Can I recover my costs in any litigation brought against other directors/shareholders in my company?
The facts of any claim are essential to answer this accurately. Costs are always ordered at the discretion of the court. Typically, in commercial litigation and shareholder disputes that we are instructed in, the court will order the losing party to pay the winner’s costs as well as their own. There are, however, no guarantees. A party seeking to recover their costs must have acted reasonably, have only incurred costs proportionate to the issues in dispute, and should have acted in accordance with the overriding objective.
In any dispute, but especially in litigation involving companies and/or shareholders, which can be technically complex and expensive, it is imperative to consider cost-benefit at the outset. We take this approach as a matter of course and seek to position you to put the opposing party under maximum pressure. In this way, we aim to improve your prospects of forcing settlement (on the one hand) and (on the other hand) of recovering as much of your legal costs as possible if litigation is unavoidable.
In shareholder disputes, one party can often fear the other shareholder using company resources to pay their own costs. There is well-established case law that such conduct amounts to unfair prejudice. Put simply — it is not permitted or permissible.