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Cite as: [2016] 5 Costs LR 943, [2016] WLR(D) 581, [2016] EWHC 2460 (Comm), [2017] 4 WLR 2

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Neutral Citation Number: [2016] EWHC 2460 (Comm)
Case No: CL-2013-000310 / CL-2015-000778

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL
7 October 2016

B e f o r e :

MR ANDREW BAKER QC SITTING AS A HIGH COURT JUDGE
____________________

Between:
STUART BARRIE WALL
Claimant
- and -

THE ROYAL BANK OF SCOTLAND PLC
Defendant

____________________

Stephen Davies QC and Neil Levy (instructed by Hausfeld & Co LLP) for the Claimant
Andrew Mitchell QC and Tamara Oppenheimer (instructed by Dentons UKMEA LLP) for the Defendant

Hearing dates: 16, 19 September 2016

____________________

HTML VERSION OF JUDGMENT APPROVED
____________________

Crown Copyright ©

    Mr Andrew Baker QC : Introduction

  1. The Claimant, Mr Wall, makes claims in these actions against the Defendant ("RBS") in relation to RBS's former dealings with the Opal Property Group. Mr Wall owned and controlled the parent company of the Group, Opal Property Group Ltd ("OPG"). OPG is in insolvent liquidation. Mr Wall now sues as, so he claims, assignee of OPG's rights (if any) against RBS and/or beneficiary of a trust in respect thereof declared by OPG's liquidators.
  2. It is not necessary to rehearse OPG's substantive complaints, as pursued by Mr Wall, in any detail, or to explain why two actions were commenced, now consolidated and set for trial in Michaelmas Term 2017. Suffice it to say that the claims are apparently said to be worth 700 million, if well founded, and that they involve allegations of mis-selling by RBS, of an interest rate swap containing a mandatory early termination clause, breach of that clause, what has been described as the "artificial distressing of OPG" by RBS's Global Restructuring Group, and LIBOR manipulation.
  3. This judgment deals with RBS's application, by Application Notice dated 8 December 2015, for an order that Mr Wall (a) provide the name and address of any third party or third parties who are funding the litigation on his side and (b) confirm whether any such third party funder falls within CPR 25.14(2)(b), i.e. whether such funder "has contributed or agreed to contribute to [Mr Wall's] costs in return for a share of any money or property which [Mr Wall] may recover in the proceedings".
  4. In short, RBS believes that this litigation is being funded on Mr Wall's side by a third party funder or third party funders taking a stake in the claim or its possible fruits in return for the funding. CPR 25.14 empowers the court to order such funders to provide security for costs to defendants. RBS says it cannot sensibly make an application under that rule without knowing against whom to make it. Hence the present application.
  5. Procedural History

  6. RBS issued its Application Notice on 8 December 2015 with a view to having this application dealt with at the first Case Management Conference, which came before Phillips J. on 14 December 2015. It was contended for Mr Wall that since his possible liability to RBS for costs was insured by after-the-event ("ATE") insurance cover, there would be no question of any order for security under CPR25.14 and therefore no question of requiring provision of the information sought at this first stage (if the court otherwise had power to require it). Given that response, it is no surprise that Phillips J. adjourned the application to give Mr Wall an opportunity to give disclosure as to his ATE insurance position and RBS an opportunity to consider that disclosure. That is unsurprising even though it was indicated for RBS that its position would be that Mr Wall's ATE insurance was irrelevant at this first stage of identifying any funder(s).
  7. The order at the first CMC provided for a second CMC, which came before me on 1 July 2016. On 28 June 2016, RBS gave notice that it would seek to have this application dealt with at the second CMC. RBS had made it clear in correspondence, but only in early May 2016, that the ATE insurance arrangements as disclosed by Mr Wall in December 2015 did not deflect RBS from its desire to seek security for costs under CPR 25.14. This first stage application therefore remained live. But RBS had done nothing for over a month about re-listing the application; although, strictly, Mr Wall was long out of time for serving any evidence in response to it, it seemed plain to me that in fairness he should have an opportunity to do so; and there was not time in any event at the second CMC to give proper consideration to the application. I therefore adjourned it further and gave procedural directions under which the application finally came back for full argument on 16 and 19 September 2016, as it happens before me again.
  8. In principle, as regards dealing with an application of this sort, I have no doubt that 'the sooner the better' should be the rule. In this particular case, though, Mr Wall's ATE insurance position has been evolving throughout, there has been delay on both sides, and in any event no point on delay is taken by Mr Wall. That may be because the hearing, at least as it appeared to me, was being used as something of a test case for whether third party funders can remain anonymous (to defendants and the court). Whether that is right or not, I shall deal with the application on its merits notwithstanding the delay. Trial is still over a year away. There should be plenty of time for RBS's proposed security for costs application to be made, if it first succeeds at this stage and such an application follows, and, as I say, no point is taken about delay. This should not, however, be thought to set a precedent as to when, generally, an application such as this should be made. I have no doubt that any such application should ordinarily be made, or at the very least intimated, at a first CMC (there may indeed be cases where it could properly be made even sooner), and dealt with, if not at that CMC, then as soon as the court can accommodate it thereafter, and not only some nine months later.
  9. RBS's Position

