COSTS NOT RECOVERED WHEN DEFENDANT NOT NAMED IN CFA: SENIOR COSTS OFFICE DECISION

The GWS website has a link to a decision of a decision of Deputy Master Friston made in the Senior Court Costs Office in Hailey -v- Assurance Mutuelle Des Motards (CCD 1405291). It relates to the question whether costs can be recovered when the effective defendant is not named in the CFA. It also has interesting observations on whether disbursements are recoverable if the CFA is not effective.

THE CASE

The claimant was injured in a road traffic accident in France when struck by a motorcycle. He issued proceedings against the rider and the rider’s insurer.  The CFA was signed which named the motorcycle rider as the defendant. Proceedings were issued against the rider and the rider’s insurer. The rider disputed jurisdiction and the action against him was struck out. Eventually the claimant agreed a £400,000 settlement with the insurer.

The insurer was being sued directly under French law and under the Judgement Regulations.

THE ARGUMENTS IN RELATION TO THE CFA

The insurer argued that the retainer was against the rider only and did not cover the insurer. There was no liability to pay.

THE DECISION

The Deputy Master held that this was a question of contractual construction.

26. In my view, in order for me to find that the phrase “Your claim against [the Rider] for damages for personal injury suffered on 7 July 2007” included a claim for damages against the Defendant, I would have to find that one of the following was correct:

a. That the reference to “against [the Rider]” was mistaken in the sense that it was not meant to be in the Agreement at all;

b. That the reference to “against [the Rider]” was mistaken in the sense that it ought to have read “against [the Rider] and the Defendant” (or “against [the Rider] or any other person who may be liable for damages”);

c. That the reference to “against [the Rider]” was not a mistake, but that the parties understood it to mean “against [the Rider] and the Defendant” (or “against [the Rider] or any other person who may be liable for damages”); or d. That the reference to “against [the Rider]” was not intended to restrict the ambit of the Agreement, but was merely intended only to better identify the accident.

27. There is no basis for me to make a finding that the use of the phrase “against [the Rider]” was a mistake. It plainly was not. As such, I can immediately rule out a. and b.

28. As to c., the Claimant’s witness statement made on 3 March 2015 reads as follows: So far as I was aware Curwens were pursuing the claim for damages on my behalf throughout. I was unaware of any difference between a claim against the French insurers with whom Curwens dealt with from the beginning or the driver of the motorcycle involved in the accident. Curwens were acting on my behalf to recover damages irrespective of whether the claim was brought against the driver or his insurers.

29. In my view, this evidence does not take the matter any further forward. It is not surprising (and is perfectly understandable) that the Claimant did not care very much about the legal niceties such as the precise identity of his opponent. The same can be said for the fact that his focus was on the fact that the Solicitors were pursuing his claim for damages. This evidence, however, is no more than evidence of the fact that the Claimant was happy to allow his solicitors to be his guide. If, at the time the Agreement was made, an officious bystander had asked the Claimant whether it included or excluded a claim against the Defendant, the Claimant would probably have said, “I don’t know; I leave all that to my solicitors”, or words to that effect. There is no evidence that he (or any reasonable observer) would have said “of course it includes the Defendant.”

30. Put otherwise, I am unable to find that the Claimant’s ambivalence as to the distinction between the Rider and the Defendant is evidence of an intention that the Agreement should have a wider ambit of application than the meaning of its words would ordinarily convey. Certainly, no reasonable bystander would have come to that conclusion.

WHO WAS THE ACTION AGAINST?

The Deputy Master also considered whether the claim was a claim against the rider. He held it was not, it was clearly a claim against the insurer. The action against the insurer was a different cause of action.  There was a clear difference between a claim against the tortfeasor and the insurer.

AN UNHAPPY DECISION

46. For all these reasons, whilst I am unhappy at having to do so, I have no option but to find that there has been a breach of the indemnity principle. I have to confess that I have found this matter to be very difficult to decide; if the Claimant would like permission to appeal my decision, I will readily grant it. I have had the benefit of having heard detailed and expert submissions on the meaning the Agreement, but I did not hear any detailed submissions about the nature of the claim. It is entirely possible that a different court, having had the benefit of hearing argument on that issue, may come to a different conclusion.

THE CLAIMANT COULD STILL RECOVER DISBURSEMENTS

The judge found that the claimant could still recover disbursements.

47. Having come to the conclusion that I have, I need to rule on whether the Claimant is able to recover disbursements. I find that he can. This is because the evidence shows that payment of the disbursements was never intended to be conditional; the Claimant knew he would be liable for them regardless of the outcome of the claim. I reject Mr Gibbs argument that the Agreement provided that the disbursements were not to be payable unless the claim was won. It is quite clear from the Law Society terms and conditions that this was not the case. In any event, the Defendant cannot approbate and reprobate the Agreement. Either it covers the costs in the Bill of Costs, or it does not. I have found that it does not.

48. If find that the fact that the contract of retainer (i.e. the Agreement) does not cover the claim against the Defendant is not fatal to the Claimant’s ability to recover the disbursements from the Defendant, this being because the vacuum left by the absence of a contract of retainer would be filled by an implied agreement that the Claimant would pay disbursements in order to allow his solicitors to pursue his claim for damages. This is distinguishable from cases in which there has been a breach of the indemnity principle as a result of the contract in question being found to be unenforceable, because in those circumstances, there is no vacuum left by the absence of a contract of retainer.

One comment

  1. Not naming the Defendant isn’t fatal. Naming the wrong Defendant is.

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