NON-PARTY COSTS ORDERS (NPCO):
- Jun 23, 2025
- 12 min read
Updated: Feb 8
IN JUNE 2025 THE COURT OF APPEAL (COA) WHILE ALLOWING THE 2 CONJOINED APPEALS IN TESCHER -v- DIRECT ACCIDENT MANAGEMENT LTD [2025] EWCA Civ 733 THE COURT MADE A NPCO AGAINST A CREDIT HIRE COMPANY.
Non-Party Costs Orders are exceptionally rare. They are a draconian remedy entirely at the discretion of the courts and we are one of the very few law offices to succeed in acquiring them. Further, we were able to realise the asset through a successful Charging Order and subsequent order for Vacant Possession and Sale. Before considering the ratio in Tescher, this article provides a general comprehensive overview as to what NPCOs and when the court might make you liable for someone else's legal costs.
EXCLUSIONS:
CONTENT & ADVICE: As with al content published on our website, this article does not constitute legal advice and you are referred to this site's terms and conditions of use accordingly.
CRIMINAL LAW: Nothing in this article relates to criminal law which is entirely different to civil law.
SYNOPSIS
For a concise synopsis of the law relating to NPCOs in Credit Hire, please click and expand below:
WHAT ARE NON-PARTY COSTS ORDERS?
Pursuant to s.51 Senior Courts Act 1981 the courts have the power to order that the financial costs of litigation be paid by non-parties.
What this means is, even if you were NOT a named party in the proceedings, the court can order that YOU pay the legal costs for one of the parties who were. To use a real example referred to the above (Please note 'Renwick' is a clan):
I-Design Construction Ltd vs. David William Renwick: In this matter, the court ordered that the directors of I-Design Construction Ltd, Mr Paul William Archer and Mr James Hooker to pay the legal costs of Mr David William Renwick. This was after the directors had defrauded a vulnerable pensioner then attempted to escape liability using legal minors.
The court made a NPCO against the directors of the company whom had been using the company as a vehicle for fraud. Their standard MO was to enter properties under the guise of completing construction works, strip the property selling whatever it was that they found, charge vulnerable couples for building materials not used, cover the theft up all with plaster and then finally abandon site complaining of non-payment for 'extra work.' The Ltd itself, would never have any assets, cash or insurance.
The company itself, never had any cash, assets or insurance. What that meant was any victor over IDC in litigation, would receive absolutely nothing as the directors (being the only shareholders) had already pocketed all the cash. Even worse, the victor would have lost even more money having to pay a solicitor just to get a pointless paper order.
Unless that is, the court would order 'the real party' to the litigation i.e. the directors, to pay the costs.
For the avoidance of doubt, a Non-Party Cost Order does NOT relate to a party's damages/compensation. It only relates to the legal cost of the litigation i.e. court, barrister, solicitor and experts bills.
WHEN SHOULD A NON-PARTY COSTS ORDER BE USED?
The court should make a NPCO against the 'real party' in litigation. This to ensure the administration of real justice. i.e. the order should be made against 'the financer' of the vanquished litigant providing the financer was in control of the litigants actions. The real vanquished litigant should not be able escape justice hiding behind 'front men', 'fake companies' and in the case of construction disputes, 'incomprehensible incompetent workmanship' (a builder can only pretend to be so stupid before its fraud).
Ultimately, when considering making an NPCO the court should consider whether they have been responsible for bringing the proceedings and that those proceedings are brought in bad faith or for some ulterior motive, or there is some other conduct which makes it just and reasonable to make the Order (Dymocks at paragraph 25; Arkin).
The 'Real Party' in litigation, needs to have a financial interest in the proceedings (Latimer Management Consultants Ltd v Ellingham Investments Ltd [2006] EWHC 3662 (Ch)).
What that means however, is an individual does NOT have a seeming 'automatic right' to an NPCO and/or, the is no obligation on the courts to award you an NPCO. These orders are entirely discretionary with the only immutable principle being that they MUST be exercised justly (Deutsche Bank AG v Sebastian Holdings Inc and another [2016] EWCA Civ 2).
