A High Court judge was wrong to order a litigation friend, acting for children, to pay costs after unsuccessfully applying to challenge the settlement of a trust dispute, appeal judges have ruled.
Lord Justice Newey said the approach to costs orders involving litigation friends of defendants, and not claimants, should have been applied because the children “were responding to the main proceedings and their exclusion from it”.
Newey LJ said where, as in this case, the litigation friend had not previously given an undertaking to pay costs, the power to make a costs order derived “exclusively” from section 51 of the Senior Courts Act 1981.
Under section 51, the question was whether “in all the circumstances” it was just to make the order.
It would “typically be just” to order a claimant’s litigation friend to pay costs if an order would have been made against the claimant “had he not been a child or protected party”, but the court was exercising a discretion and was entitled to have regard to the circumstances.
“There is no presumption that a defendant’s litigation friend should bear costs which the defendant would have been ordered to pay if not a child or protected party.”
Newey LJ said Mr Justice Morgan “erred in principle” to think that courts should apply a general approach to costs that litigation friends should be liable for those costs which the relevant party, if an adult, would normally have to pay.
The Court of Appeal heard in Glover v Barker and others  EWCA Civ 1112 that the case involved former law firm Baxendale-Walker.
The Court of Appeal ruled in 2017 that the firm should have warned management consultant Iain Barker of the significant risk that a tax avoidance scheme would not withstand a challenge from HMRC. Mr Barker later paid the HMRC £11.3m in a settlement.
Two of Mr Barker’s children, twins Tom and Freya, acting by their mother, Susan Mary Glover, as litigation friend, applied in 2017 for a number of orders. The aim was to revoke or vary an earlier court order from July 2014 that approved settlement of a trust dispute involving Mr Barker and all of his five children. Morgan J dismissed the application in November 2018.
Newey LJ said there was no suggestion that Ms Glover acted in bad faith or stood to gain a “substantial personal benefit” from the twins’ application.
Ms Glover said in her witness statement that, if she had been required by the courts to give an undertaking as to costs on the basis that the twins were ‘claimants’, she would have not acted as litigation friend.
“The twins’ application represented an attempt to remedy what had gone wrong,” Newey LJ said. “Initially, Tom and Freya specifically asked to be joined as defendants.
“That head of relief was not pursued beyond the first hearing of the application, but it remains the case that Tom and Freya were responding to the main proceedings and their exclusion from them.”
In the circumstances, Newey LJ said it appeared to him that the approach governing costs orders against litigation friends of defendants ought to be applied, and there was “no sufficient justification” for the costs orders against Ms Glover.
He allowed her appeal and set aside the costs orders. Lord Justices Moylan and Patten agreed.