Costs News

08 August 2019
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High Court refuses to make third-party funder disclosure order

The High Court has rejected a successful claimant’s application for disclosure of third-party funders sitting behind the defendants, finding no justification for such an order.

In Rudd v Bridle and Anor [2019] EWHC 1986 (QB), a data protection claim, Mr Justice Warby ordered the first defendant, John Brindle, to provide certain further information, but dismissed the remainder of the claim against him, and the whole of the claim against the second defendant, J&S Brindle Ltd.

He ordered that the claimant should pay the company's costs, on the standard basis. But he ordered Mr Bridle to indemnify the claimant against that liability; to pay all the claimant's costs of his claim against the company, to be assessed on the indemnity basis; and to pay half the claimant's costs of the claim against him.

The claimant’s solicitors served a bill of £264,000 for his costs of the claim against the company and half the costs of its claim against Mr Bridle. The company's last approved costs budget for the whole proceedings was £106,000. At around the same time, Mr and Mrs Bridle put their home on the market for £910,000.

The claimant sought the identity of the defendants’ third-party backers, arguing that they must have had a funder because the evidence showed they “simply never had the available assets or funds to pay for their own costs let alone pay any costs liability to the claimant”.

However, Warby J did not accept this, noting the “rather obvious point” that neither the defendants nor anybody funding them could have had “any expectation of financial gain” from the litigation.

He found the defence was funded by a before-the-event legal expenses policy, the company (before it became a party to the case), and J&S Bridle Associates, a partnership comprising Mr Bridle and his wife – the latter two representing “in substance” Mr Bridle’s money and the resources of which the judge said were already exhausted.

The court “will not be keen to allow its own scarce resources and those of the parties to be consumed in pursuit of remedies that could not be real and effective” – Mr and Mrs Bridle would not have put their home on sale if they had other resources available with which to meet their costs liability, Warby J reasoned.

He concluded that there was no “practical need” for an order: “The purpose of a third-party costs order is, in all ordinary cases, to ensure that the receiving party is compensated for the costs which the court has ordered should be paid.

“If those costs are going to be paid directly by the paying party in any event, the process of obtaining disclosure, considering whether to seek a third-party order, and applying for such an order is pointless. It is not apparent to me that there is any real risk of non-payment by Mr Bridle.”

The judge said it was important to distinguish between having the means to pay – which the house provided – and having ready cash or credit, which Mr Bridle did not have.

Warby J also expressed concern about the claimant’s bill, saying he “very much” doubted that “costs on anything like this scale will be recovered in the end”.

Also, given that the company’s defence of the claim was successful, the application for disclosure could only be on the basis that it was in possession of information that could help the claimant identify and obtain a costs order against some other third-party.

“For these purposes, the company would seem to be a mere witness, rather than a party which has facilitated any wrongdoing.

“I have not been shown any authority that supports the view that a third-party disclosure order is appropriate in circumstances such as these. In any event, I would not grant one as a matter of discretion.”

Guy Vassall-Adams QC and Tim James-Matthews (instructed by Leigh Day) for the claimant, James Fairbairn (of Dentons) for the defendants.

 

 

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