.
3. Affidavits and counter-affidavits may be filed by the parties containing facts pertinent to such request. Any increase or decrease in the amount of or other modification of the security so ordered shall be effected in the clerk’s office of the trial court within 15 days of the order of the trial court, the Court of Appeals, or the Supreme Court.
4. If an increase so ordered is not effected within 15 days, the appeal shall be dismissed, in the case of the security required under subsection A or B, or the suspension of execution of a judgment shall be discontinued, in the case of the security required under subsection C.
F. By whom executed. — Each bond filed shall be executed by a party or another on his behalf, and by surety approved by the clerk of the court from which appeal is sought, or by the clerk of the Supreme Court or the clerk of the Court of Appeals if the bond is ordered by such Court. Any letter of credit posted as security for an appeal shall be in a form acceptable to the clerk of the court from which appeal is sought, or by the clerk of the Supreme Court or the Court of Appeals if the security is ordered by such court. The letter of credit shall be from a bank incorporated or authorized to conduct banking business under the laws of this Commonwealth or authorized to do business in this Commonwealth under the banking laws of the United States, or a federally insured savings institution located in this Commonwealth.
G. Appeal from State Corporation Commission; security for costs. — When an appeal of right is entered from the State Corporation Commission to the Supreme Court, and no suspension of the order, judgment, or decree appealed from is requested, such appeal bond or letter of credit shall be filed when and in the amount required by the clerk of the Supreme Court, whose action shall be subject to review by the Supreme Court.
H. Appeal from State Corporation Commission; suspension. — Any judgment, order, or decree of the State Corporation Commission subject to appeal to the Supreme Court may be suspended by the Commission or by the Supreme Court pending decision of the appeal if the Commission or the Supreme Court deems such suspension necessary for the proper administration of justice but only upon the written application of an appellant after reasonable notice to all other parties in interest and the filing of a suspending bond or irrevocable letter of credit with such conditions, in such penalty, and with such surety thereon as the Commission or the Supreme Court may deem sufficient. But no surety shall be required if the appellant is any county, city or town of this Commonwealth, or the Commonwealth.
I. Forms of bonds; letters of credit; where filed. — The Clerk of the Supreme Court shall prescribe separate forms for bonds, one for costs alone, one for suspension of execution, and one for both and a form for irrevocable letters of credit, to which the bond or bonds or irrevocable letters of credit given shall substantially conform. The forms for each bond and the letter of credit shall be published in the Rules of Court. It shall be sufficient if the bond or letter of credit, when executed as required, is filed with the trial court, clerk of the Virginia Workers’ Compensation Commission, or the clerk of the State Corporation Commission, whichever is applicable, and no personal appearance in the trial court, Virginia Workers’ Compensation Commission, or State Corporation Commission by the principal, the surety on the bond or the bank issuing the letter of credit shall be required as a condition precedent to its filing.
J. In any civil litigation under any legal theory, the amount of the suspending bond or irrevocable letter of credit to be furnished during the pendency of all appeals or discretionary reviews of any judgment granting legal, equitable, or any other form of relief in order to stay the execution thereon during the entire course of appellate review by any courts shall be set in accordance with applicable laws or court rules, and the amount of the suspending bond or irrevocable letter of credit shall include an amount equivalent to one year’s interest calculated from the date of the notice of appeal in accordance with § 8.01-682. However, the total suspending bond or irrevocable letter of credit that is required of an appellant and all of its affiliates shall not exceed $25 million, regardless of the value of the judgment.
K. Dissipation of assets. — If the appellee proves by a preponderance of the evidence that a party bringing an appeal, for whom the suspending bond or irrevocable letter of credit requirement has been limited or waived, is purposefully dissipating its assets or diverting assets outside the jurisdiction of the United States courts for the purpose of evading the judgment, the limitation or waiver shall be rescinded and a court may require the appellant to post a suspending bond or irrevocable letter of credit in an amount up to the full amount of the judgment. Dissipation of assets shall not include those ongoing expenditures made from assets of the kind that the appellant made in the regular course of business prior to the judgment being appealed, such as the payment of stock dividends and other financial incentives to the shareholders of publicly owned companies, continued participation in charitable and civic activities, and other expenditures consistent with the exercise of good business judgment.
