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Third party costs order made against a sole director of a claimant company

17 May 2016

A claim which was brought and funded by the sole director (W) of the claimant company, Justmahe Inc (JI), was struck out due to his failure to provide security for costs. In addition, a third party costs order was made against him in favour of the defendant, Marinika Yevgenyevna Smirnova (MYS).

W had unlimited authority to act on behalf of the company, which had no assets. MYS argued that W was to benefit from the claim, and these proceedings caused her to incur costs, and cost orders made against the company in her favour had not been paid.

It was held that this was an exceptional case where W was the real party to the litigation, who had funded it. Although the claim had been struck out, this did not mean that it was unjust to make a third party costs order against him.

Third parties who fund and control proceedings should be aware that should your claim fail, you may be liable to pay the successful party’s costs.

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