• A reputation for professional excellence with integrity

    A reputation for professional excellence with integrity

  • Accurate understanding and technical analysis

    Accurate understanding and technical analysis

  • National and International Experience

    National and International Experience

  • 34 years in private legal practice

    34 years in private legal practice

  • A focus on events and consequences, not gossip

    A focus on events and consequences, not gossip

  • Helping lawyers, brokers, accountants, surveyors and other professions

    Helping lawyers, brokers, accountants, surveyors and other professions

  • There when you need him

    There when you need him

Legal Viewpoint June 2018

20 Jun 18

Non-Party Costs Awards: A Wide Discretion

What happens if some or all the damages and/or costs awarded to a claimant exceed or fall outside the scope of the defendant’s insurance cover; and who picks up the tab if the defendant lacks the means to pay them? The conventional expectation, and outcome in most cases, is that it’s tough on the claimant: the insurance limits are set by the defendant’s policy contract with the insurer and if it doesn’t respond to cover the un- or under-insured part of the exposure, then that’s that. But there is at least one life-line for claimants, namely to ask the court to make an order’ directly against the insurer to pay the costs, even though they are not formally a party in the action, on grounds that the insurer has effectively had control and conduct of the defence case. The rules and principles for these ‘non-party’ costs applications have however been intricate as well as uncertain, and have tended to favour the insurers. But there has been a sea-change decision, prospectively beneficial to claimants and bad news for insurers, by the Court of Appeal in Travelers Insurance Company Ltd v XYZ [2018] EWCA Civ 1099. It has held that the range of discretion available to a court in these cases has no limits, save that it must be exercised justly.

The facts of the case were somewhat unique – a thousand--claimant group action against several defendants, only one of which, Transform Medical Group, was insured by Travelers, and then only in respect of 197 of the 426 claims brought against it.  The trial judge awarded all the uninsured claimants’ costs against Travelers, who duly appealed, arguing that the discretion available to the courts and applied in precedent cases did/does not allow for such a broad-brush approach. But the CA disagreed: “  the court is not concerned with legal rights and obligations but with a broad discretion which it will seek to exercise in a manner that will do justice. The only immutable principle is that the discretion must be exercised justly. … The costs of defending the preliminary issues, for both claimants and defendants, were the same whether there had been 197 claims or 623. … the value judgment that [the trial judge] reached was one that was open to her.”

 

Back to News

Professional Risk Expertise

Mike Willis has worked with a diverse range of professions including...

The FMWL Approach …

  • Accurate understanding and technical analysis;
  • Focus on duty, causal event(s) and consequences; not gossip…
  • Sensitive but objective empathy;
  • Overarching commerciality; and
  • Clear aims, with vision where necessary to explore indirect routes to solutions.