More Bad News for Claimant Solicitors as The High Court in the conjoined cases of Germany v Flatman andBarchester Healthcare v Weddall [2011] EWHC 2945 (HC) has ordered a law firm to disclose the details of its funding arrangements with two clients so the successful defendants can work out whether the solicitors financially supported the cases and could be pursued for a third-party costs order.

Both cases were run by a Norwich based firm of solicitors under conditional fee agreements without after-the-event insurance. The defendants’ common insurer – which suspected that the claims were funded to some extent by the solicitors – successfully appealed a refusal to grant disclosure of documents outlining the funding arrangements.

The judge below, His Honour Judge Moloney QC, had said the impact of such orders “could be to undermine or perhaps even to destroy the workings of the CFA system”, but Mr Justice Eady ruled that the judge “overestimated the consequences of the defendants’ applications… These appeals turn largely upon the particular facts. Either GMS were the funders or they were not”.

The implications this Judgment may have on the ‘CFA system’ are yet unclear, however Mr Justice Eady continued and stated that it may be necessary to make an order for disclosure of documents to help a “vulnerable defendant, or for that matter his insurer” establish what exactly passed between the claimant and his solicitor. Our Costs lawyer advises whether, following disclosure, an application for a third-party costs order is made, “that is a matter for the future”. Costs Lawyer More Bad News for Claimant Solicitors