- Court of Appeal considers non-party cost orders (Sony/ATV Music Publishing LLC v WPMC)
- What are the practical implications of this case?
- What was the background?
- The law in this area
- What did the court decide?
- Case details
Dispute Resolution analysis: The Court of Appeal overturned an order requiring a company director and majority shareholder to pay the significant costs incurred when the defendant company was itself unable to meet the legal bill of the winning opponent. While the individual, Mr Bailey, had provided funding and assisted in running what proved to be an unsuccessful defence, he had acted in reliance on legal advice. Critical to this decision was the absence of any early warning from the other side that it planned to go after Mr Bailey despite having been told, a year before trial, that the defendant company was bereft of assets. The issue was only raised a year after the claimant had secured judgment. An early warning might well have had a dramatic impact upon the litigation. The risk of a possible adverse personal costs liability could have led to the case being abandoned or it might have prompted the acquisition of costs liability insurance. It was manifestly unreasonable to impose an unexpected, significant costs liability absent such a clear, early warning. Written by professor Dominic Regan, of City Law School, London, and special advisor to the Association of Costs Lawyers.
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