Rudd v Bridle & Anor

The power to order disclosure of litigation funding information is ancillary to the court’s jurisdiction to make costs orders against non-parties. It is discretionary and must be exercised justly, having regard to whether a non-party has a financial interest, controls the litigation, has acted improperly, or has caused the relevant costs or impaired recovery. Disclosure is not automatic merely because a costs order exists or because the receiving party seeks information about the paying party’s assets. Where the established funding is legitimate pure funding, there is no realistic prospect of a non-party costs order, or the proposed order would serve no practical purpose, disclosure should be refused. A document is “mentioned” for CPR 31.14 purposes only where the statement specifically mentions or directly alludes to the document itself, rather than merely referring to a transaction from which its existence may be inferred.

The claimant had obtained judgment in a data protection claim. The first defendant was ordered to indemnify the claimant against the second defendant company’s costs, to pay certain costs, and to make an interim payment on account. The claimant then sought disclosure identifying persons or entities who had funded the defendants’ litigation, together with related documents. He also sought inspection of three documents said to be mentioned in a witness statement concerning a proposed property sale, a short-term loan and communications from a buyer’s solicitor.

The central issues were whether the funding evidence justified disclosure ancillary to a possible non-party costs order, and whether the three matters in the witness statement amounted to documents “mentioned” under CPR 31.14.

1. Funding disclosure application dismissed. The court had power under section 51(3) of the Senior Courts Act 1981 to make costs orders against non-parties and an ancillary discretionary power to require identification of litigation funders. The applicant bore the burden of establishing a proper basis for disclosure.
2. The jurisdiction is exceptional in the sense that non-party costs orders are not usually made. Relevant considerations include whether the non-party substantially funded and controlled the proceedings, benefited from them, was the real party, acted improperly, or caused the relevant costs or impaired recovery. The authorities provide considerations rather than a rulebook; the overriding requirement is that the discretion be exercised justly.
3. The evidence established funding by insurers, the defendant company and a partnership connected with the first defendant. That funding was legitimate, involved no demonstrated impropriety or control, and fell within the principle that pure funders supporting a party without a financial interest in the litigation are not ordinarily liable for costs. The circumstances were materially different from Automotive Latch Systems Ltd v Honeywell International Inc, where substantial funding and a vested interest were apparent.
4. There was no sufficient evidence of undisclosed funding, no real risk that the first defendant would fail to meet the claimant’s properly assessed costs, and no practical prospect of an effective order against the company or partnership. Disclosure would therefore waste resources and would be contrary to the overriding objective. The company’s position was stronger because it was itself a costs creditor and was, at most, a witness possessing information about another possible funder.
5. Witness statement application dismissed. Under CPR 31.14(1)(b) and CPR 31.15, “mentioned” requires a specific mention or direct allusion to the document itself. A reference to a short-term loan referred to a transaction, not necessarily to a document. References to a possible sale and to information from a buyer’s solicitor likewise permitted, at most, an inference that documents might exist. They did not directly allude to documents.
6. In any event, inspection would not be ordered where the original charging-order issue had ended and the documents were sought for collateral investigation of the judgment debtor’s resources or possible funders. Both applications were dismissed.