Against non-party director

Goodwood Recoveries Ltd v Breen: Breen v Slater [2005] EWCA Civ 414; SJ 29 April

Michael Slater controlled the claimant debt recovery company and was also a consultant solicitor in a firm which funded proceedings brought by the company under a conditional fee agreement. The costs of the litigation brought by the claimant company would not have been incurred without Mr Slater’s involvement. He formulated the claim and brought it, albeit in the name of the company. He was the real party for whose benefit the litigation was brought. He did not fund it, but only because it was funded under a CFA by the firm of solicitors for which he acted as a consultant and in whose name he undertook the conduct of the litigation. A lack of bona fides is not necessarily a condition of claiming against a third party, if the third party was really the party for whose benefit the case was conducted, but in any event the whole of the costs of the litigation were caused by Mr Slater’s dishonesty or impropriety, irrespective of whether he had any bona fide belief in the claim. Therefore it was not necessary to decide whether there was a causal link between all the costs and the alleged impropriety, it was appropriate to order Mr Slater to pay the whole of the costs and not merely the additional costs which could be attributed directly to improper conduct on his part.