Lumbermens Mutual Casualty Comp v Bovis Lend Lease Ltd

Whether proceedings should remain in the Commercial Court depends on the overriding objective and the structure of the litigation as a whole. The court should balance the importance and specialist nature of issues within its expertise against the suitability of another specialist court for the remaining issues, together with expedition, fairness, complexity, cost and allocation of court resources. Where core Commercial Court issues may determine whether a substantial construction dispute needs to be tried at all, that factor may justify retaining the proceedings. The court may manage the case by determining those issues first and leave open a later application to transfer any residual issues.

The claimant applied for proceedings concerning insurance issues and an underlying building-contract dispute to be transferred from the Commercial Court to the Technology and Construction Court. The insurance issues included the ascertainment of liability under a liability policy and breach of warranty. The underlying dispute concerned the liability of Bovis and Braehead to one another, an issue more typical of the Technology and Construction Court.

The court had to decide whether the presence of the construction issues made retention in the Commercial Court inappropriate, having regard to the relative expertise of the courts, the likely duration of the proceedings, trial availability and the importance of the insurance issues.

Application refused. The proceedings were retained in the Commercial Court.

1. The question whether proceedings are inappropriate for retention in the Commercial Court must be approached by reference to the overriding objective in the CPR. Relevant considerations include the amount involved, the importance and complexity of the case, expedition and fairness, the appropriate use of court resources, and the relative expertise of the courts.

2. The court should ordinarily retain matters raising legal or construction issues, or factual issues peculiarly within the Commercial Court’s province, where those are core issues. Transfer may nevertheless be appropriate where other issues so strongly demand determination by another court that they outweigh the reasons for retention. This requires a balancing exercise based on the real structure of the litigation.

3. Here, the ascertainment and breach-of-warranty issues were fundamental. If determined in one way, they would make it unnecessary to try the underlying building-contract liability dispute. Their importance, particularly the wider insurance significance of the ascertainment issue, outweighed the fact that a continuous trial would largely concern matters more suited to the Technology and Construction Court.

4. The appropriate case-management course was to determine the insurance issues first in a short trial during 2004. If residual construction issues remained, either party could later apply for transfer, although the court contemplated managing those issues within the Commercial Court.