To persuade the court that it would be just to grant an NPCO, a litigant should refer to the past case law which we examine in the 'Jurisdiction' part below.
HOW/WHAT IS THE PROCEDURE FOR OBTAINING A NON-PARTY COST ORDER?
The Procedure governing an application for a Non-Party Costs Order (NPCO) is contained in CPR r.46.2.
This requires an application under CPR Part 23 but it is a summary procedure subject only to CPR r.46.2. However;
Evidence from the main action: may be admissible, provided that the connection of the Non-Party with the original proceedings was so close that he will suffer no injustice if the evidence is admitted (Symphony Group Plc v Hodgson [1994] QB 179). And;
Without Prejudice Evidence: The High Court has held is admissible in an application for an NPCO.
In practice, an application for an NPCO is usually made following judgement at the end of trial to the trial judge. However, this is not pursuant to any rule, judgement or other. An NPCO can be made at any time in the proceedings. BUT;
Failure to provide advance notice to the Non-Party will usually be fatal to the application. However, there are cases where the court has been persuaded to utilise this discretion regardless (Weatherford Global Products Ltd v Hydropath Holdings Ltd and others [2014] EWHC 3243 (TCC)).
We provide our recommended step-by-step procedure/the one we used in I-Design below.
CONSEQUENCES/EFFECT OF A NON-PARTY COSTS ORDER?
Should a successful litigant succeed in securing a NPCO against their vanquished opponent, it:
Does not mean you will be paid: The order creates a legal obligation. It is however, a civil order which needs to be enforced in the usual ways.
To secure the money; NPCO should be followed by a Charging Order and then subject to negotiations, an order for vacant possession and sale.
In I-Design Construction Ltd, the fraudulent directors despite being subject to the NPCO refused to pay and a Charging Order was subsequently placed over the Managing Director's Property while the junior director was placed into bankruptcy. Thereafter, the Managing Director continued to use legal minors, fake addresses, threaten violence and the court evicted both he and all his family from their Property which was subsequently sold to reimburse their victims.
NON-PARTY COSTS ORDER JURISDICTION
The Courts have the power to make a NPCO pursuant to Section 51 of the Senior Courts Act 1981. However, The court's jurisdiction to make such an order under the act was not recognised until Aiden Shipping v Interbulk Ltd (The Vimeira) (No 2) [1986] 1 AC 965., That might be because s.51(3) simply states:
The court shall have full power to determine by whom and to what extent the costs are to be paid.
Excellent, thats very helpful. Turning next to the case law (and leaving sarcasm behind):
In Symphony Group Plc v Hodgson [1994] QB 179 at pages 192-194): the Court laid down general guidelines for the exercise of the jurisdiction regarding costs orders against non-parties. Those guidelines have never been overruled and in Jobanputra and another v Modi and another [2014] EWCA Civ 1046, the Court of Appeal refused to extend the categories of cases justifying non-party costs orders.
However, this office prefers the Privy Council's decision in Dymocks Franchise Systems (NSW) Pty Ltd v Todd and others [2004] UKPC 39, which sought to summarise the many cases. In our experience, the courts find it more useful.
For the avoidance of doubt, the Dymocks summary was applied by the English Court of Appeal in Arkin v Borchard Lines Ltd and others [2005] EWCA Civ 655 a(t paragraphs 36-37 ). Consequently, it is now binding on English courts.
THE DYMOCKS SUMMARY:
Although costs orders against non-parties are "exceptional", exceptional in this context means "no more than outside the ordinary run of cases where parties litigate for their own benefit and at their own expense". The ultimate question in any such exceptional case is whether in all the circumstances it is just to make the order. This is a fact specific jurisdiction[1].
Generally, the jurisdiction will not be exercised against "pure funders[2]". These are "those with no personal interest in the litigation, who do not stand to benefit from it, are not funding it as a matter of business and in no way seek to control its course.[3]" There is a policy argument in favour of assisting access to justice. The court's approach to security for costs is similar.
