Costs were to be sought against third parties to the action. A pupil had taken court action against the school seeking damages, alleging that it had failed to protect him from bullying. His action was discontinued. The school now sought its costs (andpound;250,000) from his parents, who had funded their son’s claim. The school sought disclosure of various documents.
Held: The court had power to make any necessary ancillary orders in a costs application. General principles were set down: ‘i) The order for payment of costs by a non-party would always be exceptional and any application should be treated with considerable caution.
ii) The application should normally be determined by the trial judge who could give effect to any views he had expressed as to the conduct of the non-party without constituting bias or the appearance of bias.
iii) The mere fact that someone has funded proceedings would generally be insufficient to support an application that they pay the costs of the successful party. Pure funders, as described at the case of Hamilton v Al-Fayed No. 2 [2002] EWCA Civ 665 reported [2003] QB 117 at [40], will not normally have the discretion exercised against them. That definition of ‘pure funders’ means those with no personal interest in the litigation, who do not stand to benefit from it, are not funding it as a matter of business and in no way seek to control its course.
iv) It is relevant but not decisive that the defendant has warned the non-party of the intention to seek costs or that the non-party’s funding has caused the defendant to incur the costs it would not otherwise have had to incur;
v) The conduct of the non-party in the course of the litigation and other than as a pure witness of material fact is of relevance and potential weight.
vi) Most of the decided cases on the exercise of the court’s discretion under section 51 concerned commercial funders or corporate bodies closely associated with the party who incurred the costs liability which they were unable to satisfy. In the family context, the courts have been reluctant to impose third party costs orders against those family or friends who in the interests of access to justice assist a party to come to court for philanthropic and disinterested reasons.
vii) In determining these applications the court must exercise its case management powers to ensure that the application does not turn into satellite litigation that results in prolonged, complex and over-extended arguments about costs about costs. For that reason the inherent strength of the application is always a relevant factor.’
In this case the parents were not acting in a disinterested fashion. There was a reasonable prospect of the claim for third party costs succeeding, and appropriate disclosure was ordered.
Blake J
[2009] EWHC 2374 (QB), [2010] CP Rep 5
Bailii
Supreme Court Act 1981, Civil Procedure Rules 48.2
England and Wales
Citing:
Cited – Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others (No. 2) PC 21-Jul-2004
PC (New Zealand) Costs were sought against a non-party, following an earlier determination by the Board.
Held: Jurisdiction to make such an order was not complete. Where the order sought was against a . .
Cited – Grecoair Inc v Tilling and others QBD 14-Jan-2009
The court has power to exercise disclosure orders in order to facilitate in an economical fashion a fair hearing of the application, although disclosure is often made without formal order. . .
Cited – PR Records Ltd v Vinyl 2000 Limited and others ChD 15-Jan-2008
The defendant in the main action sought a third party costs order. . .
Lists of cited by and citing cases may be incomplete.
Costs, Litigation Practice, Civil Procedure Rules
Updated: 01 November 2021; Ref: scu.375580