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1 Neutral Citation Number: [2015] EWHC 1761 (QB) IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION LIVERPOOL DISTRICT REGISTRY Case No: A90LV040 Royal Courts of Justice Strand, London, WC2A 2LL Date: 23/06/2015 Before : MR JUSTICE EDIS Between : DANIEL DAVIES (a protected party who proceeds by his father and litigation friend ROBERT DAVIES) - and - (1) THOMAS FORRETT Claimant (2) RYAN PARTINGTON (3) SOUTHERN ROCK INSURANCE COMPANY LIMTED Defendant And by Part 20 proceedings between SOUTHERN ROCK INSURANCE COMPANY LIMTED - and - (1) RYAN PARTINGTON (2) DANIEL DAVIES (a protected party who proceeds by his father and litigation friend ROBERT DAVIES) Claimant Defendant Stephen Grime QC (instructed by EAD Solicitors LLP) for the Claimant Craig Sephton QC (instructed by Horwich Farrelly Solicitors) for the First Defendant James Plant (instructed by JSB Solicitors Limited) for the Second Defendant Patrick Blakesley (instructed by Sintons LLP) for the Third Defendant Hearing date: 17 th June 2015 Approved Judgment

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3 I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic. Mr. Justice Edis : 1. This judgment concerns only costs. In it, without any disrespect, I shall refer to the parties as follows:- The claimant and second defendant to the Part 20 claim. The passenger in the Saxo. The first defendant to an action brought by Davies and the defendant to an action brought by Partington, and second defendant to the Part 20 claim. The driver of the Vectra. The Second Defendant to Davies action and First Defendant to the Part 20 claim, and claimant in his own action against Forrett. The driver of the Saxo. The Third Defendant to Davies action and Part 20 claimant. An insurance company which issued a policy in respect of the Saxo. Davies Forrett Partington Southern Rock The Claim 2. The claim was brought on behalf of Davies by his father. He was grievously injured in a road traffic accident on 30 th August 2011 when he was a passenger being driven to work by Partington in a Citroen Saxo. Forrett was driving his Red Vauxhall Vectra ahead of the Saxo along a single carriageway A road, the A550 just after a roundabout at Penyffordd in North Wales. There was one car between the Saxo and the Vectra and a further vehicle in front of the Vectra. Therefore, as the Saxo approached the scene of the accident, it had just left the roundabout and ahead of it were three vehicles. It appears to have accelerated very rapidly and decided to overtake all three at once. After it passed the first one and as it was about to overtake the Vectra and the car in front of the Vectra, the Vectra pulled out to overtake also. This caused the Saxo to brake sharply and to veer off the road into a tree. There was no collision between the Vectra and the Saxo. Forrett, in the Vectra, drove on to his place of work. Both Partington and Davies, in the Saxo, sustained serious injuries, those of Davies being particularly grave. Davies, of course, was entirely blameless. 3. Forrett was identified because a witness was able to say that the Vectra had a 54 plate and a small spoiler. These details are true of Forrett s Vectra. The police investigated and recovered CCTV which showed his Vectra very near the scene of the accident, very near the time of the accident. He arrived at work very soon afterwards and the accident occurred at a point consistent with it having involved his car on that journey. Despite this extremely strong evidence, he denied that it was his Vectra and suggested it was another red Vectra on a 54 plate, there apparently being another one in the area where he lives. He gave this evidence on oath at the Magistrates Court but was convicted of driving without due care and attention. It seems impossible that he could have been ignorant of the crash, if it was his vehicle, and he accepted as much when cross-examined at the trial. On that basis, if the Magistrates convicted him correctly, he was guilty of disgraceful behaviour. He had played a part in causing a very serious accident, driven away from it, and then lied on oath to avoid its consequences. Obviously if he continued to adopt that stance in any subsequent civil proceedings, such conduct might become relevant to costs. The Particulars of Claim were served on 10 th May 2014 and relied upon the conviction.

