Hamilton -v- Al Fayed (No.2) [2003] 3 All ER 641 (QBD)


Pure funders cannot benefit from litigation. If a third party provides funding in a case and has a financial interest in the proceedings or may derive some benefit from them they may be liable to pay the costs if they lose.


Arkin v Borchard Lines Court of Appeal (Civil) 26th May 2005


Conditional Fee Agreements and claims brought by impecunious Claimants. Reference to Hamilton -v- Al Fayed (No.2) [2003] 3 All ER 641, R (Factortame Ltd) -v- Transport Secretary (No. 8), British Cash and Parcel Conveyors Ltd -v- Lanson Store Services Co Ltd [1908], Awwad -v- Geraghty & Co [2001] and Bevan Ashford -v- Geoff Yeandle (Contractors) Ltd [1999].


Professional funders and contingent fees: the circumstances in which an order for costs should be made against a non-party funder that takes a share in the proceeds if a claim is successful.


Here a Claimant was not eligible for Legal Aid and was advised by the professional funder that the claim could not proceed if funding was not provided for disbursements. He was also told that it was not possible to obtain ATE (After The Event) Insurance because of the complex nature of the case. The Claimant could not afford to pay the insurance premium himself. The relationship between the professional funder and the Claimant, even though the funder could obtain profit as a result of the litigation, was not against public policy. The funder had not taken a direct role in the conduct of the litigation and did not place influence on the outcome of the proceedings except in its reliance on Counsel’s advice.


CIBC Mellon Trust & Another v Stolzenberg & Ors, Court of Appeal (Civil Division) 24th May 2005


Whether a costs order should be made against a shareholder of a company who was not a director but had a financial interest in the company to the degree that he funded the litigation to his own interests.




Costs Monkey