Description
An application for costs against solicitors of unsuccessful defendants following a finding that a funding agreement had been validity terminated, raising the issue of whether the solicitors were a party to the action, and if not, whether the court should exercise its discretion to make an order against a non-party under
ss. 51(1) and (3), Senior Courts Act 1981.
Application dismissed. Held: The mere presence of a defendant in an action, although providing a technical basis of jurisdiction, is insufficient to justify the making of a costs order against them where they are not joined by a subsequent court order which is heard and determined as between other parties.
Costs orders against non-parties are exceptional but will be justified where the non-party is the real party to the litigation, to the extent that they fund, substantially control and would benefit from the proceedings (per
Dymocks Franchise Systems v Todd [2004] UKPC 39). Those three elements are examined in more detail where the non-party is the solicitor to an unsuccessful litigant. The existence of funding by a solicitor or a potential benefit if success enables a client to pay are, of themselves, insufficient grounds for concluding that the solicitor is a real party. There must be an indication that the solicitor has acted in a way which is outside the proper discharge of their professional obligations in the conduct of the litigation. Lack of congruence between the interests and motivations of the solicitor and the client may be a relevant factor, depending on the facts of the case.
The present case was typical - it was not appropriate to make an order under the 1981 Act.
