Arkin v Borchard Lines Ltd & Ors

Arkin v Borchard Lines Ltd & Ors

A professional litigation funder who finances part of a claimant’s costs under a non-champertous agreement and stands to benefit commercially should be liable for the successful opposing parties’ costs, but only up to the amount of funding provided. This balances access to justice with fairness to successful parties. The costs order against Borchard was unjust and should be replaced with an order that the costs of instructing experts be shared equally among the six main parties, with all other costs to lie where they fall.

Parties
Claimant: Yeheshkel Arkin; Defendant: Borchard Lines Ltd; Defendant: Camomile Lines PLC; Defendant: Furness Withy (Shipping) Ltd; Defendant/part 20 Defendant: Zim Israel Navigation Co Ltd; Part 20 Defendant: Deutsche Nah-Ost Linien GmbH & Co KG (DNOL); Part 20 Defendant: KNSM-Kroonbergh BV; Non Party Funder/11th Part 20 Defendant: Managers & Processors of Claims Ltd (MPC)
Jurisdiction
England and Wales
Judgment Date
26 May 2005
Procedural Posture
Civil Appeal / Appeal From Commercial Court (queen’s Bench Division) to Court of Appeal
Outcome
Appeal allowed in part; cross-appeal allowed in part; MPC ordered to pay £1.3 million towards defence costs; costs of instructing experts to be shared equally among six parties; all other costs to lie where they fall.
Legal Topics
Non Party Costs Orders, Litigation Funding, Champerty, Access to Justice, Apportionment of Costs, Competition Law (articles 81 and 82 Ec)
Civil Procedure Costs Competition Law Non Party Costs Orders Litigation Funding Champerty Access to Justice Apportionment of Costs +1 more

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Parties

Yeheshkel Arkin

Claimant

Borchard Lines Ltd

Defendant

Camomile Lines PLC

Defendant

Furness Withy (Shipping) Ltd

Defendant

Zim Israel Navigation Co Ltd

Defendant/part 20 Defendant

Deutsche Nah-Ost Linien GmbH & Co KG (DNOL)

Part 20 Defendant

KNSM-Kroonbergh BV

Part 20 Defendant

Managers & Processors of Claims Ltd (MPC)

Non Party Funder/11th Part 20 Defendant

Procedural Posture

Civil Appeal / Appeal From Commercial Court (queen’s Bench Division) to Court of Appeal

Legal Issues

  1. 1 Whether a professional litigation funder (MPC) should be liable for the defendants’ costs after the funded claim failed
  2. 2 Proper apportionment of costs between defendants and Part 20 defendants in complex multi-party litigation
  3. 3 Principles governing non-party costs orders against commercial funders

Ratio Decidendi

A professional litigation funder who finances part of a claimant’s costs under a non-champertous agreement and stands to benefit commercially should be liable for the successful opposing parties’ costs, but only up to the amount of funding provided. This balances access to justice with fairness to successful parties. The costs order against Borchard was unjust and should be replaced with an order that the costs of instructing experts be shared equally among the six main parties, with all other costs to lie where they fall.

Court Disposition

Appeal allowed in part; cross-appeal allowed in part; MPC ordered to pay £1.3 million towards defence costs; costs of instructing experts to be shared equally among six parties; all other costs to lie where they fall.

Orders

  • MPC to pay £1.3 million by way of contribution to defence costs, apportioned among the six parties in proportion to their costs incurred.
  • On assessment, the costs incurred by the DAC parties and Zim in instructing experts (including legal costs associated) to be ascertained and shared equally (one-sixth each) by Borchard, the four DAC parties, and Zim.