Jurisdiction(s):
United Kingdom

Key definition

Costs definition

What does Costs mean? In litigation, costs are the legal fees, disbursements, court fees and VAT incurred in bringing, defending or appealing a claim, and the sums a court or tribunal may order one party to pay another for those liabilities. The concept is governed by procedural rules and case law rather than a single statutory definition: England and Wales (CPR 44–47), Northern Ireland (RCJ Ord 62), Scotland (where the equivalent term is expenses), and Ireland (Legal Services Regulation Act 2015 and the Legal Costs Adjudicators). The general approach is broadly consistent, subject to local terminology and procedure. Typical features include the discretionary rule...

Non-party costs orders against directors and shareholders: principles, evidence and case law on control, funding, personal benefit, impropriety, warnings and insolvency (England and Wales)

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Practice notes

This Practice Note considers non-party costs orders (NPCOs) against company directors—the same principles also apply to controlling shareholders.

It outlines the criteria that must be satisfied before the court will exercise its discretion to impose an NPCO on a director, and highlights significant case law. It also addresses piercing the corporate veil and supplies illustrative decisions. The Note proceeds on the basis that the reader understands the general principles of NPCOs; for guidance, see Practice Note: Non-party costs orders—guidelines. Numerous leading cases warn against over-citation of authorities on NPCO applications, because the judge’s role is one of broad discretion. Nevertheless, that discretion must be applied in line with guidance developed through the case law, which is especially pertinent to matters concerning applications for NPCOs against directors and shareholders of small and/or insolvent companies. The same approach extends to controlling shareholders. Examples illustrate how courts have applied these principles in practice. It is therefore unnecessary to marshal long lists of cases, provided the essential guidance is observed...

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Web page updated on 21/05/2026

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