When is a Settlement not a Settlement?

In the recent matter of Dufoo v Tolaini and others, the Court of Appeal (CoA) has found that a settlement reached by two of the three Applicants in a claim was not a valid basis for holding that they should not be made to contribute to the costs of the third Applicant who continued the proceedings and ultimately lost.

The background to the matter is that, following a fall-out between the three Applicants shortly before trial, two of the Applicants entered into a “no costs” settlement with the Respondent. Upon losing at final trial, the continuing Applicant was ordered to pay 80% of the Respondent’s costs, with no contribution to be made by the other two Applicants.

The continuing Applicant appealed on two grounds, the second of which was that the Judge should have ordered that the other two Applicants should be made to contribute towards his costs liability to the successful Respondent.

Jackson LJ upheld the Appeal and decided that the trial Judge should have made an order requiring the two Applicants who had settled to make a contribution towards the costs for the period when all three Applicants were advancing the same (unsuccessful) case against the Respondent. The case was remitted to the trial Judge for a final assessment of the appropriate contribution.

Dufoo v Tolaini and others [2014] EWCA Civ 1536 (27 November 2014).

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