Where, however, the non-party "not merely funds the proceedings but substantially also controls or at any rate is to benefit from them", they will usually be ordered to pay the costs, if unsuccessful. The non-party "is the 'real party' to the litigation". It is "not necessary that the non-party be 'the only real party' ... provided that they are 'a real party in ... very important and critical respects'." The non- party in these cases is not so much facilitating access to justice for the party they fund but gaining access to justice for their own purposes[4].
It will be exceptional for an order for costs to be made against a non-party where the applicant has a cause of action against the non-party and could have joined them as a party to the original proceedings[5].
The court should be alert to the possibility that an application against a non-party is motivated by resentment of an inability to obtain an effective order for costs against a legally aided litigant[6]
The fact that the Non-Party acted without impropriety or on legal advice does not prevent an order being made against them. While any impropriety or the pursuit of speculative litigation may support the making of an order against a non-party, its absence does not preclude the making of an order[7].
But: "it is wrong to treat the reported cases as providing a comprehensive checklist of factors which must be present in every case before the discretion can be exercised in a particular case. What may be sufficient to justify the exercise of the discretion in one case should not be treated as a necessary factor for the exercise of the discretion in a different case[8]."
There is no scope to order the Non-Party to pay costs beyond those ordered to be paid by the claimant or defendant in the particular litigation[9].
It is not necessary for the non-party to be made exclusively liable for the costs. The court may make an order that he be liable jointly and severally with existing parties[10]. Nor is it necessary for the non-party to be made liable for all the applicant's costs. In the exercise of discretion, the order may be limited to part only of the costs, particularly where there is an issue on the extent to which the costs in question were caused by the conduct complained of.
However, the amount of costs the non-party is ordered to pay will not be limited to the amount of their funding, at least where they were in full control of the litigation and success would have been largely for their own benefit
Where an order is being made against more than one non-party, the liability of all the non-parties can (but need not) be joint and several[11]. The Merchantbridge case also established that there need not be a cap on the liability of a non-party. The fact that the successful claimant's costs are more than the costs of the funded defence does not matter.
We should also add to this list.
Some degree of causation between the Non-Party’s intervention and the Claimant incurring costs is important, although a casual link with the non-recovery of costs as opposed to the incurring of the costs may suffice, that is, the Non-Party caused the company defendant to dissipate its assets such that was nothing to enforce against at the end of the proceedings[20].
Appendix of Cases: Click here to expand a list of cases re re the above.
[1] (Dymocks at paragraph 25; Arkin
[2] Dymocks at paragraph 25; Arkin
[3] Hamilton v Al Fayed and others [2002] EWCA Civ 665 at paragraph 40
[4] Dymocks at paragraph 25; Arkin.
[8] Secretary of State v Aurum Marketing Ltd and another [2000] EWCA Civ 224
[9] Zanussi v Anglo Venezuelan Real Estate and Agricultural Development Ltd Court of Appeal 7 March 1996
[10] R & V Versicherung AG v Risk Insurance and Reinsurance Solutions SA and another [2005] EWHC 2586 (Comm)
[11] Merchantbridge & Co Ltd and another v Safron General Partner 1 Ltd and others [2011] EWHC 1524 (Comm)
[12] Metalloy Supplies v MA (UK) Ltd
[13] Symphony Group Plc v Hodgson [1994] Q.B. 179 (28 April 1993)
[14] Dymocks Franchise Systems (NSW) Pty Ltd v Todd & Ors (No. 2) (New Zealand) [2004] UKPC 39 (21 July 2004)
[15] Weatherford Global Products Ltd v Hydropath Holdings Ltd and others [2014] EWHC 3243 (TCC)
[16] BE Studios Ltd v Smith & Williamson Ltd [2005] EWHC 1506 (Ch) (15 July 2005)
[17] Gardiner -v- FX Music.
