Legal News

Litigation costs against company directors and shareholders (Spartafield v Penten Group)

Published on: 26 June 2017

Table of contents

  • Original news
  • What are the practical implications of this case?
  • What was this case about?
  • What were the facts?
  • What did judge decide?
  • What considerations apply when seeking a non-party costs order against a sole director of a company?

Article summary

Dispute Resolution analysis: Matthew Winn-Smith, barrister at Lamb Chambers considers the case of Spartafield Ltd v Penten Group Ltd. The court examined the circumstances in which a non-party director and sole shareholder of a litigant company may be ordered to pay the costs of unsuccessful litigation. Directorship and sole ownership are not sufficient factors, in themselves, to generate such a potential liability. Additional factors are needed which relate to the funding of the litigation, the extent of personal benefit to be derived by the non-party and the conduct of the director. However, the analysis relates very much to the application of principles, not rules, and each case must be determined on a fact-sensitive basis.

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