Julian Miller & Dan Silver report on potential adverse costs liabilities in group litigation
The general rule in litigation is that all claimants and all defendants are jointly and severally liable for all costs awarded against them (see, eg, Stumm v Dickson (1889) 22 QBD 529). However, in Ward v Guiness Mahon [1996] 1 WLR 894, the Court of Appeal held that the claimants’ liability for adverse common costs should be several and not joint. The judge in Andrew Brown & Others v InnovatorOne Plc [ 2012] EWHC 1321 (Comm) litigation had to consider the applicability and relevance of the Ward decision to a modern action by a group of investors in the context of a very different litigation landscape.
Ward concerned an action by investors against the sponsor of a prospectus seeking subscriptions for shares issued by certain retail companies. The investors’ claims failed and a costs order was made against the lead plaintiffs on a joint and several basis. The Court of Appeal overturned this decision. It held that