  10. Mr Mitchell QC, in focused and attractive submissions, contended that at this first stage (the second stage being the determination of a security for costs application, if made in due course), the matter was quite straightforward:-
  11. i) The power under CPR 25.14 to order a third party funder standing behind a claimant to secure the defendant's costs must carry with it the power to order the claimant to identify the funder.

    ii) There is: (a) good reason to suppose that a third party funder or third party funders taking a stake in the claim does or do stand behind Mr Wall in this case; (b) a serious basis for thinking that the court may in this case require that funder or those funders to provide RBS with security for costs pursuant to CPR 25.14; (c) prejudice to RBS, therefore, if Mr Wall is not required to identify his funder(s), since without that information RBS cannot sensibly make its (properly arguable) application under CPR 25.14; (d) no prejudice to Mr Wall if he is required to provide the information sought at this first stage.

    iii) Article 8 of the European Convention on Human Rights ("the Convention") does not stand in the way.

  12. In relation to the lack of prejudice to Mr Wall, Mr Mitchell's submission was a factual submission on the evidence, or rather the lack of it, in the case. It is said on behalf of Mr Wall that to require him to provide the information sought at this stage would be an impermissible infringement of his right to respect for his private life under Article 8 of the Convention. If that be right, Mr Mitchell accepted that I could not, in any event should not, grant RBS's application. That said and without diminishing the importance of the Article 8 argument there is no evidence that the order sought, if made, or compliance with it, would in fact cause Mr Wall harm, upset, inconvenience, embarrassment or difficulty, whether in connection with the litigation or otherwise. I can and do draw the inference that it will be, in fact, no skin off Mr Wall's nose at all if I make the order sought and he (but in practice I imagine his solicitors on his behalf) complies with it. In reality, a stand has been taken on whether I have power to make the order at all and on Article 8 (both as an aspect of whether I have that power and as a reason why I should not exercise it if I do). As I understood him, Mr Davies QC for Mr Wall in substance accepted that that was the position. He did also submit, in effect, that it was so clear that no order for security for costs would be made in this case, because of Mr Wall's ATE insurance arrangements, that I should not be troubled by RBS's inability to pursue an application under CPR 25.14.
  13. Discussion

  14. In my judgment, the matter is indeed straightforward, as contended on behalf of RBS. Mr Davies' submissions were cleverly developed and nicely argued, but they did not persuade me that there is anything difficult about the existence of the power I am asked to exercise, or as to Article 8, or as to whether, in my discretion, I should grant the relief sought at this first stage. I set out my reasons below, but the conclusion is that RBS's present application succeeds and, subject to discussion as to the precise wording, I shall make the order sought.
  15. Power Ancillary to CPR 25.14