4 4. On 18 th August 2014 Forrett s insurers served his defence. It admitted the accident to the Saxo, and that he was the driver of his red Vectra on the road on the relevant day, but denied everything else. It alleged that the accident was entirely the fault of Partington. In relation to the conviction, the Defence contains the following time honoured but, here as in many cases, mystifying words:- The defendant admits the conviction referred to in the Particulars of Claim but denies its relevance to the civil proceedings. 5. The lawyers acting for Davies decided, on receipt of this document, to accord it more respect than, with hindsight, it deserved. They took it at face value. Believing that it may be possible that Forrett would succeed in establishing that the accident was in no way his fault (perhaps because it did not even involve his red Vectra) they decided to join Partington as second defendant. Partington was driving the Saxo as a named driver on an insurance policy which did not cover commuting to work. The Insurer which issued that policy to Partington s partner, Southern Rock, was therefore denying any contractual or statutory liability to indemnify him and could only have been liable under Article 75 of the Motor Insurers Bureau Articles of Association. That liability would not arise if Forrett were liable for the accident to any extent, because he was insured. Therefore, Southern Rock had an interest in establishing that Forrett was liable for the accident (whether or not Partington was also liable). Southern Rock also had an interest in establishing that its position on the policy interpretation and under section 151 of the Road Traffic Act 1988 was correct. The lawyers acting for Davies were aware of this position which had been extensively canvassed in correspondence, and were aware that attempts by Southern Rock s solicitors between 19 th June 2012 and 1 st May 2014 to get a straight answer from the solicitors acting for Forrett s insurers (Admiral) had failed. They had been trying to find out whether he was denying liability or not. That correspondence no doubt started in June 2012 because Forrett was convicted by the Magistrates on 11 th May The defence served on behalf of Forrett, as I have indicated, perpetuated that lack of clarity. Thus, after that conviction, two years of correspondence and the issue of proceedings against him, Forrett continued to evade his responsibility for the accident. 6. Fearing, as it turned out wrongly, that there may be some rational explanation for Forrett s behaviour and that of his insurers (beyond a desire to escape the consequences of his wrongdoing) Davies lawyers amended the claim to include Partington and Southern Rock as second and third defendants respectively. Their amended Particulars of Claim was served on 17 th September Leave was given to join the additional defendants on 24 th November 2014 and an action which Partington had issued for damages against Forrett was consolidated with Davies claim. Lay witness evidence was ordered to be disclosed on 4 th March On 3 rd December 2014, Horwich Farrelly finally wrote to Sothern Rock s solicitors with a substantive response on behalf of Forrett and his insurers (Admiral) to the question of whether they accepted that Southern Rock had no liability to indemnify Partington. They said they could not say one way or the other and asked for some disclosure. They were no doubt hoping that Southern Rock could be prevailed upon to indemnify Partington because they felt that liability was likely to be apportioned between the two drivers. There is no reason to believe that Partington has any

5 substantial assets beyond the value of his claim for personal injuries against Forrett, and this was therefore the only way of reducing Admiral s liability. On 5 th December Southern Rock served its Defence disputing liability on behalf of Partington and blaming Forrett. It asserted that because Forrett was insured and had some liability it was not therefore liable as Article 75 insurer. Partington served a Defence blaming Forrett, denying his own liability and declining to admit that Southern Rock was contractually entitled to refuse to indemnify him. The Part 20 Action 8. The Part 20 claim form by Southern Rock was issued on 12 th January 2015 seeking a declaration against Partington that it had no liability to him. Partington served a defence and counterclaim in these proceedings on 2 nd February 2015 which said that Southern Rock had behaved unfairly and was in breach of implied terms on the insurance contract by so doing. This, according to an dated 9 th March 2015 from Partington s solicitors to Southern Rock s solicitors was drafted by Forrett s solicitors, who also drafted a request for Further Information under Part Southern Rock applied to join Forrett and Davies as second and third defendants to its Part 20 claim for a declaration. This was granted on 13 th March 2015 in respect of Davies only, and Forrett never became a party to the Part 20 claim. He had opposed the joinder. The