[18] Alan Phillips Associates Ltd v Dowling (t/a Joseph Dowling Partnership) [2007] EWCA Civ 64 (12 January 2007)
[19] Weatherford Global Products Ltd v Hydropath Holdings Ltd and others [2014] EWHC 3243 (TCC)
[20] Turvill v Bird and others [2016] EWCA Civ 703 (11 July 2016) & Global Equities Ltd v Globe Legal Services Ltd [1999] BLR 232
NON-PARTY COSTS ORDER PROCEDURE
While the Senior Courts Act 1981 confirm the court's jurisdiction the CPR provides the process.
CPR r.46.2: Costs orders in favour of or against non-parties
(1) Where the court is considering whether to exercise its power under section 51 of the Senior Courts Act 1981 (costs are in the discretion of the court) to make a costs order in favour of or against a person who is not a party to proceedings, that person must –
(a) be added as a party to the proceedings for the purposes of costs only; and
(b) be given a reasonable opportunity to attend a hearing at which the court will consider the matter
further.
(2) This rule does not apply –
.4 where the court is considering whether to –
(i) make an order against the Lord Chancellor in proceedings in which the Lord Chancellor has
provided legal aid to a party to the proceedings;
(ii) make a wasted costs order (as defined in rule 46.8); and
(b) in proceedings to which rule 46.1 applies (pre-commencement disclosure and orders for disclosure
against a person who is not a party).
In I-Design Construction Ltd we utilised the following procedure in accordance with the above:
Request confirmation that the Claimant can satisfy a judgement for the Defendant’s costs? In I-Design, the directors responded dishonestly to say they had capital >£50'000 and had the insurance 'to satisfy any order the court might make.' None of that was ever true, the company had never made a profit but survived by loans and stealing from the HMRC.
Provide notice to the Non-Party understood to be controlling the litigation that an application for Non-Party Costs will be made should the Defendant be unable to satisfy an Order for Costs.
Pursuant to CPR Part 23 apply to the court for order that:
The Non-Party be joined for costs only pursuant to CPR r.46.2.
Pay the Costs to the Extent sought.
The supporting witness statement should set out in full the basis on which the application is made and be served on the respondent and the other parties with supporting evidence.
The respondent may be invited to consent to the application that they be joined. Should they do, directions for further conduct of the application the NPCO such as provision of witness statements will probably be capable of agreement. However;
Should the respondent not consent to be joined, the Application should be listed simply as 1 for joinder of the Non-Part and Directions for the Hearing of the Substantive application. The Directions to be sought will include directions for:
Exchange of Evidence.
Any Disclosure Sought.
Preparation of Bundles
Listing for the Hearing.
If Costs have not already been assessed, then the Non-Party should be served with the bill and given an opportunity to challenge it by Points of Dispute in the usual way Mainwaring and another v Goldtech Investments Ltd [1998] EWCA Civ 1653.
Costs of interim application usually follow the event so the successful party in an application for a Non-Party Costs may recover the costs of the application. However, the court has a wide discretion regarding costs and may make another Order pursuant to CPR r.44.2
COSTS
It is important to note that while a Non-Party cannot be ordered to pay above the amount the court has ordered the Claimant, interim-party orders and the cost of the application itself can be recoverred at the conclusion of the hearing.
What this means by way of an example:
The court ordered the Claimant to pay £100'000.
The succesful Defendant applied to join the Non-Party to the proceedings. This cost £300.
The court had a hearing and determined the Non-Party should be added to the proceedings. The legal costs for that hearing were say £1000 and the [now former] Non-Party pay these costs.
At the conclusion of the hearing the [now former] Non-Party has a liability of £101'300 being the total costs.
HOW WE CAN HELP
This office has extensive experience in successful contentious litigation with a proven track record of not just acquiring not just the Non-Party Costs Orders (the easy part) but also is in securing the asset through charing orders and finally, realising the asset.
We do not leave our clients with empty court orders but include enforcement as part of the standard retainer so your security is assured.
