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High Court rejects suggestion that the Arkin cap must be applied in every case (Davey v Money)

Published on: 24 April 2019
Published by: LexisPSL
  • High Court rejects suggestion that the Arkin cap must be applied in every case (Davey v Money)
  • What are the practical implications of this case?
  • What was the background?
  • What did the High Court decide?
  • Case details

Article summary

Dispute Resolution analysis: Mr Justice Snowden did not apply the Arkin cap in circumstances where the litigation funder had invested £1,275,166.34 but the adverse costs stood at about £4.33m. The judgment demonstrates that, in appropriate cases, especially those involving an award of costs on the indemnity basis, the Arkin cap (derived from the Court of Appeal decision in Arkin v Borchard Lines Ltd [2005] EWCA Civ 655, may not be applied. The judge had regard to the fact that costs were awarded on the indemnity basis and did not accept that this decision would discourage litigation funders. The judge distinguished this case from that of Arkin, but also indicated that the approach taken by the Court of Appeal in that decision was not the only approach. However, the litigation funder’s liability for adverse costs was confined to the costs incurred from the date of the funding arrangement. The funder, whose profit took priority over any compensation, was said to be the party with the primary interest in the claim. Written by Nicholas Lee, Managing Director and Costs Lawyer at Paragon Costs Solutions. or take a trial to read the full analysis.

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