Arkin caps – CPR 25.14
Summary:
The Court gave guidance on the potential application of the so-called "Arkin cap" to limit the extent of non-party costs orders against a commercial litigation funder.
Longer Text:
A Claimant was ordered to pay £3.9 million towards the Defendant's costs. The Claimant had been funded by a commercial funder, which argued that its total liability should be limited to the overall maximum that it had provided to the Claimant, namely £1.2 million. The Court held that the decision in
Arkin v Borchard Lines Ltd and Others [2005] EWCA Civ 655 was not to be taken as having intended to lay down a rule or guideline to be applied mechanistically in every case involving commercial funders. The Court held on the facts that it would not be just to apply the Arkin cap in the funder's favour. Among other factors, the application of the Arkin cap would insulate the funder from the Indemnity Costs Order which arose from the way in which the claim was pursued. The funder had been closely focussed on its own self-interest in funding the litigation with no correlation between the amount of its investment and the Claimant's exposure to costs. The Claimant's access to justice had been less important to the funder than its return on its commercial investment. The funder was ordered to pay costs incurred after the date of the Funding Agreement.
