Success for Andrew Roy on novel and important costs point

Green v Generali FA and Kimmins per Costs Judge Rowley at [41]:

raises a novel point about the interaction between the Medway Oil approach to claim and counterclaim with the traditional splitting of work done between more than one claim where the work has benefitted both proceedings. I have not found this point easy and I am unaware of any direct authority upon it.”

More generally, the case provides an important illustration of: (1) the perils of the bear trap that is Medway Oil and Storage Co Ltd v Continental Contractors Ltd [1929] AC 88; (2) the consequential need to be exceptionally careful as to what orders are obtained or agreed in any multi-party action.

Andrew Roy, instructed by Adil Faiz at Shakespeare Martineau, appeared for Mr Kimmins (D2) via his insurers DLG.

The claim arose out of a catastrophic road traffic accident in France in which D2’s passenger tragically died and in which D2 suffered severe injuries.   C (the passenger’s estate) brought a claim against D1 (the insurer of the other driver).  D1 issued contribution proceedings against D2.  D2 had already brought his own claim against D1.  The actions were ordered to be tried and managed together.

D1 and D2 sensibly agreed to meet 50% of C’s claim each, to be adjusted as necessary in light of the resolution of liability between each other.    C’s claim settled on this basis.  D2’s contribution claim against D1 and D1’s claim against D2 were subsequently compromised 75%/25% in D1’s favour.

The liability agreement in respect of D2’s claim against D1 was embodied in a consent order which provided that “[D1] shall pay [D2’s] costs of liability”.  Quantum of D2’s claim was subsequently agreed.  This agreement was also embodied in a consent order which provided that: “[D1] shall pay [D2’s] costs of the action.  The liability agreement in respect of D1’s contribution claim against D2 was later embodied in a third consent order which provided that “[D2] shall meet [D1’s] costs of the Part 20 Claim”.

D1 subsequently served a bill on D2 claiming costs of dealing with liability, etc in respect of C’s claim and D1’s concurrent claim against D2, applying a 50% moiety (apportionment).

D2 contested D1’s entitlement to any liability costs.   He did so primarily on the basis of the Medway Oil principle that a claimant who successfully defends a counterclaim is “only entitled to such extra costs as were occasioned by the counterclaim”.  D2’s argument was that this principle applied to any additional claim (Cinema Press Ltd v Pictures and Pleasures Ltd [1945] KB 35, Parkes v Martin [2009] EWCA Civ 883) so as to preclude recovery, D2 having not obtained a wider or more tailored costs order.  He also argued that the same result was arrived at by conventional construction of the order in D1’s favour against the background of the previous orders.  D1 in reply argued that this was incorrect and unfair given that, between D1and D2, D1 won 75/25.

Cost judge Rowley found for D2, holding that D1 could not recover any liability costs.

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