Davies v Forrett & Ors

In a costs dispute, the court may take account of a party’s failure to clarify its position where that conduct causes unnecessary litigation and expense. A defendant who creates uncertainty by advancing an unclear or misleading defence may be ordered to pay the costs of parties joined as a reasonable response.

A party joined as a defendant is not automatically entitled to its costs merely because the claim against it is discontinued. The court must assess whether it is a successful defendant in substance. A non-party costs order under section 51 of the Senior Courts Act 1981 is fact-sensitive and turns ultimately on whether it is just to make the order. The court should exercise that exceptional jurisdiction with caution.

Daniel Davies, seriously injured as a passenger in a road accident, brought proceedings against Thomas Forrett, Ryan Partington and Southern Rock Insurance Company Ltd. Forrett’s defence placed the blame on Partington but did not clearly state the basis on which liability was denied. Davies consequently joined Partington and Southern Rock, whose potential liability depended on the insurance position and on section 151 of the Road Traffic Act 1988.

Southern Rock brought Part 20 proceedings seeking a declaration that it owed no liability under the policy or section 151. The declaration was granted by consent. Forrett later admitted liability to Davies, who discontinued against Partington and Southern Rock. The issue was how the costs of the main claim and Part 20 proceedings should be allocated.

1. Costs caused by unclear conduct. Forrett’s conduct and that of his insurers, including the failure to admit obvious liability and the maintenance of an unclear position on insurance cover, was designed to obtain an advantage and caused substantial additional work. Under CPR 1.3, the parties’ duty to help the court further the overriding objective is a duty, and breach of it is directly relevant to costs.
2. Costs of the additional defendants. It was reasonable for Davies to join Partington and Southern Rock after receiving a defence placing the whole blame on Partington. Forrett was ordered to pay Davies’s costs of suing them. No order was made for Partington’s costs because he was not a successful defendant in substance: his denial of primary liability remained untested and was likely to fail when contributory negligence was considered.
3. Southern Rock’s costs. Southern Rock was treated as a successful defendant in the main claim and Forrett was ordered to pay its costs. The uncertainty about Southern Rock’s liability had been manufactured or tolerated for Forrett’s benefit, and its attempt to obtain contribution towards Davies’s claim had failed.
4. Part 20 proceedings. Southern Rock succeeded in obtaining its declaration. Forrett was ordered to pay its costs as a non-party under section 51 of the Senior Courts Act 1981. Although he was not technically a party, he had inspired and materially supported the proceedings for his own financial benefit. The jurisdiction was fact-specific, exceptional and governed ultimately by whether the order was just. No order was made against Partington or Davies. The court rejected reliance on CPR Part 44 because it was dealing with the costs of the Part 20 claim, which CPR 20.3(1) treated as a claim.
5. No costs were ordered on the indemnity basis, because the conduct relied upon had already influenced the decision whether to make costs orders and a further enhancement would risk double recovery.

First-instance costs judgment. The judgment does not state any appellate history.