contentions set out in Partington s first defence were never, therefore advanced formally by the party which had drafted them. Davies and Partington both served defences to the amended Part 20 claim. Davies s said little of substance. His interest lay in securing, if he could, a valuable indemnity for Partington in case Forrett succeeded in avoiding all liability, as he was still trying to do. He was, in reality, unable to contribute very much to this argument and did not seek to take any false points. He disputed his alleged liability in costs asserting that the claim against him was unnecessary. Partington served a defence on 7 th April 2015 which says that the Part 20 claim against him was also unnecessary, now that it had been properly formulated. It therefore did not adopt the approach taken in the earlier document drafted by Forrett s solicitors but served on behalf of Partington. On 18 th May 2015 a consent order was made granting the declaration sought by Southern Rock that it had no liability under the policy or section 151 of the Road Traffic Act The only way in which liability could attach to Southern Rock therefore was if Forrett were entirely exonerated and Partington were held liable. The issue of the costs of the Part 20 claim was reserved for determination by the court at the end of the Main Action or such other time as may be appropriate. The Claim continued 10. An application for a large interim payment was made on behalf of Davies. This was opposed by Forrett whose solicitor, Mr. Barrett, produced a witness statement accompanied by the necessary statement of truth dated 9 th March Apparently in reliance on a carefully selected extract from an independent witness who had given evidence at the Magistrates Court and secured the conviction of Forrett he said this:- I accept that the claimant is blameless and liability will attach to either Mr. Partington or Mr. Forrett or both. There is, however, a serious and substantial issue whether Mr. Forrett s driving caused the claimant s injuries.

6 And, later, he said this:- there is a serious and substantial issue whether Mr. Partington is insured in respect of the claimant s claim and whether he is a defendant whose liability will be met by the third defendant under section 151 of the Road Traffic Act Shortly before the hearing of the interim payment application, witness statements were exchanged. This revealed that on 2 nd March 2015 Mr. Forrett had signed a witness statement. He said that he was driving along the relevant road at about the relevant time, but that he had been unaware of any collision. He said how shocked he had been by his conviction. In other words, he said nothing of any real value. 12. The Interim Payment application succeeded because the District Judge held on 12 th March 2015 that it was highly likely that on that state of the evidence Davies would succeed against Forrett. On the day after that, a summary judgment application was issued. On 21 st May 2015 Forrett s lawyers served a skeleton argument disputing the application for summary judgment. This application was due for hearing by me on 17 th June 2015 but on 11 th June (3 months after the application had been issued) Forrett s solicitors wrote consenting to judgment and agreeing to pay the costs of the summary judgment application. This was just after the third anniversary of his conviction for an offence which, if correct, determined his civil liability. 13. As a consequence of that concession, Davies has a judgment which will be met by Admiral and no longer seeks to pursue his proceedings against Partington or Southern Rock. This is not because Partington is not liable, but because there is no advantage to Davies in suing him now. Davies has never contended that Southern Rock is liable to indemnify Partington and joined that company to the claim so that all issues which then appeared relevant could be determined in the one action. 14. Partington s claim against Forrett remains outstanding. I approach this costs exercise on the basis that it now seems inevitable that Partington will be entitled to judgment against Forrett, but that his damages may very well be reduced for contributory fault. Indeed, Mr. Plant has made an oral application for judgment against Forrett. I am not going to grant that application because there seems little point. I would dispense with the need for an application to be issued and supported by evidence if there were a clear benefit in doing so. It is accepted that there is a live issue to be tried as to apportionment of liability but contended that this can be done at the hearing when damages are assessed. That being so, there is no obvious benefit to entering judgment now and if Partington thinks otherwise, he can make an application in the usual way. The liability trial will be short and presumably will involve two witnesses, Partington and the independent witness Mr. Edwards. It seems unlikely that Mr. Forrett s evidence will advance the issue. The costs arguments 15. It is agreed that Davies is entitled to summary judgment and an order that Forrett pay his costs of bringing the claim against him. Otherwise, there is no agreement at all except that it is agreed that I should not seek to assess any costs summarily because

