High Court orders disclosure of DBA and funding

Stuart-Smith: Reasonable transparency required

The High Court has ordered the claimants in a major group action to disclose details of both the damages-based agreement (DBA) and third-party funding arrangements they have entered into.

Mr Justice Stuart-Smith the case would not be able to settle without such “reasonable transparency”.

The claimants are bringing the action on their own behalf and on behalf of more than 27,500 Nigerians who claim there were affected by an oil spill in 2011 for which they blame Shell.

Jalla & Ors v Royal Dutch Shell Plc & Ors [2020] EWHC 738 (TCC) dealt with consequential matters following on from the judge’s ruling on various preliminary issues, including limitation, earlier this month.

One of them was the funding of the case. The defendants requested clarity on “the exact role” played by the claimants’ solicitors, central London firm Johnson & Steller, “particularly in light of the [DBA] entered into with the claimants (in relation to which we reiterate our request for further information)”.

They also wanted to know the role played by Johnson & Steller’s ‘agents’, listed City law firm Rosenblatt, particularly as the claimants had previously disclosed that the latter was to be paid from the former’s share of its DBA in the event of success.

In addition, they sought details of any third-party funding arrangements, including how much the funder would receive in the event of winning and whether it covered adverse costs.

Stuart-Smith J said: “The information is relevant both to questions of costs and to settlement and, in my judgment, should be provided in order that the defendants and the court may understand what the risks to which the defendants are exposed may be and the extent to which the playing field is, in this respect, not level.

“This court is prepared to take judicial notice of the fact that settlement of large litigation is rendered virtually impossible in the absence of reasonable transparency about these matters.”

The judge ordered the claimants to provide the information by 1 April, and said any objection would be decided on the papers based on submissions limited to 750 words from each side.

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