Groupama Insurance Company Ltd v Overseas Partners Re Ltd & Anor

Costs should reflect the justice of the case and the parties’ responsibility for the litigation. Where a party’s unauthorised alteration of a document caused proceedings to be brought, that party may be ordered to bear its own costs even if the claim against it failed. The successful claimant may recover its costs from the defendant who lost the principal issue and may also recover costs relating to a subsidiary issue where that issue occupied little court time and a split order would be unjustified. A Bullock order should not be made merely because a liable party is in run-off and resident abroad; evidence of an enforcement or solvency problem is required.

Following the determination of the substantive dispute, the court considered the appropriate costs order between Groupama Insurance Company Ltd, Overseas Partners Re Ltd and Aon Limited. The proceedings had involved an entitlement issue, on which Groupama succeeded against Overseas Partners, and an alteration issue concerning Aon’s unauthorised alteration of a fax. Although the alteration did not affect the substantive outcome, the court had found that it should not have been made. The parties disputed responsibility for the costs and whether a Bullock order was appropriate because Overseas Partners was resident in Bermuda and in run-off.

1. Costs discretion. The costs order had to recognise that Aon’s unauthorised alteration of the fax, after it had been seen and noted by the underwriter and contrary to accepted practice, caused the proceedings to be brought. Groupama was entitled to join Aon once the alteration became relevant to Overseas Partners’ defence.
2. Aon’s costs. Aon was to bear its own costs. Its conduct had caused the litigation, and it could not complain that it had been joined as a defendant, notwithstanding that the claim against it failed on the substantive entitlement issue.
3. Overseas Partners’ costs liability. Overseas Partners was to pay Groupama’s costs of the entitlement issue because it had lost that issue. It was also to pay Groupama’s costs of the alteration issue. The alteration was immaterial to the result, the issue occupied only a fraction of the court’s time, and dividing the costs would not reflect the justice of the case.
4. Bullock order. A Bullock order was refused. There was no evidence that enforcement of a costs order in Bermuda would present a problem, and the court would not infer such a problem merely from Overseas Partners’ residence in Bermuda or its being in run-off.
5. The final order was that Overseas Partners should bear Groupama’s costs of the action, including the costs of joining Aon, while Aon should bear its own costs.