L. For good cause shown, a court may otherwise waive the filing of a suspending bond or irrevocable letter of credit as to the damages in excess of, or other than, the compensatory damages. Subject to the provisions of subsection K, the parties may agree to waive the requirement of a suspending bond or irrevocable letter of credit or agree to a suspending bond or irrevocable letter of credit in an amount less than the compensatory damages.
M. Exemption. — When an appeal is proper to protect the estate of a decedent or person under disability, or to protect the interest of the Commonwealth or any county, city, or town of this Commonwealth, no security for appeal shall be required.
N. Indigents. — No person who is an indigent shall be required to post security for an appeal bond.
O. Virginia Workers’ Compensation Commission. — No claimant who files an appeal from a final decision of the Virginia Workers’ Compensation Commission with the Court of Appeals shall be required to post security for costs as provided in subsection A if such claimant has not returned to his employment or by reason of his disability is unemployed. Such claimant shall file an affidavit describing his disability and employment status with the Court of Appeals together with a motion to waive the filing of the security under subsection A.
P. Time for filing security for appeal. — The appeal bond or letter of credit prescribed in subsections A and B is not jurisdictional and the time for filing such security in cases before the Court of Appeals or the Supreme Court may be extended by a judge or justice of the court before which the case is pending on motion for good cause shown. The effect of failing to perfect an appeal bond shall be governed by the Rules of Supreme Court of Virginia.
Q. Consideration of appeal bond, suspending bond, or letter of credit by Court of Appeals or Supreme Court. — A determination on an issue affecting an appeal bond, suspending bond, or letter of credit in a case before the Court of Appeals or the Supreme Court may be considered by an individual judge of such court rather than by a panel of judges.
R. This section applies to injunction bonds required pursuant to § 8.01-631.
S. In accordance with § 1-205, if the party required to post an appeal or suspending bond tenders such bond together with cash in the full amount required by this section to the clerk specified in this section, no surety shall be required.
*This does not constitute legal advice, please read our disclaimer.
Virginia § 1-205. Bond with surety.
“Bond with surety” includes the payment in cash of the full amount of the required bond and, in such case, no surety shall be required.
*This does not constitute legal advice, please read our disclaimer.
Who Needs Suspending Bonds in Virginia State Cases?
In Virginia courts, Appeal bonds are typically required to stay the enforcement of a money judgment while an appellant seeks to overturn a judgment or order. Except for judgments against most public entities, most monetary judgments require an appeal bond to prevent execution of the judgment during the appeals process.
Here are a few common cases that require Appeal bonds in Virginia:
- Contract Disputes
- Class Action Lawsuits
- Personal Injury Lawsuits
- Property Disagreements
- Business Litigation
- Employment Law Disputes
- Product Liability Claims
- Intellectual Property Conflicts with Monetary Awards
- Toxic Tort Litigation
- Domestic Relations Cases involving property division, alimony, or child support
Virginia Appeal Bonds Underwriting Requirements
An appeal bond functions similarly to an extension of credit. It ensures that the judgment debtor will pay the judgment to the judgment creditor if the appeal is wholly or partially unsuccessful. Unlike traditional insurance, which absorbs financial losses, an Appeal bond requires the appellant to reimburse the surety company if the appeals court affirms the trial court’s decision and the surety ends up paying a claim on the bond.
Since most judgments are not reversed on appeal, there is a high likelihood that the surety will receive a claim on the Appeal bond. Given this high probability of a claim, surety companies will often require collateral equal to the full bond amount before issuing a Virginia Appeal bond.
Exceptions to Collateral Requirements
Certain high-net-worth appellants with substantial liquidity relative to the bond amount may qualify for an appeal bond without full collateral. This may include:
- Publicly traded companies
- Banks and financial institutions
- Insurers
- Large private firms
- Individuals with significant liquid assets
Collateral Options for Appeal Bonds
To secure an appeal bond, appellants may provide collateral in various forms, including the following:
- Cash: This is the fastest and most straightforward method for securing an appeal bond. Appellants can also potentially earn interest on their cash during the appeal.
