Further to the March 2017 decision in the RBS Rights Issue Litigation that opened the door for RBS to ascertain who the funders were (Hunnewell Partners and LNCP), RBS sought security for costs against them.

The claimant in this case was a company that built consumer group actions online. It did this by entering into claim purchase agreements whereby it took an assignment of the consumers’ claims. It then aggregated the claims and brought them in its own name. As a business model, it was a model that could be suited to the commercial litigation funding industry. Naturally, therefore, funders were interested in the outcome.

Group actions appear to be the bread and butter of funders and the interest in collective action has only increased with time. An issue arose in the RBS rights issue litigation as to the circumstances in which the Court may require disclosure of the names of commercial funders, and the details of any ATE insurance, in advance of a threatened application for security for costs when a trial is imminent.

It is always the case that costs issues will be particularly acute in hard-fought group actions. In the HBOS/Lloyds litigation, the Court was invited to make a costs management order for future costs.

It was inevitable that Excalibur would reach the Court of Appeal and it was notable that the Association of Litigation Funders (ALF) intervened in the proceedings, making written submissions only.

This case addresses a key question for both claimant and funder – to what extent can the funding arrangements remain confidential?

Whilst only a couple of years after the disasters of Excalibur, following this case litigation funders began to lick their lips and look seriously into commercial arbitration. The reason was that the Court held in this case that a costs order could include the funding costs of an arbitration.

One of the challenges for a litigation funder has been the extent to which it can step into a litigant’s shoes. The law on third parties’ involvement in litigation – which is of course what litigation funding is all about – is complex.

This case is often the first experience that lawyers and observers have of litigation funding and it is not a good one.