High Court brands bid to uncover identity of third-party funder a “fishing expedition”

Marampa mine: contract dispute

Marampa mine: contract dispute

The High Court has refused an application to make a defendant disclose the identity of its third-party funder.

His Honour Judge Keyser QC, sitting as a High Court judge, said that it appeared to be “in the nature of a fishing expedition”.

He was ruling in Dawnus Sierra Leone Ltd v Timis Mining Corporation Ltd & Anor [2016] EWHC B19 (TCC), a dispute over payments under a contract for works to be done by the claimant for the defendant at the Marampa mine in Sierra Leone.

The claimant sought, among other things, an order that the defendant disclose the identity of the third-party funder backing its litigation both in England and in Sierra Leone, and confirm in respect of each such funder whether he, she or it comes within the conditions set out in CPR rule 25.14(2)(b), which enable a defendant to seek an order for security for costs against a third-party funder where they are receiving a share of the proceeds in return.

The claimant was making the application as the defendant in Timis’s counterclaim.

HHJ Keyser said: “The evidence that has been put in by the defendant and has not been contradicted is to the effect that its funding comes from two sources: first, its own resources; second, a third party who has received no agreement for a share of proceeds of the litigation, who has taken no security and who has received no fee for the lending.

“In those circumstances, it seems to me that there is simply no evidential basis on which I could properly order disclosure in furtherance of the court’s power under rule 25.14.”

The claimant’s alternative argument was that the court had the power to order disclosure of the funder ancillary to the power under section 51 of the Senior Courts Act 1981 and part 46 of the Civil Procedure Rules 1998 to make an order for costs against a third party.

But the judge was similarly unmoved: “In my judgment, the exercise of such an ancillary power at this stage would be clearly inappropriate. If hereafter the claimant were intending to seek an order for costs against a third-party funder and there appeared to be grounds on which such an order might be made, of course the court would not be prevented from making a third-party costs order because it lacked knowledge of the identity of the third party funder; it would, if it considered appropriate, make an order for disclosure of the identity of the funder and the basis on which the funding had been provided.

“However, I see no proper basis at all for making that kind of an order in advance of circumstances in which an application could be countenanced. To do so would be inappropriately intrusive and in the nature of a fishing expedition.”

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