UK: Liability for the Costs of Non-Parties

Last Updated: 30 May 2003
In Individual Homes Limited v Macbream Investments Limited (The Times, 14 November 2002) the court closed a potential loophole in the Civil Procedure Rules (CPR) and confirmed its jurisdiction and discretion to award costs in favour of a non-party when that non-party has been compelled by witness summons to provide evidence to assist a party.


The claimant, Individual Homes Limited, sought specific performance of an agreement for the sale and purchase of land. One of the issues in the case was whether the defendant, Macbream Investments Limited, was able to complete the transaction at the time it served a notice to complete on the claimant. The claimant alleged that the property was subject to a mortgage and that the mortgagee (Halifax Bank of Scotland plc (the Bank), which was not a party to the case) had not agreed to the sale and would not have agreed to discharge its mortgage to allow completion. To prove this, the claimant needed various documents held by the Bank.

The usual method for obtaining documents from a non-party post-CPR is to make an application under section 34 of the Supreme Court Act 1981 (SCA) and CPR 31.17 for non-party disclosure. If this procedure had been adopted, the Bank would have been able to recover the costs it incurred in complying, under CPR 48.1(2).

The claimant chose instead to proceed under Part 34 of the CPR, serving a witness summons on an employee of the Bank, requiring that employee to attend the trial and to produce certain of the Bank’s documents. Part 34 compensates a witness only for travel expenses and loss of time in attending at court. This meant that the Bank could not recover the legal costs it incurred in taking advice on the summons, or the costs it incurred in collating the documents requested by the claimant.

The Bank complied with the witness summons and prepared for its employee to produce the requested documents. The night before the Bank’s employee was due to attend court to give evidence, the claimant informed the Bank that he, and the documents, were no longer required. The claimant declined to reimburse the Bank for the wasted costs it had incurred.

Not surprisingly, the Bank applied to the court for an order that it be joined as a party to the proceedings for the purposes of costs, and that an order for costs be made in its favour.


Deputy High Court Judge Alan Steinfeld QC cited with approval a suggestion in the Supreme Court Practice, Volume 1, that the claimant’s election to issue a witness summons was "these days an inappropriate method". He found that as the claimant had served the witness summons in order to obtain documents which were in the possession, custody or power of the Bank, and not of the employee, then strictly speaking the issue of that witness summons was an "ineffective exercise". As a "mere employee of the Bank, albeit in a relatively senior position, he did not personally have possession, custody or power of or over any of the documents" sought. The Deputy Judge found that the Bank "took a responsible attitude" and did not take any technical point, proceeded to comply with the witness summons as though it was equivalent to an order under section 34 of the SCA and sought its costs of complying from the claimant.

The Deputy Judge stated that the fact there is no provision in the CPR for costs of complying with the witness summons "may well be a gap in the Rules that perhaps the Rules Committee might wish to look at". It may not be envisaged by the Rules that a witness summons directed at an individual would normally require any significant trouble or expense in collating or bringing documents to court as it would normally be used for personal documentation. He said that the ordinary method of obtaining production of documents from an organisation such as the Bank was under section 34 of the SCA.

In any event, he noted that the court has jurisdiction to make an order in favour of a non-party under its general discretion in relation to costs pursuant to section 51 of the SCA (as supplemented by CPR 48.2), and made an order joining the Bank to the action for the purpose of making a costs order in its favour.

The guidelines for costs set out by Balcombe LJ in Symphony Group plc v Hodgson [1994] QB 179 were not applicable in this case because they applied only to an order for costs made against non-parties. The only relevant authority was a statement by Lord Goff in the House of Lords decision in Aiden Shipping Company Limited v Interbulk Limited [1986] AC 965 observing that "Courts of first instance are I believe well capable of exercising their discretion under the statute in accordance with reason and justice".

In the present case, an order in favour of the Bank was the only order which would accord with reason and justice as the clear object of the claimant’s action was to obtain production of documents. If the proper procedure had been followed, the Bank would have been entitled to recover its costs; to deprive the Bank of these costs would be "monstrously unjust". It would also be "bizarre" if the claimant could avoid liability for costs by virtue of having followed the wrong procedure.


This case shows that non-parties compelled to assist in document production for litigation can expect to receive reimbursement of their costs – regardless of the procedure adopted to obtain the documents.

Article by Christa Band

© Herbert Smith 2003

The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances.

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