Hamilton v Al Fayed and Others (No 2): CA 17 May 2002

The claimant had lost a libel action and been bankrupted. The defendant sought to recover his costs from those who had financially supported the claimant. He now appealed a dismissal of his request for contributions.
Held: An order for the payment of costs by a n’oure funder’ on-party will always be exceptional. ‘Exceptional’ means as compared to the generality of litigation, and should be based only on a substantial connection between the litigation and the person against whom the costs order is sought. The court should generally try to discourage satellite litigation. Causation is also a required pre-condition of a section 51 order, and in this case was not established.
A successful unfunded party’s ability to recover his costs had to yield to the funded party’s right of access to the courts. The pure funding of litigation was in the public interest provided that its essential motivation was to enable the funded party to litigate what the funders perceived to be a genuine case.

Lady Justice Hale
Times 17-Jun-2002, Gazette 20-Jun-2002, [2002] EWCA Civ 665, [2003] QB 1175
Supreme Court Act 1981 51
England and Wales
CitedAiden Shipping Co Ltd v Interbulk Ltd (The ‘Vimeira’) HL 1986
Wide Application of Costs Against Third Party
A claim had been made against charterers by the ship owners, and in turn by the charterers against their sub-charterers. Notice of motion were issued after arbitration awards were not accepted. When heard, costs awards were made, which were now . .
CitedSymphony Group Plc v Hodgson CA 4-May-1993
Nine rules were set out for allowing a costs order against someone who is not a party to the action. Such orders should be exceptional. The normal rule is that witnesses in either civil or criminal proceedings enjoy immunity from any form of civil . .
CitedGlobe Equities Ltd v Globe Legal Services Ltd and others and Other Actions CA 5-Mar-1999
A court which was considering ordering a third party, who was not party to the action, to pay costs in an action, should first be satisfied that it is just to do so in all the circumstances. There is no need to establish any exceptional . .

Cited by:
CitedArkin v Borchard Lines Ltd and others CA 26-May-2005
The court considered the costs aftermath of a huge claim undertaken on a no win no fee basis and failing. The funder of the claim complained at an award of costs against it.
Held: Those who fund litigation must accept that their risks extend . .
CitedNelson v Greening and Sykes (Builders) Ltd CA 18-Dec-2007
The builders had obtained a charging order for the costs awarded to them in extensive litigation, and a third party costs order but without the third party having opportunity to test the bill delivered. They had agreed to sell land to the defendant, . .
CitedExcalibur Ventures Llc v Texas Keystone Inc and Others CA 18-Nov-2016
Excalibur had entered into a conditional fee agreement with its solicitors to suport its intended claim against the respondents. Funders had advanced some andpound;13m to take the mater forward. . .

Lists of cited by and citing cases may be incomplete.

Costs, Defamation

Leading Case

Updated: 01 November 2021; Ref: scu.171283