The decision in Maranello Rosso Ltd v Lohomij BV & Ors [2025] EWHC 1112 (Ch) reinforces the principle that non-parties who fund litigation for their own financial benefit may be treated as "real parties" and ordered to pay costs if the claim fails.
Background
The claimant, Maranello Rosso Limited (MRL), brought a claim against multiple defendants alleging conspiracy and unlawful means in connection with a failed scheme to purchase and auction vintage cars. The claim was dismissed at first instance and on appeal, with MRL ordered to pay the defendants’ costs. However, MRL was unable to meet these costs, leading the defendants to seek a non-party costs order against Hamish Vans Agnew, who had provided funding to MRL.
The court examined two key agreements:
- A "vehicle sale agreement" under which Vans Agnew paid £566,000 for an Alfa Romeo, with MRL retaining a buyback option.
- A litigation funding agreement entitling Vans Agnew to 10% of any damages recovered, plus a Ferrari if the claim succeeded.
Legal Principles
HHJ Paul Matthews applied established principles from Dymocks Franchise Systems v Todd [2004] 1 WLR 2807 and Excalibur Ventures v Texas Keystone [2017] 1 WLR 2221, emphasising that:
- A non-party who funds litigation for their own financial benefit, rather than as a "pure funder" facilitating access to justice, may be liable for costs.
- The "Arkin cap" (limiting liability to the amount funded) does not apply where the funder has a substantial interest in the outcome.
- Where a funder is a "real party" to the litigation, justice may require them to bear the costs of the successful opponent.
Findings
- Commercial Funder, Not Pure Funder: The court rejected Vans Agnew’s argument that he was merely a lender or car purchaser. Instead, it found that the transaction was a disguised funding arrangement, with the Alfa Romeo acting as security. His 10% success fee and potential Ferrari reward demonstrated a substantial financial interest beyond mere reimbursement.
- Causation of Costs: The funding provided in September 2020 enabled the litigation to proceed, meaning Vans Agnew was responsible for costs incurred up to May 2021 (when another funder contributed). He was also liable for one-third of subsequent costs, as his earlier funding maintained the claim’s momentum.
- Indemnity Basis Justified: The court held that indemnity costs were appropriate because: The litigation had been conducted unreasonably (costs had already been awarded on an indemnity basis against MRL). Vans Agnew’s attempt to disguise funding as a car sale was a "childish and ineffectual" deception, warranting censure.
Order
Vans Agnew was ordered to pay the defendants’ costs up to May 2021 in full, plus one-third of subsequent costs, all on the indemnity basis.
