Greene Wood & McLean v. Templeton Insurance [2009] EWCA Civ 65 (CA)
Greene Wood & McLean v. Templeton Insurance [2009] EWCA Civ 65 (CA)
Procedural backgroundThe Claimant solicitors (‘GWM’) acted for miners in claims against their Unions and former solicitors in respect of the handling of their claims for compensation under the British Coal VWF and COPD Schemes.
The Defendant insurer (‘T’) provided ATE insurance to the miners. T was incorporated in the Isle of Man.
The miners, represented by GWM, had unsuccessfully applied for a Group Litigation Order (‘GLO’) and had been ordered to pay the costs of that application. GWM discharged the miners’ costs liabilities.
The ATE insurance was available to cover the costs of the GLO application. GWM sought to recover these costs from T on the basis that: a) It was an implied term of the contract between GWM and T that would meet valid claims under the ATE policy (‘the direct contract claim’), or; b) GWM was entitled to seek contribution from T under the Civil Liability (Contribution) Act 1978 (‘the contribution claim’).
Since T was incorporated in the Isle of Man, permission to serve out of the jurisdiction was needed.
CPR r.6.20(5)(c) provides:-
“…a claim form may be served out of the jurisdiction with the permission of the court if –
…
(5) a claim is made in respect of a contract where the contract -
…
(c) is governed by English law…”
GWM argued that the claim came within CPR r.6.20(5)(c) on the basis of: a) an implied term in a direct contract between themselves and T, and; b) T’s liability in under the Civil Liability (Contribution) Act arose in connection with the ATE policy which was governed by English law. Service out of jurisdiction was permitted on both bases.
First instance
The judge hearing the application dismissed the claim based on an implied term in the contract between GWM and T. However, he gave permission for service out on the basis that the contribution claim was within CPR r.6.20(5)(c). Both sides appealed.
The Court of Appeal’s decision
The direct contract claim
The Court of Appeal (per Longmore LJ at paras. 6-16) held that there was a serious issue to be tried as to whether a term requiring the insurer to meet claims under the ATE policy should be implied into the contract between T and GWM.
It was necessary to imply such a term, because otherwise there could be a ‘black hole’ whereby the insurer could decline liability for a ‘bad reason’ and (if the miners’ chose to look to their solicitors rather than their ATE insurer), the insurer would not have to pay proper claims when it should have done.
This was especially the case since GWM would have no right of subrogation, having paid to discharge their own liability to the miners, and not that of the insurer.
The claim for contribution
The Court of Appeal held (paras. 17-20) that for a claim to be “in respect of a contract” within the meaning of CPR r.6.20(5)(c) it did not have to be in respect of a contract between the intended Claimant and the intended Defendant (an interpretation which would add words to the rule).
GWM’s claim had a clear connection with a contract (the ATE policy) which was governed by English law. The remoteness of the contract was something that would be decided when the Court considered jurisdiction under CPR r.6.21(2A).
The Court of Appeal further agreed (paras. 21-27) that GWM and T were “liable for the same damage” under the Civil Liability (Contribution) Act, namely the miners’ liability to pay the costs and disbursements of the GLO application. T’s argument that GWM’s true liability was liability for negligence for having pursued a hopeless application was rejected.
Ronald Walker QC appeared on behalf of the successful cross-Appellant, GWM.
Edward Kemp, 12 King's Bench Walk