Davey v Money & Anor [2019] EWHC 997 (Ch) (17 April 2019)

Davey v Money & Anor [2019] EWHC 997 (Ch) (17 April 2019)

The court held that the Arkin cap is not a binding rule but a guideline; the discretion under Section 51 must be exercised justly. On the facts, given ChapelGate's commercial interest, control, and the absence of ATE insurance for the defendants' protection, it would not be just to limit liability to the amount funded. ChapelGate is liable for the defendants' costs incurred after the funding agreement, on the indemnity basis, without the Arkin cap applying.

Citation
[2019] EWHC 997 (Ch)
Parties
Applicant/defendant: Julie Anne Davey; Respondent/section 51 Applicant (joint Administrator): James Money; Respondent/section 51 Applicant (joint Administrator): Jim Stewart-Koster; Claimant/section 51 Applicant: Dunbar Assets PLC; Section 51 Respondent: Chapelgate Credit Opportunity Master Fund Limited
Jurisdiction
England and Wales
Judgment Date
17 April 2019
Procedural Posture
High Court (chancery Division) Costs Application (section 51 Senior Courts Act 1981) / Post Trial, Determination of Non Party Costs Liability and Application of Arkin Cap
Outcome
Non-party costs order made against ChapelGate for all defendants' costs incurred after 23 December 2015, on the indemnity basis, without limitation by the Arkin cap.
Legal Topics
Non Party Costs Orders, Section 51 Senior Courts Act 1981, Litigation Funding, Arkin Cap, Indemnity Costs, Access to Justice
Civil Procedure Insolvency Litigation Funding Non Party Costs Orders Section 51 Senior Courts Act 1981 Arkin Cap Indemnity Costs Access to Justice

Case Brief

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Parties

Julie Anne Davey

Applicant/defendant

James Money

Respondent/section 51 Applicant (joint Administrator)

Jim Stewart-Koster

Respondent/section 51 Applicant (joint Administrator)

Dunbar Assets PLC

Claimant/section 51 Applicant

Chapelgate Credit Opportunity Master Fund Limited

Section 51 Respondent

Procedural Posture

High Court (chancery Division) Costs Application (section 51 Senior Courts Act 1981) / Post Trial, Determination of Non Party Costs Liability and Application of Arkin Cap

Legal Issues

  1. 1 Whether a non-party costs order should be made against a commercial litigation funder under Section 51 of the Senior Courts Act 1981
  2. 2 Whether the 'Arkin cap' limits the funder's liability to the amount of funding provided
  3. 3 Whether the funder's liability should be for all costs or only those incurred after the funding agreement

Ratio Decidendi

The court held that the Arkin cap is not a binding rule but a guideline; the discretion under Section 51 must be exercised justly. On the facts, given ChapelGate's commercial interest, control, and the absence of ATE insurance for the defendants' protection, it would not be just to limit liability to the amount funded. ChapelGate is liable for the defendants' costs incurred after the funding agreement, on the indemnity basis, without the Arkin cap applying.

Court Disposition

Non-party costs order made against ChapelGate for all defendants' costs incurred after 23 December 2015, on the indemnity basis, without limitation by the Arkin cap.

Orders

  • ChapelGate to pay the defendants' costs incurred after 23 December 2015 on the indemnity basis, to be assessed if not agreed.
  • No cap applied to ChapelGate's liability under the Arkin principle.