  16. The CPR are subordinate legislation. As such, by section 3 of the Human Rights Act 1998, they must be read and given effect in a way that is compatible with the fundamental rights and freedoms provided by the Convention, in this case most pertinently Article 8 of the Convention, since that is invoked on behalf of Mr Wall. It is convenient nonetheless to consider first whether, apart from the impact of the Convention (if any), the conclusion would be that there is power, inherent in CPR 25.14, to order a claimant to identify his third party funder(s).
  17. The point arose before Sir Donald Rattee, sitting as a High Court judge, in Reeves v Sprecher et al. [2007] EWHC 3226 (Ch). Mr Davies submits that his consideration of the point is obiter, since by the time he gave judgment, the claimant had conceded that it was implicit within CPR 25.14 that the court must have power to order a claimant to identify his third party litigation funder to enable the defendant to apply for security for costs against that funder (see [16]-[17]). The claimant had also (a) admitted that there was a third party funder, (b) admitted that the funding fell within CPR 25.14(2)(b), and (c) agreed to provide the identity and address of the funder to the defendants' solicitors (only). The defendants sought in addition the disclosure at that stage of the funding agreement itself (assuming it to be in writing), but that was refused on the basis that it was not necessary to enable the defendants to mount a security for costs application under CPR 25.14 and therefore, in fairness to the funder, a decision as to whether it should be disclosed should be made within that application, if and when subsequently issued against the funder.
  18. As to identifying the funder, however, the learned judge also made an order going beyond the claimant's admissions and offer. They only extended to providing the funder's details to the defendants' solicitors but the learned judge ruled against the claimant as to that (see [29]-[31]). It is not clear to me that it is right, then, to characterise as obiter the judge's prior conclusion that he had power to order the provision of the identity and address of the funder. That prior conclusion was necessary to the ruling against the claimant and was founded upon his Lordship's own judgment on the point, not on any concession, and that seems to me to be the proper way to proceed on a point as to whether the court has power to make an order that is sought. But whether correctly characterised as obiter or not, I am not bound by the decision, Mr Davies submits squarely that it is wrong, even without regard to Article 8, and in any event Article 8 does not seem to have been raised.
  19. As it is, however, with respect, I agree entirely with the learned judge's conclusion and reasons in Reeves (for the moment leaving aside Article 8, which he was not asked to consider), subject to one point, where there may perhaps be room for criticising the language of the judgment but which I do not think undermines the decision.
  20. In Reeves, the defendants' argument is summarised at [13]-[16] as follows:
  21. "[13] The defendants' counsel accepts quite rightly that there is no express power anywhere in the Civil Procedure Rules or elsewhere to empower the Court to make such orders, but counsel submitted that the power to make such orders is a power which is necessary for the Court to have in order for it to be able to consider an application for the exercise of its express jurisdiction under CPR part 25.14. For, if the defendants do not know the identity of the admitted third party and do not know his or its address, and do not know whether that third party has entered into an agreement to contribute to the claimant's costs in return for a share of the proceeds of the litigation, then clearly the defendants are in no position to make an application under CPR 25.14.

    [14] Counsel for the defendants relied on a dictum of Morison J in Raiffeisen Zentralbank Osterreich Ag -v- Crossseas Shipping Limited and others [2003] EWHC 1381 (Comm). At paragraph 7 of his judgment Morison J said this, and I quote:

    'Section 51 of the Supreme Court Act 1981 confers on the High Court a discretion in relation to the payment of costs of and incidental to all proceedings commenced there. Subsection (3) confers on the High Court "full power to determine by whom and to what extent the costs are to be paid". This subsection gives the court power to order that a person who is not a party to the proceedings to pay costs and in a number of reported and unreported decisions it has been held that the court necessarily has an ancillary power to order a party to proceedings, or solicitors who have been on the record for that party, to disclose, to the opposing party, the name or names of those who financed the litigation for the benefit of that party.'

    [15] And then the learned judge cited several previous cases and went on to say this:

    'None of these authorities is entirely satisfactory, for a variety of reasons, but the reasoning of Lord Justice Potter in the Abraham case is directly applicable namely, "where the power exists to grant the remedy, there must also be inherent in that power the power to make ancillary orders to make that remedy effective". Therefore, since section 51 empowers the court to make an order for costs against a person who is not a party to the action, the power would be ineffective unless there was an inherent power to discover who such persons might be. It does not, of course, follow that once the identities are revealed the Court will go on to make an order against anyone who has been identified. That is a matter for the discretion of the court at the second stage. I am satisfied that I have the power to make the order which is sought.'

    [16] Counsel for the defendants submits with considerable force that, by a parity of reasoning, the Court must have an implied power to order the disclosure of the identity of the third party funder of the claimant's litigation to the defendants, to enable the defendants to apply, if they think fit, for an exercise of the Court's new power under CPR 25.14."

  22. At [17], the learned judge recorded that "So much is now not in dispute", i.e. it was not in dispute by the time he gave judgment that he had power to order the claimant to disclose the identity of the third party funder. But the defendants wanted more, namely, "disclosure of a copy of the funding agreement , and also a statement by the claimant whether the third party funder stands to take a share of the proceeds of the litigation". As to the latter, the defendants' submission was that "they should have that information because otherwise it cannot determine whether it is in a position to make a properly founded application to the Court under 25.14, because it cannot tell whether one of the conditions in sub paragraph (2) of 25.14 exists" (see at [18]).
  23. The decision on the existence and extent of the court's power is then at [23]-[24] and [27]-[28], as follows:
  24. "[23] In my judgment, it must be right that the Court has, as a power necessarily inherent in CPR 25.14, the power to order disclosure to the defendant in proceedings the identity and address of any third party who has entered into an agreement to fund the prosecution of the action against the defendant within the terms of CPR 25.14. But I am far from satisfied, despite counsel for the defendants' valiant efforts to persuade me, that the Court has any inherent power at this stage, in other words before the launching of any application under CPR 25.14, to order the disclosure to the defendants of the actual agreement between the claimant and the third party funder.

