Solicitors split over funders

CASH FOR QUESTIONS: Appeal Court rules that Neil Hamilton's backers not liable to pay costs

Solicitors clashed last week over the Court of Appeal's finding that the financial backers of disgraced former Tory MP Neil Hamilton are not liable to pay Mohamed Al Fayed's costs after his victory in the 'cash for questions' libel action.

Mr Al Fayed brought an appeal of the High Court's original finding that Mr Hamilton's backers - who include aristocrats such as the Duke of Devonshire and the Earl of Portsmouth, and Greek socialite Taki Theodoracopoulos - need not pay his costs.

The appeal court held that pure funders - those with no financial motivation, who are backing a case for charitable reasons - should not pay Mr Fayed's costs.

Lord Justice Simon Brown said: 'I conclude that...

the unfunded party's ability to recover his costs must yield to the funded party's right of access to the courts to litigate the dispute in the first place.'

Laurence Harris, partner at City firm DJ Freeman who acted for Mr Al Fayed, said: 'I don't agree with the court's view.

It is extremely dangerous to allow people to think that funding bears no risk.'

He said the case gave scope for parties to fund unmeritorious or unfair claims as if they were 'one-way bets', particularly where the party without the benefit of funding might be forced to defend a claim for which he could not pay.

Mr Al Fayed is still considering petitioning the House of Lords in a further appeal of the decision.

Sarah Webb, a partner with Russell Jones & Walker, which acted for four of the backers, said: 'This is an important decision which reinforces the intentions of the reforms to the civil justice system, by ensuring that a level playing field exists between those who can afford access to justice and those who cannot.'

Jeremy Fleming