Wall v The Royal Bank of Scotland Plc

Where there is good reason to believe that litigation is funded by a third party within CPR 25.14(2)(b), the court has ancillary power to order the claimant to identify that funder. The power is necessary to make the court’s primary power to order security for costs effective. The order is appropriate where the defendant has a serious, properly arguable security application which cannot otherwise be brought. Article 8 does not prevent the order. The disclosure required must be limited to what is necessary to protect the defendant’s procedural right to pursue security for costs.

Mr Wall pursued substantial claims against RBS as assignee of, or beneficiary of a trust concerning, claims formerly held by Opal Property Group Ltd. RBS believed that the litigation was being funded by a third party in return for a share of any recovery. It applied for an order requiring Mr Wall to identify the funder or funders and to confirm whether CPR 25.14(2)(b) applied.

Mr Wall relied on after-the-event insurance and argued that the court lacked power to require disclosure. He also relied on Article 8 of the Convention. The issue was whether the court could order identification of an unknown funder as a preliminary step to a possible security for costs application.

1. The application succeeded. Mr Wall was ordered, within seven days, to provide the name and address of any person who had contributed or agreed to contribute to his costs in return for a share of money or property recovered in the proceedings. Costs and the precise form of the order were reserved for further argument.
2. CPR 25.14 gives the court power to order security for costs against qualifying third-party funders. That power necessarily includes the ancillary power to require the claimant to identify the funder where the defendant cannot otherwise make the application. The principle is that where a court has power to grant a remedy, it has power to make ancillary orders necessary to make that remedy effective.
3. Reeves v Sprecher et al. [2007] EWHC 3226 (Ch) was correctly decided in holding that the court could order disclosure of the funder’s identity and address, and whether the funding fell within CPR 25.14(2). Disclosure of the funding agreement itself was a different question and was not necessary at this stage.
4. Abraham et al. v Thompson et al. [1997] 4 AER 362 did not prevent the order. That decision concerned the former absence of any power to order advance security against third-party funders. CPR 25.14 changed the position by providing a remedy which could be sought before a costs liability was established.
5. Article 8 did not bar the order. The order was either outside the scope of private life or, alternatively, was a lawful and necessary interference protecting RBS’s procedural right to pursue a security application. The interference was confined to information necessary for that purpose.
6. The evidence gave RBS a serious basis for believing that Mr Wall was funded within CPR 25.14(2)(b), that the funder was likely to have a financial stake, and that a security application had a real prospect of success. RBS would suffer material prejudice if it could not identify the proper respondent; no comparable prejudice to Mr Wall was established.