The Court of Appeal has upheld a judge's order imposing
indemnity costs on third-party funders.
In Excalibur Ventures LLC v Texas Keystone Inc & Others
[2016] EWCA Civ 1144, the claimant used commercial third-party
funding to pursue a claim of US$1.65 billion, including claims for
breach of contract, business torts, breach of fiduciary duty, and
fraud. The latter claims included allegations of personal
dishonesty against a representative of one defendant. The claim was
not only unsuccessful, but was characterised by the first-instance
judge as "speculative and opportunistic",
"objectively hopeless" and "based on no sound
foundation in fact or law". The judge found that to a large
extent, the facts and matters which led to the defeat of the action
were known to the claimant before commencing the proceedings, which
he said were an "elaborate and artificial construct"
rooted in misrepresentations. He ordered the claimant to pay
indemnity costs and, when the claimant