    [24] It seems to me that a sight of the agreement or other information relating to its contents is not necessary to enable the defendants to mount an application for security against the third party under CPR 25.14.

    [27] This is not in my judgment a stage at which the Court can properly pre-determine the question of such disclosure in the absence of the third party itself from the proceedings.

    [28] On the other hand, I think that in the absence of any offer of such information from the claimant, the defendants would be entitled to an order from this Court at this stage for disclosure of the identity and address of the third party funder, and the disclosure of the answer to the question whether that third party funder falls within sub paragraph (2) of CPR25.14."

  25. I agree with all of that. That brings me to my one quibble. In expressing his conclusion that the identity and address of the funder should be provided to the defendants, not only to their solicitors, at [30] the learned judge referred to the order he had determined to be appropriate as "an order under the Court's inherent jurisdiction to make CPR 25.14 operable". Mr Davies submits that the learned judge was there referring to the inherent (residual) jurisdiction of the court, outside or beyond the CPR, rather than to a conclusion that there was power inherent (implicit) in CPR 25.14, i.e. a power that CPR 25.14 necessarily carries with it to make it work. In large part because of that submission, the argument before me ranged somewhat widely over that distinction. Read in isolation, the learned judge's particular choice of words at [30] could indeed be taken to connote the residual jurisdiction of the court. But it is to my mind plain from the major passages I have set out in paragraphs 15 and 17 above that the defendants' argument in Reeves, and the learned judge's conclusion, was that CPR 25.14 carried with it the power asserted by the defendants and found by the learned judge to exist. I do not think his arguably inapt choice of words at [30] is significant.
  26. In my judgment, it was rightly submitted in Reeves that the existence of power to require a claimant to identify his third party funder(s) (if any), to enable a defendant to pursue security from them under CPR 25.14, was supported by Morison J.'s decision in Raiffeisen Zentralbank Osterreich AG v Crossseas Shipping Ltd et al. [2003] EWHC 1381 (Comm), by Abraham et al. v Thompson et al. [1997] 4 AER 362 in the Court of Appeal, applied by Morison J., and by Bekhor (A J) & Co Ltd v Bilton [1981] QB 923 in the Court of Appeal, followed and applied in Abraham. In my view, those cases establish, as a matter of principle, that:
  27. i) "where the power exists to grant the remedy, there must also be inherent in that power the power to make ancillary orders to make that remedy effective", per Ackner LJ in Bekhor v Bilton at 942. (I observe in passing that Morison J. in Raiffeisen referred to this as Potter LJ's reasoning in Abraham, but strictly it was the reasoning of Ackner LJ, in turn quoted by Potter LJ in Abraham);

    ii) an order requiring a claimant to litigation to give the defendant the identity of a third party known to the claimant but not to the defendant, where the power exists within the litigation to grant a remedy against that third party, is such an ancillary order. That is the essential point of decision in Raiffeisen, supported, as I read it, by Abraham, although in Abraham the application for provision of information failed on the facts.

  28. I should dwell a little on Abraham. Two of the defendants sought the identity of the claimant's third party funder(s), so that they (the applicant defendants) could apply for a stay of the action unless the funder(s) provided security for costs (or agreed in a manner satisfactory to those defendants to accept liability for their costs). The application was granted by Lloyd J., but the Court of Appeal allowed an appeal. At the time, although there was (as there is today) power under s.51(1) of the Supreme Court Act 1981 (now the Senior Courts Act 1981) to order third party funders to pay a defendant's costs when liability for costs was determined, there was no power to order third party funders, in advance, to provide security for the defendant's costs. Mr Davies submitted, in substance, that that was not essential to the Court of Appeal's decision; in other words, although CPR 25.14 does now provide the court with power to require third party funders to put up security for costs, Abraham would still be decided the same way.
  29. I think that submission misreads Abraham. The key passages in the judgment are per Potter LJ at [1997] 4 AER 367j-368h, 376e-377c, and per Millett LJ at [1997] 4 AER 377e, 378h-379c. As I read those passages:
  30. i) It was essential to the decision that there was at that time no power to order security for costs against third party funders, because that being so:

    a) there could only be a question of staying proceedings by reference to the involvement of third party funders if the proceedings were an abuse of process, but there was no serious basis for supposing on the facts that there was or might be an abuse of process; and

    b) s.51(1) of the 1981 Act did not assist the applicant defendants, because that only gave the court power to order a third party funder to pay costs to the defendant where the defendant first had an extant right to costs.

    ii) There is power, ancillary to s.51(1), to order a claimant to reveal the identity of his third party funder(s), if necessary to enable a defendant with an established right to costs to make an application under s.51(1) against the funder(s) thus identified. Given (i)(b) above (and since abuse of process was not raised by the facts), until the defendant had an established right to costs, there was not yet any power available to the court to grant any remedy against the third party funder(s). Therefore, it was premature to be considering or exercising any power ancillary to such a power.

