Tinseltime Ltd v Roberts & Ors

A solicitor acting under a conditional fee agreement does not become a non-party litigation funder merely because the client is impecunious, lacks after-the-event insurance, and the solicitor funds disbursements. The solicitor must have acted beyond the ordinary role of conducting litigation for the client. Relevant additional factors may include a financial benefit beyond the CFA or control of the litigation for the solicitor’s own purposes. Complaints that the solicitor acted improperly, unreasonably or negligently in that role ordinarily belong to the wasted-costs jurisdiction. The court must decide whether a costs order is just on the facts.

The defendants applied for costs against the claimant’s solicitor, Mr Edmondson. They sought a non-party costs order under section 51 of the Senior Courts Act 1981 and CPR 48.2, alleging that he had funded and controlled litigation brought by an impecunious claimant without after-the-event insurance. They also sought a wasted-costs order under section 51 and CPR 48.7.

The underlying claim concerned alleged dust damage to machinery and business losses. It had substantially failed at a preliminary issue hearing, after which the claimant became insolvent and the proceedings were struck out. The court had to decide whether the solicitor’s CFA, funding of disbursements, knowledge of the claimant’s impecuniosity and conduct of the case justified a non-party costs order, and whether the wasted-costs application should proceed.

1. Non-party costs order dismissed. The jurisdiction is fact-specific. The ultimate question is whether, in all the circumstances, it is just to make the order. A solicitor must have acted beyond or outside the ordinary role of conducting litigation for the client.
2. A solicitor’s financial interest in recovering profit costs and a success fee under a CFA does not, without more, take him outside that role. The same applies where the solicitor agrees under the CFA to fund disbursements. The position is unchanged because the client is impecunious and has no ATE insurance. Those arrangements further the public policy of access to justice and are legally permissible.
3. Something additional is required. This may include a financial benefit beyond the CFA, control of the litigation beyond that ordinarily expected of a solicitor, or both. The economic reality and the solicitor’s true role must be examined. A case pursued primarily for the solicitor’s own benefit may justify an order.
4. The court should ordinarily keep non-party costs and wasted costs applications distinct. Allegations that a solicitor acted improperly, unreasonably or negligently in conducting the litigation generally fall within wasted costs, not the non-party funding jurisdiction.
5. On the evidence, Mr Edmondson had acted as a solicitor under a CFA and had funded disbursements because he had underestimated the complexity and cost of the case. The claimant’s director made the important litigation decisions. There was no sufficient evidence of additional financial benefit, control, self-interest or improper conduct. The application was therefore dismissed.
6. The wasted-costs application was refused permission to proceed. The alleged conduct was not shown to be improper, unreasonable or negligent, and the necessary causal link between that conduct and the costs claimed could not be established. Proceeding would also be disproportionate.

Not an appeal. The judgment determined the defendants’ applications against the claimant’s solicitor in the High Court.