A section 51 non-party costs application should not be used as a substitute for the pursuit of a related cause of action against the non-party in ordinary proceedings. 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 action in respect of evidence given during those proceedings. One reason for this immunity is so that witnesses may give their evidence fearlessly.
Balcolmbe LJ said: ‘. . insofar as a witness in proceedings may lead to an application for the costs of those proceedings against him or his company, it introduces yet another exception to a valuable general principle.’
. . And ‘(1) Where a person has some management of the action, e.g. a director of an insolvent company, who causes the company improperly to prosecute or defend proceedings . .
(2) Where a person has maintained or financed the action . . (4) Where the person has caused the action . . I accept that these categories are neither rigid nor closed. They indicate the sorts of connection which have so far led the courts to entertain a claim for costs against a non-party.’
Judges:
Balcombe LJ
Citations:
Gazette 16-Jun-1993, Independent 14-May-1993, Times 04-May-1993, [1994] QB 179, [1993] 4 All ER 143, [1993] 3 WLR 830
Statutes:
Jurisdiction:
England and Wales
Citing:
Cited – Taylor v Pace Developments CA 1991
Lloyd LJ said: ‘There is only one immutable rule in relation to costs, and that is that there are no immutable rules.’
Lloyd LJ baulked at the suggestion that every director who funded and controlled litigation on behalf of an insolvent company . .
Cited by:
Cited – Murphy, and Murphy v Young and Co’s Brewery Plc, Sun Alliance and London Insurance Plc CA 20-Nov-1996
When an unsuccessful party has had its legal costs funded under legal expenses insurance, should the insurer be held liable to pay the successful party’s costs? The insurer had not instigated the litigation, nor controlled it, and could not be . .
Applied – Wiggins v Richard Read (Transport) Ltd CA 14-Jan-1999
When deciding to order costs against a non-party, it was not enough to identify the non-party closely with a party, but must follow all the guidelines set out in Symphony. The White Book note 62/2/7 is inadequate in its description of the rules. . .
Cited – 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 . .
Cited – Myatt and others v National Coal Board (No 2) CA 16-Mar-2007
The parties had been involved in compensation claims. Complaint was made that the solicitors had recovered fees for action which substantially was intended to benefit the solicitor. The conditional fee agreements had been found to be unenforceable. . .
Cited – Chantrey Vellacott v The Convergence Group Plc and others ChD 31-Jul-2007
The claimants, a firm of accountants, sued their former clients for unpaid fees. The defendant company counterclaimed for professional negligence. The claimant had expended andpound;5.6m in costs. The claimants now sought a non-party costs order . .
Cited – Lingfield Properties (Darlington) Ltd v Padgett Lavender Associates QBD 18-Nov-2008
Application for non-party costs order against litigation funder. The third party denied that he was a person against whom an order could be made, and denied his formal involvement in the companies funding the litigation.
Held: Such an order . .
Cited – Ridehalgh v Horsefield; Allen v Unigate Dairies Ltd CA 26-Jan-1994
Guidance for Wasted Costs Orders
Guidance was given on the circumstances required for the making of wasted costs orders against legal advisers. A judge invited to make an order arising out of an advocate’s conduct of court proceedings must make full allowance for the fact that an . .
Cited – Mengiste and Another v Endowment Fund for The Rehabilitation of Tigray and Others ChD 26-Mar-2013
The defendants were seeking an order for wasted costs against the solicitors for the claimants. The claimants had requested the judge to recuse himself from hearing that complaint. He now gave his reasons for refusing that request. . .
Cited – Weatherford Global Products Ltd v Hydropath Holdings Ltd and Others TCC 10-Oct-2014
Application by successful party to join a third party so as to make costs order against him. . .
Cited – Davies v Forrett and Others QBD 23-Jun-2015
The claimant had been very severely injured as a passenger in a car (uninsured) which had attempted an overtaking manouvre past three cars. One pulled out, and the car in which he was a passenger swerved off the road and crashed. Damages were now . .
Cited – Goknur v Aytacli CA 13-Jul-2021
Third Party Costs – Director of Insolvent Company
(Organic Village) The Court considered the circumstances Limited in which a director and shareholder of an insolvent company may be personally liable for some or all of that company’s costs liabilities incurred in unsuccessful litigation, pursuant . .
Cited – Travelers Insurance Company Ltd v XYZ SC 30-Oct-2019
Challenge to the making of a non-party costs order under section 51 of the Senior Courts Act 1981 against the product liability insurer of one of the defendants in litigation being managed under a Group Litigation Order (‘GLO’). Many of the . .
Cited – HB v PB FD 9-Jul-2013
Claim for costs against third party local authority, Croydon LBC after four day private law fact finding hearing. F said that M had fabricated illnesses both in herself and the child leading to the LA being asked to prepare a report. That report . .
Lists of cited by and citing cases may be incomplete.
Costs, Litigation Practice
Updated: 04 May 2022; Ref: scu.89666