  31. The existence now, by contrast, of CPR 25.14 changes the landscape entirely. It provides the power, absent at the time of Abraham, to grant a remedy against third party funders without first establishing a right to costs, that remedy being an order for security for costs necessarily granted (if it is to be of any utility) before a right to costs has been established. It is still the case that identification of the third party funder(s), if any, will not be ordered as an ancillary pre-cursor to an application under s.51(1) until an application under s.51(1) could otherwise be made, which on the authority of Abraham requires the defendant to have an established right to costs. But that does not mean that it will not, let alone cannot, be ordered as an ancillary pre-cursor to an application under CPR 25.14 that can otherwise be made before the defendant has such an established right. An application for security for costs under CPR 25.14 can be made, and indeed is only really intended to be made, before, normally long before, establishing the defendant's right to costs. If it can otherwise properly be made, except that the defendant does not know against whom to make it, then there must be ancillary power, as Sir Donald Rattee said in Reeves, to require the claimant to identify the target. Mr Davies urged that it would be highly unusual (indeed he suggested unique to CPR 25.14) for there to be power in this way to require one side to litigation, in effect, to provide the other side with grounds for making an application under the CPR (if so advised). But Mr Davies' own explanation shows why, even if that be so, it is not a reason to doubt the power. In the main, powers under the CPR to grant remedies are powers to grant remedies to one party to proceedings against another party to those proceedings. Where there are conditions to be satisfied, then as in Abraham itself, if there is no serious basis for supposing that they are or might be satisfied, the court will not order the putative respondent to an application to fill that void. That would be to allow 'fishing expeditions'. On the other hand, if there is a serious basis for supposing that they are or might be satisfied, then that is sufficient for an application for the CPR remedy in question to be launched. Nothing more is needed, since the applicant knows against whom the application, ex hypothesi a properly arguable application to issue, should be made.
  32. But this case is not at all about allowing 'fishing expeditions', so far as the argument over the court's powers is concerned. This case starts with the assertion by RBS that, without any potentially circular reliance on Mr Wall's refusal to provide information voluntarily, there is good reason to believe that Mr Wall has third party funding falling within CPR 25.14(2)(b). If that is the case (which I consider later), then (absent contrary evidence from Mr Wall) the inference to be drawn at this stage is that the grounds stated by the CPR for the existence of the power to grant a remedy by way of security for costs probably do exist. However, subject to a further point raised by Mr Davies, RBS cannot make the application that ex hypothesi CPR 25.14 says it may make in those circumstances, because it does not know against whom that application lies. Mr Wall, however, does know. Inherent in the power to grant the remedy is the power to make ancillary orders to make it effective. To order Mr Wall to identify to RBS the party or parties against whom any CPR 25.14 application will lie, if made, is to do no more than to make such an ancillary order.
  33. The further point argued by Mr Davies, against that logic, was an afterthought. It was not mentioned or hinted at until introduced in oral argument, although if it were a good point the parties have wasted nine months and significant costs on a technicality. The suggestion was that not knowing the identity of Mr Wall's third party funder(s), assuming there is presently an inference to be drawn that they exist, has not prevented RBS from making an application under CPR 25.14, if so advised, identifying "Persons Unknown" as the respondents to the application and seeking substituted service on Mr Wall's solicitors. That does not make even superficial sense as an answer to the present application unless what is posited is an application in which the respondents would remain unidentified until (if at all) the application was determined in RBS's favour. Mr Davies, as I understood him, confirmed that that was indeed what was being posited. But that seems to me quite unrealistic. The court could not possibly, or fairly to either RBS or the funder(s), begin to consider whether security for costs should be ordered without knowing against whom the order would be made and investigating their circumstances, both generally and as regards the litigation in particular.
  34. For completeness, I should mention that Mr Davies also relied on SRJ v Persons Unknown [2014] EWHC 2293 (QB) and GFN SA v Bancredit Cayman Ltd [2009] UKPC 39, but it does not seem to me that either has any bearing on the present application.
  35. Subject, then, to the impact (if any) of Article 8 of the Convention, I conclude that:
  36. i) Where there is good reason to believe that a claimant has funding falling within CPR 25.14(2)(b), the court thereby has power to grant a remedy by way of security for costs against the funder(s) in question.

    ii) For an application to be made for the court to exercise that power, it is necessary to identify the funder(s) in question against whom any application will be made.

    iii) Where the defendant does not know that identity, but the claimant does, ordering the claimant to reveal it to the defendant is doing no more than making an order that is necessary to make effective the primary power (to grant a security for costs remedy under CPR 25.14).

    iv) The court therefore has the power to grant the present application.