- Bank Letters of Credit: These are a financial guarantee issued by a bank to a surety, which confirms availability of funds upon demand up to a stated amount.
- Real Estate: Residential and commercial properties, including single-family homes, multi-family units, office spaces, industrial facilities, and retail properties.
- Marketable Securities: These include non-retirement brokerage accounts holding publicly traded stocks and bonds pledged to a surety as collateral.
FAQs
How Much Does an Appeal Bond Cost in Virginia?
The cost of a Virginia Appeal bond is determined by the premium rate set by surety companies, which are commonly in the 0.30% to 4% range based on the total bond amount and are dependent on the following factors:
- Bond amount requirement
- Type of collateral provided (if required)
- Financial stability of the appellant relative to the bond amount (if the bond is being considered without collateral)
Thus, if a surety is charging a 1% premium rate on a $2 million bond, the annual premium would equal $20,000.
Surety companies charge premiums for Appeal bonds yearly until their liability under the bond is released. The first year’s premium is considered fully earned upon bond issuance, and the bond automatically renews on an annual basis. After the first year, if the appeal is concluded midterm, and the surety is then exonerated from liability, they will prorate the renewal premium and issue a refund back to the client.
Best Practices for Posting an Appeal Bond Through a Surety Bond Provider
Securing an appeal bond in Virginia can be a complex process. Following best practices and having an experienced appellate bond specialist working with your client can help simplify this process and ensure a smooth and efficient experience:
- Contact a surety bond agent early. This advantage helps the client explore all options and ensure they can file the Appeal bond without delay.
- Ensure attorney involvement. Attorneys are critical in confirming the bond amount based on the jurisdiction’s requirements and parts of the judgment being bonded, updating the surety company on the deadline to file the bond, and reviewing the bond form to ensure it conforms with State or local rules.
- Choose the right surety bond agent. You and your client can choose the right surety bond agent by interviewing multiple professionals and choosing one with a strong track record of experience and who specializes in Virginia Appeal bonds.
Read our guide, “The Biggest Mistakes Made with Appeal Bonds,” to learn more.
Why Choose CSBA for Your Client's Appeal Bonds in Virginia?
When the stakes are high, your clients need a professional surety agent they can count on to stay enforcers of judgment. At CSBA, we have decades of experience in Appeal bonds, and we can guide your clients through the complex process.
A Legacy of Expertise & Trust
CSBA has helped appellants secure Appeal bonds from various industries involving almost every type of case since 1984. So whether your client is an individual needing a $1 million bond or a publicly traded company with a billion dollar judgment, we have the experience and resources to help.
Exclusive Surety Insurer Access & Creative Solutions
At CSBA, we have access to over 30 top-rated surety insurers. Several of these are exclusive or semi-exclusive insurers that most agents don’t have. This unique access and programs allow us to find creative solutions tailored to each client’s circumstances.
How Long Does It Take to Secure [an/a] Virginia Appeal Bond?
The time frame to secure [an/a] Virginia Appeal bond will depend on whether or not collateral is required.
If collateral isn’t required, the bond can be approved and issued within 24 hours in the most straightforward cases.
If the surety does require collateral, the type of collateral can affect the duration of securing an appeal bond. Cash collateral can be secured in a few days, while real estate collateral can generally take 30-60 days, depending on the property type and number of properties being posted.
Steps to Apply for a Supersedeas Bond
- Contact an appeal bond specialist to review your client’s bond requirement and start the process.
- The bond agent will discuss the various options with you and your client, and address any underwriting questions you or the client may have.
- Submit the following documents:
- Application
- Court complaint
- Judgment
- Notice of appeal
- CPA Audited Year-end Company Financial Statement if the client may be a candidate to qualify for an appeal bond without collateral.
- The surety agent will outline the Appeal bond approval, and work closely with you and your client to efficiently finalize the bond.
Get Your Client’s Virginia Appeal Bond Quote Today
Deadlines for filing an appeal bond are normally very tight. Appellants and their attorneys will need a responsive and knowledgeable surety agent to navigate the process.
At CSBA, we make the Appeal bond process smooth so you can focus on your case. Contact our Appeal bond experts today to take the next step toward securing your client’s Appeal bond.