Court Orders Litigation Funder To Give Security For Costs

In a recent decision the High Court has confirmed that a defendant is able to obtain security for its costs from a claimant's litigation funder.

The issue arose in the context of the RBS Rights Issue Litigation; long-running proceedings involving multiple claimants and managed under a Group Litigation Order. By April 2017, many of the claimants had settled their claims against the defendant, RBS, leaving one remaining group of claimants, the SG claimants still in active litigation.

RBS applied for security for costs in the sum of £11.6m against the SG claimants' litigation funders Hunnewell Partners (BVI) Limited ("Hunnewell") and London and Northern Capital Partners Limited, ("LNCP"). The application was brought on the basis that, although not parties to the litigation, the claimants' funders were persons who may be liable in respect of any adverse costs order which may be made against the claimants at trial. Both Hunnewell and LNCP opposed the application.