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Non-party costs orders

Litigation Letter

Non-party costs orders

Lingfield Properties (Darlington) Ltd v Padgett Lavender Associates [2008] EWHC 2795 QBD 18 November

A company official who was not a director had been the principal person involved in managing the company’s claims. He was the company secretary and a former director of the claimant company, whose parent company was wholly owned by a trust in favour of the company secretary’s children. The claim depended upon the evidence he had given and he was the only person through whom the company had acted. He had also arranged the funding of the claim, although he had not funded it personally. Nevertheless, the court held that it was clear he was not the real party to the claim even though he had assumed the role normally played by a solicitor. There was no basis for challenging the evidence as to the control exercised by the board over the litigation, and it was clear that the board probably did apply their minds independently to the matters to be decided in the litigation. The company risked its own assets and made arrangements for funding the litigation that did not materially depend upon the financial contribution of the company secretary. The company was the real party to the litigation and therefore an application to join the company secretary personally as a party to the proceedings for the purposes of a non-party costs order following judgment against the company, was dismissed.

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