    Article 8

  37. Article 8.1 of the Convention provides that "Everyone has the right to respect for his private and family life, his home and his correspondence". This application does not involve any invasion of Mr Wall's family life, home or correspondence. But Mr Davies submits that it does involve an invasion of his private life within the meaning of Article 8.1.
  38. Article 8.2 of the Convention provides that "There shall be no interference by a public authority with the exercise of that right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others." If the order sought would be an invasion of Mr Wall's private life within the meaning of Article 8.1, then Mr Mitchell inevitably accepts that it would be an interference with the exercise of Mr Wall's Article 8.1 right by a public authority. But he submits that if that be the position, nonetheless the interference would be in accordance with the law (being the exercise by the court of its powers under the CPR as subordinate legislation regulating the conduct of civil litigation in this jurisdiction). I think Mr Mitchell is plainly right about that, indeed I did not understand it to be disputed. Mr Mitchell then submits, further, that it would be no more an interference than would be necessary for the protection of RBS's rights and freedoms.
  39. As regards RBS's rights and freedoms, he relies on RBS's procedural right under CPR 25.14 to make the security for costs application it wishes to make, and says (if he needs to) that denying RBS the opportunity to make that application would be an interference with its right under Article 6 of the Convention, i.e. its right to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law, in the determination of its civil rights and obligations.
  40. I accept Mr Mitchell's argument in relation to Article 8.2, but do so without venturing a view on whether he is right to say that the frustration of RBS's legitimate wish to make an application under CPR 25.14 would infringe RBS's Article 6 right. It seems to me that RBS's procedural right, when confronted by litigation funded by non-parties with a stake in the game, to seek a remedy provided by the law against such non-parties, is a sufficient right or freedom to engage the exception within Article 8.2 permitting infringement of Mr Wall's right to private life, so long as the interference is limited to that which is necessary to protect that right of RBS's. On my analysis of the ancillary power I have held to exist, subject to any consideration of Article 8, it exists only to do that which is necessary to make effective the court's power under CPR 25.14 to grant a remedy to RBS. It will therefore only be exercised where exercise is so necessary, and therefore where it is necessary to interfere with Mr Wall's right to private life (if that is engaged at all) to protect RBS's right to seek that remedy.
  41. In short, therefore, Article 8 is neither reason not to conclude that the ancillary power I have discussed above does indeed exist, nor reason not to exercise it if it would otherwise be proper to exercise it.
  42. It therefore does not matter whether Mr Davies is correct to say that Mr Wall's right to private life is engaged at all. For completeness, however, I do not think that he is correct about that. Understandably, the courts (whether the domestic courts or the European Court of Human Rights) have not sought to define exhaustively what matters might be within the scope of Article 8.1 as matters of private life. The ECHR have given the flavour by saying that Article 8 is concerned with "rights of central importance to the individual's identity, self- determination, physical and moral integrity, maintenance of relationships with others and a settled and secure place in the community" (Connors v United Kingdom (2005) 40 EHRR 9 at [82]). To similar effect, Lord Bingham in R (on the application of Razgar) v Secretary of State for the Home Department [2004] 2 AC 368, at [9], said that private life under Article 8.1 extended "to those features which are integral to a person's identity or ability to function socially as a person"; and Baroness Hale elaborated upon the notion that "Article 8 protects the private space, both physical and psychological, within which individuals can develop and relate to others around them" in R (Countryside Alliance) v A-G [2007] UKHL 52, [2008] 1 AC 719, at [116].
  43. The existence of a business context does not preclude the possibility that an individual's private life is involved, for the purpose of Article 8.1. But that means only that the fact that this litigation generally, and Mr Wall's funding arrangements in particular, are business matters, does not without more take a desire not to reveal the identity of funders outside Article 8.1. The question remains whether it is in there in the first place. In my judgment, it is not.
  44. With the benefit of external funding, if RBS is correct that that is how matters presently appear, Mr Wall has embarked upon large, very high value, public litigation, under a system of law that provides for the identity of third party funders to become public, within that litigation, by virtue of s.51(1) of the 1981 Act and (if I am otherwise right about it) CPR 25.14. That to my mind means that the identity of Mr Wall's funder(s) does not seem at all like an aspect of his private life as a person and UK citizen. Indeed, the suggestion that it does is very odd in circumstances where it is accepted that, were RBS in possession of a costs order today, the identity of Mr Wall's funder(s) would be apt to come out for the purposes of s.51(1). I do not think the character of the information sought as part of Mr Wall's private life, or not can be affected by whether the information is sought before RBS has a costs order, in the hope on its side that it will obtain an order for security for costs against the funder(s), or only after it has a costs order against Mr Wall, in the hope on its side that it will then obtain a further order for the same costs against the funder(s).
  45. Where there is no reasonable or legitimate expectation of privacy, the right to private life is not engaged (see Von Hannover v Germany (2005) 40 EHRR 1 at [51], Campbell v Mirror Group Newspapers Ltd [2004] 2 AC 457 at [21], Murray v Express Newspapers plc [2009] Ch 481). Mr Wall, assuming he considered at all seriously the consequences of launching these proceedings against RBS with third party funding, could not have thought that the identity of his funders would be a matter he could keep private. He might have considered that, depending on how matters went, that identity might or might not in fact ever need to come out. But that is different. If the order sought today is otherwise appropriate, that will be because the court has decided that Mr Wall appears to be funded and that the identity of his funder(s) does need to come out. The case is therefore quite different to Revenue and Customs Commissioners v Bannerjee (No 2) [2009] EWHC 1229 (Ch), [2009] STC 1930, cited by Mr Davies. In that case, the Revenue had appealed against a taxpayer's successful appeal to the General Commissioners after an amendment to her self-assessment tax return relating to training and associated expenses. Henderson J. heard the Revenue's appeal, sitting in public, and circulated his judgment in draft to the parties, in confidence, in the normal way, stating when he proposed to hand it down. The taxpayer applied to the learned judge for an order that his judgment be anonymised to protect her private life and an associated injunction against the Revenue to bolster the first order if granted. The application was refused on the basis that it was a clear case where any interference with the taxpayer's Article 8.1 right was justified under Article 8.2. However, Henderson J. had no great difficulty at [34] assuming in the taxpayer's favour that intruding into her tax affairs, and her dealings with the Revenue in relation to them, engaged her right to private life (had it not been lost by virtue of the degree to which matters had proceeded in public already). That was, to my mind, a straightforward recognition of the essentially private nature of a citizen's conduct in providing to the Revenue information on her personal finances in order to ensure that she pays her due amount in tax. It bears no similarity to a decision to embark upon litigation such as the present, in the public arena, through a third party funding arrangement.
  46. The Facts / Discretion

