CostsApplication for consent to scheme of reorganisation of life insurance business - policyholder opposing scheme on behalf of other policyholders - entitled to pre-emptive costs order In re Axa Equity & Law Life Assurance Society Plc: ChD (Evans-Lombe J): 1 November 2000The company sought the court's consent to a scheme of reorganisation of that group of companies' life insurance business pursuant to the Insurance Companies Act 1982.

M, a policyholder opposed to the scheme, was added to the proceedings as a representative defendant on behalf of himself and approximately 1,400 like-minded policyholders.

M applied for an order for costs in his favour in any event, on the basis that he was in a position analogous to that of a member of an occupational pension scheme seeking to call the trustees of the scheme to account on behalf of all the beneficiaries.Terence Etherton QC and Paul Newman (instructed by Ashley Holmes, solicitor, Consumers' Association) for M.

Martin Moore (instructed by Herbert Smith) for the company.

Robert Hildyard QC and Leon Kuschke (instructed by the Treasury Solicitor) for the Financial Services Authority.Held, granting the application, that the position of a representative objector on such an application was analogous to that of a minority shareholder bringing a derivative action on behalf of a company, since in both cases a person who had given consideration for a limited interest in a fund was alleging injury to the fund as a whole and seeking restitution on behalf of the fund; that what distinguished the shareholder or pension fund member from the ordinary trust beneficiary was that the former had given consideration for his or her interests and was not just the recipients of a settlor's bounty; that it was convenient for the company to be able to come to court and obtain a definitive ruling as to whether it was entitled to implement the proposed scheme, and a representative defendant provided a service to the company by ensuring that the scheme was properly tested in court and was joined to the process for the purposes of the company itself; that it was therefore entirely right that M's costs be met by the company as part of the process embarked upon by it in order to settle the issue of the validity of the scheme; but that M should not have carte blanche to advance any points he could think of at the expense of the company, and his entitlement to costs would be limited by the court.