On 10 November 2011, Mr Justice Eady ordered the Claimants' solicitors to disclose details of how disbursements were funded following their claims being dismissed, in order to establish whether the solicitor was a litigation funder "in the way of business". If they were, the Defendants might be entitled to apply for a third party costs order. The Claimants were without ATE insurance!
In a judgment handed down on 10 April 2013, Lord Justice Leveson dismissed the Claimants’ appeal against the above decision. In his judgment he indicated that the payment of disbursements by a solicitor, without anything more, does not incur any potential liability to an adverse costs order. However, the issue was whether to order disclosure of information to enable the insurers to consider whether to apply for a third party order for costs. In Mr Weddall’s case, he had submitted that the solicitors pressed on with the litigation without ATE insurance, contrary to his instructions. This, in itself, could demonstrate that the solicitors were controlling the litigation and could justify full disclosure. In any event discovery had since been provided and a costs application is underway. Given the unusual circumstances of Mr Flatman’s case, it was also ordered that disclosure should be provided.
We shall eagerly await any news on the outcome of any application for a third party costs order.
For full details of the case, visit the British and Irish Legal Information Institute's website.
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