Civil procedure: Non-party costs orders and credit hire disputes

In Kindertons Ltd v (1) Georgina Murtagh (2) Esure Providers Ltd [2024] EWHC 471 (KB), Turner J thought-about a problem to a non-party prices order (NPCO). The trial choose discovered that the damages claimed by the claimant in her private damage matter had not been brought about within the accident and that the claimant and her husband had been basically dishonest. The claimant disappeared leaving the prices order unpaid. The insurer efficiently utilized for an NPCO towards the credit score rent firm.

On attraction to the Excessive Courtroom, the appellant challenged the NPCO arguing that: (i) it didn’t profit from the declare; (ii) it didn’t have the facility to regulate the litigation; and (iii) the respondent couldn’t show that the appellant had brought about prices to be incurred. Turner J dismissed the attraction and famous that, in widespread with credit score rent firms usually, the entire objective of the appellant offering credit score rent services was to make a business revenue out of the shopper’s authorized declare, and the availability of such services was able to offering a good and helpful mitigation of the difficulties which might be confronted by claimants unable to afford to pay the decrease Fundamental Price Rent up entrance (Amjad v UK Insurance coverage Ltd [2023] EWHC 2832 (KB)). He additionally discovered that the appellants stood to realize considerably from the declare introduced within the identify of the claimant and, due to this fact, had a really sturdy monetary stake within the litigation. The appellant additionally had a excessive diploma of management over the litigation (Deutsche Financial institution AG v Sebastian Holdings [2016] 4 WLR 17).

Turner J rejected the appellant’s argument that it was vital for the respondents to show the causation of prices on a ‘however for’ foundation, which was now not a vital pre-condition to an order for prices towards a non-party (see Complete Spares v Antares [2006] EWHC 1537 (Ch); Turvill v Fowl [2016] EWCA Civ 703). The appellant relied closely on the Supreme Courtroom’s resolution in XYZ v Travellers Insurance coverage Co Ltd [2019] 1 W.L.R. 6075 by which Lord Briggs thought-about the relevance of causation in a declare for an NPCO towards legal responsibility insurers. Turner J famous that Lord Briggs’ feedback demonstrated that he was cautious to circumscribe the scope of his observations within the following phrases:

‘30. It’s not the aim of this judgment comprehensively to reassess these usually relevant ideas. It might be (and I’m reluctantly ready to imagine however with out deciding) that they are surely restricted, because the Courtroom of Attraction thought within the current case, to the dual issues of exceptionality and justice. The identical normal conclusion is to be discovered within the Deutsche Financial institution case. That mentioned, I share all Lord Reed DPSC’s issues as to the shortage of content material, precept or precision within the idea of exceptionality as a helpful check. Moderately, that is an event to contemplate, in additional granular element, the ideas which ought to use to that distinct a part of the broad spectrum of non-parties occupied by legal responsibility insurers. Whereas doing so it will likely be acceptable to make some temporary observations concerning the affect of these normal ideas within the legal responsibility insurance coverage context, and particularly concerning the function performed by the presence or absence of a causative hyperlink between the conduct of the non-party relied upon and the prices which the candidates incurred which they search to recuperate towards the non-party beneath part 51.’

Turner J defined that Lord Briggs ‘was not intending to put down any normal steerage on causation relevant to all NPCO functions’. Turner J distinguished the choice in XYZ on the grounds that it involved legal responsibility insurance coverage, the place the insurer is often ‘an involuntary moderately than voluntary funder of litigation’ and that it involved ‘intermeddling’, moderately than the ‘actual social gathering’ check that utilized in Kindertons.

The choice serves as a useful reminder of the ideas governing NPCOs and the related elements which the courts will think about in credit score rent disputes. Finally, it will likely be a query of discretion which have to be exercised justly. Because the Courtroom of Attraction put it in Deutsche Financial institution AG, ‘the one immutable precept [when considering an application for an NPCO] is that the discretion have to be exercised justly… for the reason that resolution includes an train of discretion, restricted help is prone to be gained from the quotation of different choices at first occasion by which judges have or haven’t granted an order of this type’.

Masood Ahmed is an affiliate professor of legislation on the College of Leicester and a member of the Legislation Society’s Dispute Decision Committee. Lal Akhter is director of Docket Stay and an unregistered barrister