Case Alert - [2016] EWHC 2460 (Comm)

Security for costs and identifying a third party funder

Hausfeld for claimant, Dentons for defendant

CPR r25.14 permits the court to make a security for costs order against someone other than the claimant. In Dawnus Sierra Leone v Timis Mining, the judge accepted that the court had the power to order a claimant to disclose the identity of a third party funder funding its litigation (although he declined to make the order in that case because there was no evidence that CPR r 25.14(2)(b) had been satisfied, ie that the third party has contributed or agreed to contribute to the claimant’s costs in return for a share of any money or property which the claimant may recover in the proceedings)

The same issue came up again in this case (which did not refer to Timis Mining, perhaps because it had only recently been handed down). The judge agreed that the court had power to order disclosure of the identity of the funder, where there is good reason to believe that the claimant has funding falling within CPR r25.14(2)(b): "Where the defendant does not know that identity, but the claimant does, ordering the claimant to reveal it to the defendant is doing no more than making an order that is necessary to make effective the primary power (to grant a security for costs remedy under CPR 25.14)". The claimant was ordered to provide the name and address of the funder within 7 days (although he did not decide whether that should be by witness statement or a solicitors' letter).

COMMENT: Although these two recent decisions confirm that the identity of a funder can be ordered, it is worth bearing in mind that Reeves v Sprechter [2007] confirmed that the court has no power to order disclosure of the funding agreement itself.