7 there are other extant orders for costs and there will have to be a detailed assessment of costs in any event. 16. Forrett submits that Davies should pay the costs of Partington and Southern Rock of the claim against them because he joined them and now seeks to discontinue the claim against them. Davies submits that Forrett should pay those costs because his behaviour and that of his lawyers necessitated their joinder. He failed to accept liability and sought to place all the blame on Partington for years after the accident which had the consequence that Davies reasonably joined Partington and Southern Rock who might, on that basis, be Article 75 insurers. Southern Rock therefore had an interest in the extent of Forrett and Partington s liability but were not contractually entitled to conduct litigation on behalf of Partington because they had denied any contractual liability to indemnify him. 17. Davies also seeks his costs of the Part 20 proceedings. These are very small because he was a party only for a short time and served a short Defence very shortly before the consent order brought them to an end. 18. Southern Rock seeks its costs of the Part 20 claim in which it succeeded against Davies and Partington. They both have assets from which a claim could ultimately be paid, because they both have valuable personal injury actions. However, Mr. Blakesley on behalf of Southern Rock would prefer to have his costs on an indemnity basis against Forrett either as a party or as a non-party under section 51 of the Senior Courts Act During the hearing he made an application to join Forrett to the Part 20 claim for the purposes of costs alone. Mr. Sephton QC fairly accepted that he was not prejudiced by this application which I therefore grant. 19. Mr. Plant on behalf of Partington raises the issue of his costs of defending the claim against him, which has been discontinued, and his costs of the Part 20 claim. Although a contention was at one stage advanced on behalf of Partington in those proceedings which failed, this was drafted by the solicitors for Forrett who did so for their own purposes entirely. They wanted to help him to recovery an indemnity from Southern Rock only because it would make the claim of Davies much cheaper for them. For this purpose they provided him with a pleading which he served which was later rapidly abandoned. Although he lost the Part 20 claim it would never have been necessary at all if Forrett had accepted his own liability and not meddled in the insurance arrangements of Partington in a way which did nobody any good because Southern Rock is not, was not, and never could have been, liable to meet Davies s claim in the circumstances. Decisions 20. I find that the conduct of Forrett and his insurers, Admiral, between 11 th May 2012 (when Forrett was convicted) and 11 th June 2015 when he admitted liability was designed to secure an advantage to which they were not entitled. It did so at risk of causing substantially more work and thus cost to themselves and all other parties. This is redolent of an era which had begun to fade into history even before 26 th April 1999 when the Civil Procedure Rules 1998 came into force. I have not set out above the detail of the lengthy correspondence between Sintons on behalf of Southern Rock and Horwich Farrelly on behalf of Forrett, although I have referred to the main dates. On one side the correspondence is appropriate throughout. Initially it is polite and

8 constructive but becomes more insistent as time wears on. Almost every letter refers to the mounting costs caused by the refusal of Admiral on behalf of Forrett to accept his obvious fault. In particular, by letter of 22 nd September 2014 Sintons pointed out the great advantage of dealing with apportionment between Partington and Forrett in Partington s claim against Forrett which was that Davies s costs of that issue would be avoided and they may involve a substantial success fee which would then attach to the quantum costs as well. No constructive answer was received. On 16 th January 2015, Sintons said If you persist in funding/indemnifying the defence to the Part 20/additional claim (if that is indeed the position).we will ask the court to make an order against Admiral in accordance with section 51 of the Senior Courts Act 1981 and the guidance given by the Court of Appeal in Symphony Group plc v. Hodgson [1993] 4 All ER In response to this series of correspondence, Horwich Farrelly said very little of substance. One thing which they did say is worth quoting. In the letter of 3 rd December 2014 (which I have referred to above as being entirely uninformative about its position on whether or not Southern Rock was liable to meet the claim against Partington) they said, of the proposed proceedings by Southern Rock for a declaration:- Such proceedings should be between [Southern Rock] and its insured and/or Mr. Partington. Of course, if such proceedings were to be commenced our client would have the right to be joined as a party to those proceedings on the basis that it has a significant financial interest in the outcome of the same. We can confirm that we are authorised to accept service of any declaratory proceedings. That in no way amounts to any admission of the validity of such proposed proceedings. 