Kerry Underwood

ARKIN FUNDERS’ CAP SCRAPPED BY COURT OF APPEAL

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Chapelgate Credit Opportunity Master Fund Ltd v Money & Ors [2020] EWCA Civ 246

the Court of Appeal upheld the High Court’s ruling imposing a costs order on a litigation funder above the Arkin cap, that is a cap limiting the order to a sum equal to the funding provided.

That original judgment –

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

was reported by in my blog –

LITIGATION FUNDERS’ LIABILITY NOW UNCAPPED: ARKIN NOT FOLLOWED.

The Court of Appeal took into account the fact that funders could now protect themselves with After-the-Event insurance, something which may have been less easy at the time of the Arkin case –

Arkin v Borchard Lines Ltd (Nos 2 and 3) [2005] EWCA Civ 655.

In waiving its requirement that its funded claimant obtain ATE insurance, the funder had substantially increased the successful Respondents’ financial exposure.

Here, from the date of the funding agreement, the funder funded all the claimant’s costs, and stood to receive a profit of five times its expenditure.

The judge had also been entitled to consider whether the Arkin cap would leave Respondents out of pocket.

Given the serious allegations against the Respondents, the nature of which meant they could not be expected to share lawyers, their costs would inevitably significantly exceed the funder’s investment.

“Judges…retain a discretion and, depending on the facts, may consider it appropriate to take into account matters other than the extent of the funder’s funding and not to limit the funder’s liability to the amount of that funding.”

Written by kerryunderwood

February 28, 2020 at 9:34 am

Posted in Uncategorized

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