RECOVERING LITIGATION FUNDING COSTS: A HIGH COURT CASE -BUT ABOUT ARBITRATION PROCEEDINGS
I am grateful to Professor Dominic Regan and Nicholas Bacon QC for sending me a copy of the decision in Essar Oilfields -v- Norscot  EWHC 2361 (Comm).A decision of His Honour Judge Waksman QC sitting as a Judge of the High Court. (Judgment available here essar-oilfields-v-norscot-15-09-16jud-1-2)
- The phrase “other costs of the parties” in s.59(1)(c) of the Arbitration Act 1996 includes the costs of obtaining funding.
- Whether to award those costs was always a matter of discretion for the arbitrator.
This case probably marks a major difference between costs recoverable in arbitration and in litigation. It is unlikely that the costs of litigation funding will be found to be recoverable as costs in litigation.
Essor was seeking to set aside part of an arbitrator’s award whereby the costs of litigation funding was allowed as part of the arbitration.The arbitrator held that he was entitled so to order in his discretion, because such litigation funding costs were “other costs” for the purpose of s.59(1)(c) of the Arbitration Act 1996, which refers to “legal or other costs of the parties”.
THE JUDGE’S FINDINGS
The judge’s primary finding was that the decision was that there was no serious irregularity in the arbitrator’s construction of “other costs”. This was sufficient to deal with the matter. However the judgment went on to consider the arguments in relation to construction.