22. By a statement, supported by a Statement of Truth, Mr. Barrett on behalf of Forrett said, on 9 th March 2015, that there was, after all, no basis at all why Admiral should be joined into any such proceedings. As I have recorded, it was this second approach which prevailed at least until I allowed Forrett to be joined in these proceedings for the purposes of costs only. 23. Moving from the correspondence to the steps taken in the proceedings, it appears to me that the same approach continued to govern the conduct of Forrett s case, despite CPR 1.3. This imposes a duty on the parties to help the court to further the overriding objective. This is a duty and not an exhortation. Breach of duty is a significant matter which is directly relevant to costs issues. 24. The Defence of Forrett failed to set out his position clearly. The witness statement of Mr. Barrett refers to a serious and substantial dispute as to liability and as to the existence of insurance cover of Partington as late as 9 th March That is an unhelpful observation. Until the time of exchange of witness statements, Davies lawyers had not known what the basis of the denial in the Defence was. Perhaps, for example, the insurers had identified another red Vectra with a 54 plate which was in

9 the vicinity of the accident. Perhaps the independent witness had changed his opinion. On exchange of evidence, the position became clear. There was no serious or substantial dispute as to liability. 25. In contrast to the behaviour of Forrett, Davies and Southern Rock both conducted themselves sensibly, in my judgment. 26. Against the background I have described, I now move to my decisions. i) Davies is entitled to an order against Forrett for the payment of his costs of suing Partington and Southern Rock. It was reasonable for Davies to amend his claim to add Partington and Southern Rock when Forrett served a defence placing the whole blame on Partington. If Partington were not indemnified and played no part in the proceedings, Southern Rock would inevitably seek to be joined to address the liability issue, rather for the reasons set out by Forrett s solicitors in their letter of 3 rd December 2014 set out above. If he were indemnified, the joinder of his insurers would add little to the costs, but may save time. These steps were a reasonable response to the service of a false defence by Forrett which was false in that it failed to admit liability to Davies. ii) iii) There will be no order in respect of Partington s costs of the claim. Southern Rock and Partington were only joined by Davies because of Forrett s defence. But for that, they would not have been sued by Davies. This is not because Partington s position on liability has been vindicated at trial. On the contrary it seems likely to me that he will be found to have contributed to this accident by his own negligence in driving in quite a dangerous manner. He is not a successful defendant in the classic sense of that term used in Bullock v. London General Omnibus Co [1907] 1 KB 264, Sanderson v. Blyth Theatre Co [1903] 2 KB 533, Irvine v. Commissioner of Police of the Metropolis [2005] EWCA Civ 129, and Moon v. Garrett [2007] ICR 95. He served a defence denying primary liability which has yet to be tested and which is very likely to fail when the contributory negligence issue is tried in his own claim, and in contribution proceedings which may be brought by Forrett in respect of Davies claim. In these circumstances it seems to me that I ought not to make an order that his costs of the claim are paid by Forrett. The simplest and fairest way of dealing with those costs is to make no order. Southern Rock s costs of defending the proceedings brought by Davies will be paid by Forrett. This is because they were only brought in as a party because of uncertainty about their liability to meet the judgment if Partington were found liable to any extent. That uncertainty was manufactured by or on behalf of Partington, and was connived at by Forrett. I base this finding on the correspondence generally, but specifically the letter of 3 rd December 2014 referred to above and the fact that Horwich Farrelly drafted the pleading in which Partington advanced his doomed contentions on this issue. I also rely on Mr. Barrett s statement of 9 th March which asserts that there was a serious and substantial issue relating to Partington s cover. I am aware that Southern Rock served a defence which, among other things, denied fault on behalf of Partington. This denial is unlikely to be vindicated. However, the purpose of Admiral s interest in Southern Rock was to secure payment from Southern

