Solicitors who help their clients by funding the cost of disbursements should not be liable for costs if a case fails, the Court of Appeal has ruled.

The ruling came after an intervention by the Law Society in the case of Flatman v Germany published today following a hearing last month.

Court of Appeal judge Lord Leveson (pictured) said he agreed with the Society that payment of disbursements, ‘does not incur any potential liability to an adverse costs order’.

The Law Society said the ruling will enable solicitors to address problems that their clients face in funding meritorious claims.

The case dealt with the situation where clients receive legal representation from a solicitor on a no-win, no-fee basis and the solicitor also agrees to cover the costs of the client's disbursements if the case is lost.

If the solicitor did not agree to cover the costs, the Society said clients might well be unable to begin the action and so lose even the opportunity to obtain compensation.

The original ruling in the High Court threatened such arrangements and the Society believed that it was right to intervene to ensure that the court was aware of the likely effect of the judgment. The Court of Appeal endorsed the Society's arguments.

Law Society president Lucy Scott-Moncrieff said: ‘These type of fee arrangements assist access to justice for litigants who cannot afford to bring the litigation themselves, often in the field of housing law, personal injury and trade union cases and are particularly important in a climate where so many cuts have been made to public funding.

‘Measures like this have been adopted by solicitors to facilitate access to justice and they would be acting under such circumstances only where they viewed the claim as being likely to succeed.’