Abraham v Thompson

JurisdictionEngland & Wales
JudgeLloyd J,Millett,Potter L JJ.
Judgment Date24 July 1997
CourtCourt of Appeal (Civil Division)
Date24 July 1997
Abraham and Another
and
Thompson and Others

Before Lord Justice Millett and Lord Justice Potter

Court of Appeal

Costs - limit to security for costs order

Limit to security for costs orders

The court had no inherent jurisdiction to order a plaintiff to give security for costs outside the complete regime provided in Order 23 of the Rules of the Supreme Court and section 726 of the Companies Act 1985 in respect of limited companies unless a situation amounting to an abuse of process existed.

The right of a plaintiff to bring a properly pleaded and constituted action in good faith took precedence over the interest of a defendant who might be unable to recover costs against an impecunious plaintiff. It was preferable that a successful defendant should suffer the injustice of irrecoverable costs than that a plaintiff with a genuine claim should be prevented from pursuing it.

Where a defendant suspected that a plaintiff was being funded by a third party and that any costs order made against the plaintiff at trial might be difficult to enforce, the proper course was to allow the action to proceed to trial then if the need arose, to make an application under section 51(1) of the Supreme Court Act 1981 for the third party to pay the defendant's costs.

The Court of Appeal so held, allowing an appeal by the plain tiffs against an order of Mr Justice Lloyd (The Times May 15, 1997) that the first plaintiff, Roger Adrian Abraham, disclose to the fifth and sixth defendants, Domingos Antonio Martins Da Silva and Jose Humberto Mendoza De Sousa, whether and if so what third parties were funding his costs of the action.

Mr Stanley Burnton, QC and Mr Kenneth MacLean for the appellant; Mr Michael Bloch and Miss Camilla Bingham for the respondents.

LORD JUSTICE POTTER reviewed the authorities and said that the stay was sought on the basis of the dicta of Lord Justice Kennedy in Condliffe v HislopWLR ([1996] 1 WLR 753) that if the circumstance suggested that if the litigating party were to lose, an order for costs would be difficult to enforce against the maintainer then a stay could be imposed. His Lordship disagreed with that observation.

The starting point for cases where a stay was sought in circumstances not provided for by statute or the Rules of the Supreme Court should be the fundamental principle that an individual, who was not under a disability, a bankrupt or a vexatious litigant, was entitled to untrammelled access to a court of first instance in...

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1 firm's commentaries
  • Litigation Funding In Jersey
    • Jersey
    • Mondaq Jersey
    • 27 August 2013
    ...they should be stayed. However, the Court preferred the reasoning in the various subsequent authorities such as Abraham v Thompson [1997] 4 All ER 362 to the effect that even if a funding agreement was found to be champertous, it would not be right for the Court to stay the "A person bringi......

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