A Reminder That Costs Are Always Discretionary

Whilst the general rule in the courts of England and Wales is that the loser pays the winner's costs, it is important to remember that the court has a wide discretion when it comes to costs orders. Section 51 of the Senior Courts Act provides that the Court shall have "full power to determine by whom and to what extent the costs are to be paid". It is for this reason that when considering the economics of funding applications, third party funders usually take no account of the possibility of recovering costs from the opponent.

On 24 April 2018 Hildyard J handed down his judgment in the case of Lehman Brothers International (Europe) (In Administration) [2018] EWHC 924 (Ch). This case dealt with the issue of costs in a tranche of the Lehman Waterfall proceedings. The basis of the substantive proceedings is not relevant for the purpose of this article, save to say that the joint administrators had applied to court for directions as regards the entitlement of creditors to payment of statutory interest prior to distribution of surplus...