  47. I propose to deal with the facts, and why in my judgment it is appropriate as a matter of discretion to make the order sought, relatively shortly. That is for two reasons. Firstly, as I indicated at the outset, in reality a stand has primarily been taken on whether I have power to grant the order (and on Article 8 both as an element of that and as a basis for objecting to any order being made if there is power to make one), rather than on the merits of the making of an order, at all events on the approach I take to that, as I shall describe shortly. Secondly, I envisage that there will now be an application by RBS under CPR 25.14, unless compliance with the order I now make demonstrates, contrary to my present expectation, that CPR 25.14(2)(b) does not apply after all, or the parties reach some compromise that resolves matters as regards CPR 25.14. Either way, I judge it more seemly that I say no more about the prospective merits of any application under CPR 25.14 than is necessary for present purposes. That does still mean, of course, that I must say something about Mr Davies' contention that Mr Wall's ATE insurance arrangements trump all.
  48. I set out in paragraph 8(ii) above how RBS puts this application, on the facts. It seems to me that so long as an application by RBS under CPR 25.14 (if it knew against whom to apply) would be pursued on proper grounds and have a serious prospect of success (as opposed to being speculative or fanciful), then it is a material prejudice to RBS to deprive it of the opportunity to make and pursue that application by allowing it to be kept out of knowing the identity of the proper respondent to it. By contrast, having ruled against Mr Wall as to Article 8, I agree with Mr Mitchell that there is no case raised at all of prejudice to Mr Wall that might have to be balanced against that (see paragraph 9 above).
  49. This litigation is large and complex. It raises for investigation events spanning a period of at least six years. There will be expert evidence from up to five different expert disciplines. RBS estimates that to the conclusion of the trial its costs will exceed 9 million (before VAT). On the evidence put before the court at this stage, Mr Wall appears to be an individual without the means to fund litigation of this magnitude, complexity or expense. With no evidence to the contrary to weigh in the balance, which is the position today, the inference I draw is that Mr Wall must be litigating with the benefit of third party funding. The litigation, although now under Mr Wall's name, is in pursuit of rights against RBS (if any) not of Mr Wall but of OPG. There is no evidence from which to suppose that anyone would be willing to fund the litigation altruistically. The probability must be absent, again, contrary evidence to put in the balance that whoever is funding the litigation is doing so in return for a share in any proceeds.
  50. There is therefore good reason to suppose that the case does fall within CPR 25.14(2)(b) and an application thereunder by RBS would be made on proper grounds, subject to identifying the correct respondent(s).
  51. In the light of the matters summarised in paragraph 38 above, again as the evidence stands before me now, there is every reason to think that Mr Wall will not be in a position himself to discharge the extremely large costs liability he will incur if RBS succeeds at trial. There has been no suggestion that merely identifying his funder(s), so as to allow a full argument as to whether security for costs should be ordered, might stifle the claim.
  52. There is, as it seems to me, a serious argument as to whether Mr Wall's ATE insurance position will matter, in an application against third party funders under CPR 25.14, even if it would 'see off' a security for costs application against a corporate claimant following cases such as Geophysical Service Centre v Dowell Schlumberger (ME) Inc [2013] EWHC 147 (TCC) and NGM Sustainable Developments Ltd v Wallis [2015] EWHC 461 (Ch). On an application against a claimant, the court must balance the defendant's desire to be paid its costs if it succeeds in the litigation against the fact that an impecunious claimant may be deprived of access to the court if security is required. RBS will submit, says Mr Mitchell, that the position is different in an application against a third party funder buying a stake in the claim or its proceeds: the application is then not against an impecunious claimant seeking to vindicate rights, but against a professional entity seeking to profit from the litigation of others and likely to be well able to secure the defendant's costs. That seems to me a serious and important argument and RBS should have a proper opportunity to pursue it. Mr Davies suggested that it would be curious for RBS to be in a better position as regards security for costs, arising at least indirectly out of the impecuniosity of Mr Wall as claimant, than it would be in if OPG had sued, as an insolvent corporate claimant. As it presently strikes me, though, Mr Mitchell is not contending for RBS to be better off in that way, at all events if the proper comparison is drawn. The proper comparison is with the position if OPG were litigating in its own name, insolvent but funded such that CPR 25.14(2)(b) applied. RBS would then be in the same position, on its case, as regards security for costs from the funder; and it would be in either the same position, or a better position, as regards security for costs from the claimant, since it could at least apply for security from OPG (whether or not that application would succeed as a matter of discretion), whereas it cannot from Mr Wall.
  53. There is also, as it seems to me, a serious argument that RBS should have a full opportunity to pursue as to whether Mr Wall's ATE insurance arrangements are such as would defeat a security for costs application against a corporate claimant. Those arrangements have been evolving, in the face of RBS's pursuit of this application and the related threat of an application for security for costs under CPR25.14 if this application first succeeds. But even as they now stand, with improvements (as Mr Wall contends) since this topic was initially raised at the first CMC before Phillips J., in my judgment RBS has serious grounds for contending that they should not be treated as a complete answer to any security for costs application.
  54. For those reasons (paragraphs 40 to 42 above), I conclude that there is indeed, as Mr Mitchell submitted, a serious basis for thinking that the court may order security for costs under CPR 25.14 in this case.
  55. Conclusion

