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Solicitors given green light to fund claims

11 April 2013

The Court of Appeal has ruled in Flatman v Germany that a solicitor funding a disbursement does not mean they become a ‘real party’ to the litigation and therefore liable to meet the costs of successful defendants.

Initially, Eady J gave a favourable judgment in the Commercial Court to the insurers stating that on some occasions it may be sufficient that the funder has something to gain alongside the nominal party therefore having an interest in the litigation.

However, the Court of Appeal stated that although the legislation in place does visualise the possibility of the solicitor funding a disbursement it does not automatically mean they incur any potential liability to an adverse costs order. It remains to be seen whether in the post Jackson world further applications may be made to the court where it is felt that but for the backing of a solicitor’s firm the claimant would not have brought the claim.

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