Aercap Ireland Limited v AIG Europe SA & Anor

Representative proceedings are intended to include persons with the relevant interest, rather than exclude a person who wishes to represent its own interests. Where a party has a direct and significant financial interest in the litigation, it should ordinarily be joined, absent exceptional circumstances, if it genuinely wishes to conduct its own defence at its own risk as to costs. The applicant need not establish that existing representatives would inadequately present its case. The court may address duplication, delay and unnecessary cost through case-management directions.

Fidelis Insurance Ireland DAC applied to be joined as a third defendant in AerCap’s substantial insurance claim concerning aircraft and engines retained by Russian lessees. AerCap had brought the proceedings as a representative action against insurers subscribing to different sections of the policy. Fidelis subscribed to both sections and wished to conduct its own defence, including maintaining a consistent position across related litigation. AIG opposed joinder, arguing that Fidelis’s interests could be represented by existing defendants and relying on the approach in LB Holdings Intermediate 2 Ltd (In Administration) v Lehman Brothers Holdings Scottish LP 3 and Others. The central issue was whether Fidelis should be joined despite the representative structure and possible duplication.

1. Joinder granted. Fidelis was joined as the Third Defendant. It faced a direct and very substantial potential liability, was willing to accept enforcement of any judgment without the court’s permission, and accepted responsibility for its own costs if unsuccessful. No exceptional circumstances justified keeping it unwillingly represented by other parties.
2. The essential purpose of representative proceedings is to include, rather than exclude, a person who is ready and willing to appear to represent its own interests at its own risk as to costs. Accordingly, where a party has a direct and significant financial interest, it should ordinarily be permitted to conduct its own defence.
3. The requirements of CPR r. 19.2(2)(a) and (b) were satisfied. Fidelis could assist the court in resolving the matters in dispute by putting its position before the court, and there were issues between Fidelis and AerCap which it was desirable to resolve with Fidelis joined. The application was also sustainable, if necessary, under CPR r. 19.6. The objection that the wrong rule had been used was technical and lacked substance.
4. Fidelis did not have to show at the joinder stage that its position could not adequately be advanced by existing representatives. A bona fide desire to conduct its own case with its own lawyers was sufficient. That desire was neither irrational nor artificial, particularly given the difficulties where representation is unwilling, the absence of shared privileged material, and legitimate concerns arising from related proceedings in the United States.
5. The test suggested from LB Holdings, asking what the proposed party could bring to the proceedings without imposing unnecessary, unfair or disproportionate burdens, was not apt to a case where the claimant already sought a binding determination of substantial liability against the applicant. In any event, Fidelis had a sufficiently differentiated perspective to justify joinder.
6. The court would control unnecessary duplication of evidence, submissions and costs through case management. Further directions concerning Fidelis’s participation were to be agreed or determined at a later case-management hearing.