10 Rock towards Davies s claim. That bid has failed comprehensively. Therefore I think it right to regard Southern Rock as a successful defendant and to make an order in the Sanderson form that its costs be paid by Forrett/Admiral. iv) Forrett will pay Southern Rock s costs of the Part 20 claim. There will be no order as to the costs of the Claimant and Partington in respect of those proceedings. a) Southern Rock is entitled to its costs of its Part 20 proceedings. The costs thrown away by the way in which the claim was first expressed have already been dealt with and my order does not interfere with any costs orders already made. Southern Rock was the successful party in those proceedings. This does not include the costs of joining Davies because I do not agree that that was necessary. A declaration against Partington alone would have sufficed. There will, therefore be no order of the costs of joining Davies to the Part 20 claim. Davies will not be ordered to pay the costs of those proceedings, but I will make no order also as to his costs of his involvement in them. At that time he had a contingent interest in Southern Rock s meeting his claim against Partington in case he failed altogether against Forrett. That is no doubt why he did not loudly declare that it was quite obvious that Southern Rock was under no contractual or statutory liability in that respect (as was the case). The inability to recover the costs of a defence which lacks that loud declaration is a modest cost sanction in that regard. b) The remaining issue is whether Southern Rock s costs should be paid by Partington or Forrett or both. Forrett/Admiral have been described as the puppet master pulling the strings and setting the cover dispute running. I will deal first with the costs application in relation to Forrett. c) Mr. Blakesley first submits that I should make an order because there is power under CPR Part 44 because although not a party to the Part 20 claim, Forrett was a party to the proceedings more generally defined. I reject this submission. I am dealing with the costs of the Part 20 action which is an additional claim which is to be treated as if it were a claim except in certain immaterial respects, see CPR 20.3(1). In this case there was an application to make Forrett a party to the Part 20 claim which was not pursued and I do not feel I can simply proceed as if it had succeeded, or as if it were unnecessary. d) The application can therefore only be made under section 51 SCA 1981 against a non-party. In my judgment, the closeness of Forrett to the Part 20 claim is relevant to the exercise of this discretion. Although not a party to it technically, he inspired it, contributed to it by instructing his solicitors to provide pleadings to Partington so as to assist him, and did this for his own financial benefit. It was all nonsense. It goes alongside his conduct of the very closely associated proceedings to which he was a party, and which I have described above. I have regard to Symphony Group Plc v. Hodgson [1994] QB

11 179 as explained in Dymocks Franchise Systems (NSW) PTY Ltd v. Todd and others 21 st July 2014, PC at paragraph 25. I give weight to the need for caution when making this exceptional form of order. Forrett, in the Part 20 action, was a funder to a limited extent providing some legal assistance as described. However, he was much more than that, and much less than that. He inspired the action for his own benefit and not to facilitate Partington s access to justice. He contributed to that access only to a limited degree. This is a fact specific jurisdiction in which the question ultimately is whether it is just to make the order. In reality, the cover dispute was sustained for the benefit of Forrett/Admiral and failed. It is just that an order to should be made against Forrett as a non-party. e) I have noted that Mr. Blakesley does not seek an order for his costs of the Part 20 action against Partington. Southern Rock succeeded in securing a declaration against Partington in the Part 20 claim. I do not, therefore, make an order for costs against Partington. That disposes of that issue. I would not, in any event, have wished to make an order which imposed any liability on Partington in respect of these costs without full information from Forrett about the extent to which his solicitors became involved in the cover dispute. I do not have enough information to make a decision as between the puppet and the puppet master. In those circumstances I am content not to make any order against Partington because no application for any such order has been made. 27. I decline to order any costs to be paid on the indemnity basis in this case. The conduct issues relied upon have been material in deciding what orders for costs to make against Forrett and there would be element of double recovery in giving effect to those factors not only in deciding whether to make an order but also on what basis.

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