CONDITIONAL FEE AGREEMENT, CFA, LITIGATION FUNDING, CIVIL LITIGATION, COMMERICIAL LITIGATION
COMMERCIAL LITIGATION FUNDING, Third party funding, 3rd party funding, NO WIN NO FEE
BAKULA JOBANPUTRA and PARI JOBAN v JAYANT MODI and JOHN MCLEE ROBINSON 
In this case the Court of Appeal considered whether the High Court Master was correct in his decision not to make a non-party costs order against the respondent solicitor. The Court of Appeal held that the Master was entitled to come to the decision he did.
The High Court Proceedings
- The High Court proceedings centred around the validity of two wills. The question was whether a will in 2003 was valid. In order for the will to be valid, it must have been signed by the testator/testatrix in the presence of two witnesses.
- The 2003 will purportedly bore the signature of the testatrix as well as a Ms Rayner, a legal secretary, and Mr Robinson, a solicitor. Ms Rayner gave evidence that the signature on the 2003 will was not hers. Mr Robinson had provided a letter confirming that the signature on the 2003 will was his, although he said he did not have a clear recollection of the matter. Subsequently Mr Robinson said that he could not be 100% certain that the signature was his and then suggested that he had been tricked into signing a document. Mr Robinson had been subject to disciplinary proceedings before the Solicitors Disciplinary Tribunal (the “SDT”) in relation to this matter.
- The Master considered that the evidence from Ms Rayner was sufficient to establish that the 2003 will was invalid and, therefore, there was no need to examine the position of the solicitor Mr Robinson. The Master entered summary judgment for the Claimant against the Defendant, who had sought to uphold the 2003 will.
- The Claimant then made an application against Mr Robinson for a non-party costs order pursuant to section 51 of the Senior Courts Act 1981 (the “Act”). Under section 51(3) of the Act, the Court has the power to determine by whom and to what extent the costs of and incidental to proceedings are to be paid.
- The Master refused the Claimant’s application on four grounds, namely: (i) that a non-party costs order is usually sought after a full trial; in this case the validity of the 2003 will was decided summarily and without investigation of the conduct of Mr Robinson; (ii) the Claimant’s allegations against Mr Robinson were not clear; (iii) if Mr Robinson were joined to the proceedings, his conduct and causative effect of his conduct would have to be litigated, which might involve a trial lasting several days; and (iv) it was not appropriate to join Mr Robinson to the proceedings.
- The Master granted permission to appeal and the Claimant appealed the decision of the Master to the Court of Appeal.
THE CLAIMANT’S APPEAL
The Claimant’s grounds of appeal were (in summary): (i) that the Master was mistaken in thinking that there would be an investigation into Mr Robinson’s conduct, the findings of the SDT could be relied upon; (ii) the causative effect of Mr Robinson’s conduct was clear; and (iii) unless a non-party costs order is made, the Claimant would have little prospect of recovering her costs.
In response, Mr Robinson’s position was that the Master’s decision should be upheld; he did not control or fund the litigation, he did not gain any financial benefit from it and he gave no evidence in the proceedings. Should the Claimant wish to pursue him, she could do so under a separate cause of action.
Throughout the course of the appeal the Claimant invited the Court to agree that it was correct to order a non-party costs order against a solicitor in circumstances where he certifies a document as authentic, knowing that it was wrongly certified and where he knows that there will be litigation in which that document will be material.
FINDINGS OF THE COURT OF APPEAL
- The Court of Appeal dismissed the Claimant’s appeal. The reasons of Lewison LJ can be summarised as follows:
- Non-party costs orders are typically made where one non-party finances or manages the litigation, or where he is party to closely related litigation or part of group litigation. He did not know of an occasion where a non-party costs order had been made against someone who merely provided misleading information prior to the commencement of litigation.
- To create a new category of persons who could be at risk of a non-party costs order being made against them would go far beyond what the Courts have done to date.
- The High Court Master was correct in his approach to the Claimant’s application. The allegations against Mr Robinson would need to be formulated more precisely, and if Mr Robinson were joined to the proceedings, this would involve a trial which might last several days.
- The Claimant had not demonstrated that Mr Robinson’s conduct had caused the expenditure of the Claimant’s costs as the apparent forgery of Ms Rayner’s signature invalidated the 2003 will and that had been why the Master entered summary judgment in the first place.
Whilst the Court has a discretion to take into account a number of factors, non-party costs orders are usually made against those who have an interest in the litigation and/or that person manages or funds the litigation. This was not the case in this litigation and, had the Claimant’s appeal been successful, this would have widened considerably the circumstances in which non-party costs orders are made, thereby running the risk of a flood of applications being made against third parties. The Court of Appeal’s approach emphasises that non-party costs orders may only be made in limited circumstances.