“54. Given that proof of causation is a necessary pre-condition of the making of a Section 51 order against a non-party – as to which there is ample authority and, as I understand it, no dispute – Mr Wardell submits that the bare facts just recited demonstrate of themselves that in Lord Portsmouth’s case, such proof was wanting – that, indeed, Lord Portsmouth’s contribution plainly did not cause Mr Al Fayed to incur any costs which he would not otherwise have incurred … 56. … The mere fact that the later contributors knew nothing of the Rubicon having been crossed [i.e. the decision to proceed to trial] cannot logically avail Mr Al Fayed. Nor can the fact that the solicitors no doubt hoped for and perhaps even expected further contributions to be made. 57. The argument, I have to say, appears to me not merely irresistible but also to demonstrate that there would need to be further factual exploration along these lines in all pure funding cases were they not to be subject to a general presumption against Section 51 liability in any event…”
“Although the position may well be different when a number of non-parties act in concert, their Lordships are content to assume for the purposes of this application that a non-party could not ordinarily be made liable for costs if those costs would in any event have been incurred even without such non-party’s involvement in the proceedings.”
“This decision demonstrates a proposition that [counsel] has not sought to challenge. Funding alone will not justify an order against the funder under s.51. I do not consider that an order under s.51 will normally be appropriate where a disinterested relative has, out of natural affection, funded costs of a claim or a defence that is reasonably advanced.”
“Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party’s costs.”
“It is not, however, sufficient to render a director liable for costs that he was a director of a company and caused it to bring or defend proceedings which he funded and which ultimately failed. Where such proceedings are brought bona fide and for the benefit of the company, the company is the real plaintiff. If in such a case an order for costs could be made against a director in the absence of some impropriety or bad faith on his part, the doctrine of the separate liability of the company would be eroded and the principle that such orders should be exceptional would be nullified.”