  56. In the round, RBS has a proper basis to pursue an application under CPR 25.14 if only they can identify the correct respondent(s) to such an application. The order sought will require Mr Wall to provide information which he has that will enable RBS to identify that respondent or those respondents. There is a serious argument then to be had, on the merits, not between RBS and Mr Wall, although no doubt Mr Wall formally has an interest, but between RBS and the correct respondent(s), once identified, as to whether they should be required to put up security for RBS's costs. There appears to be a real prospect of success for RBS, I need say no more, on that argument. To deprive RBS of the opportunity to pursue that application would be a material prejudice; there is no suggestion of prejudice to Mr Wall if the current application is granted as a pre-cursor to an application under CPR 25.14, except the suggestion, which I have rejected, that the order sought would impermissibly infringe his Article 8.1 right to respect for his private life. I think the balance overwhelmingly favours the order sought being made, subject to the precise wording, and that in my judgment is the fair and proper order to make in all the circumstances.
  57. Result

  58. Having thus concluded that there is power ancillary to CPR 25.14 to make the order sought by RBS, that Article 8 of the Convention neither detracts from that conclusion nor stands in the way of exercising that power in this case, and that there is an overwhelming case in favour of the order sought on the facts, this application by RBS succeeds. I shall order that Mr Wall within seven days provide the name and address of any party, and of all parties if more than one, that has or have contributed or agreed to contribute to Mr Wall's costs herein in return for a share of any money or property that Mr Wall may recover herein. I shall hear counsel as to whether the order should be for a witness statement, and if so from whom, rather than, for example, a solicitors' letter, and as to costs.


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URL: http://www.bailii.org/ew/cases/EWHC/Comm/2016/2460.html