The RBS Rights Issue Litigation [2017] EWHC 1217 (Ch) (23 May 2017)

The RBS Rights Issue Litigation [2017] EWHC 1217 (Ch) (23 May 2017)

Security for costs is ordered against Hunnewell BVI and LNCP under CPR 25.14(2)(b) and Section 51, as both are commercial litigation funders with insufficient evidence of financial standing, imminent receipt of settlement proceeds notwithstanding, and a real risk exists that adverse costs orders may not be satisfied. The lateness of the application does not outweigh the risk of non-payment, given the changed risk profile after settlements and lack of adequate ATE insurance.

Citation
[2017] EWHC 1217 (Ch)
Parties
Defendants/applicants: Royal Bank of Scotland (RBS) and its then directors; First Respondent (funder): Hunnewell Partners (BVI) Limited; Second Respondent (funder): London and Northern Capital Partners Limited (LNCP)
Jurisdiction
England and Wales
Judgment Date
23 May 2017
Procedural Posture
Group Litigation Order (glo) Security for Costs Application / Interlocutory Application for Security for Costs Against Non Party Funders
Outcome
Security for costs ordered against Hunnewell BVI and LNCP.
Legal Topics
Security for Costs, Non Party Costs Orders, Litigation Funding Liability, Group Litigation Order, After the Event Insurance (ate)
Civil Procedure Litigation Funding Costs Security for Costs Non Party Costs Orders Litigation Funding Liability Group Litigation Order After the Event Insurance (ate)

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Parties

Royal Bank of Scotland (RBS) and its then directors

Defendants/applicants

Hunnewell Partners (BVI) Limited

First Respondent (funder)

London and Northern Capital Partners Limited (LNCP)

Second Respondent (funder)

Procedural Posture

Group Litigation Order (glo) Security for Costs Application / Interlocutory Application for Security for Costs Against Non Party Funders

Legal Issues

  1. 1 Whether security for costs should be ordered against non-party litigation funders under CPR 25.14(2)(b) and Section 51 of the Senior Courts Act 1981
  2. 2 Whether the applications are too late to warrant an order
  3. 3 Whether there is a real risk of non-payment of adverse costs

Ratio Decidendi

Security for costs is ordered against Hunnewell BVI and LNCP under CPR 25.14(2)(b) and Section 51, as both are commercial litigation funders with insufficient evidence of financial standing, imminent receipt of settlement proceeds notwithstanding, and a real risk exists that adverse costs orders may not be satisfied. The lateness of the application does not outweigh the risk of non-payment, given the changed risk profile after settlements and lack of adequate ATE insurance.

Court Disposition

Security for costs ordered against Hunnewell BVI and LNCP.

Orders

  • Hunnewell BVI to provide security for costs in the sum of £8.7 million.
  • LNCP to provide security for costs in the sum of £2.9 million.