Greene Wood & McLean LLP v Templeton Insurance Ltd
| Jurisdiction | England & Wales |
| Judge | Longmore,Sir Anthony Clarke MR,Hooper L JJ. |
| Judgment Date | 12 February 2009 |
| Neutral Citation | [2009] EWCA Civ 65 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2008/1871 & A3/2008/18752008 FOLIO 309 |
| Date | 12 February 2009 |
[2009] EWCA Civ 65
Before : The Right Honourable The Master of The Rolls
The Right Honourable Lord Justice Longmore
And
The Right Honourable Lord Justice Hooper
Case No: A3/2008/1871 & A3/2008/18752008 FOLIO 309
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
THE HONOURABLE MR JUSTICE TEARE
Mr Ronald Walker QC (instructed by Cameron McKenna LLP) for Greene Wood & McLean Solicitors
Mr Derek Sweeting QC (instructed by Manches LLP) for the Insurers
Hearing dates : 19 th January 2009
This litigation is a by-product of the claims brought by miners in respect of chronic obstructive pulmonary disease and vibration white finger. After liability had been established, the Department of Trade and Industry (“the DTI”) set up compensation schemes for the miners. Claims under those schemes were advanced with the assistance of the miners' unions. In some cases the unions entered into agreements with their members pursuant to which sums should be, and were, deducted from their compensation, notwithstanding the fact that the DTI had agreed to pay the miners' costs. Solicitors for the miners also made similar agreements and/or made deductions in their own favour. The legality of those arrangements has been challenged and some or all of the solicitors are facing disciplinary proceedings the outcome of which remains to be resolved.
The claimant solicitors (“GWM”) assumed the conduct of the proceedings on behalf of the miners against the unions and the miners' former solicitors. For reasons that seemed good to them GWM applied to the court to make a Group Litigation Order (“GLO”) which would bind at any rate those solicitors and those unions which were named as respondents to the application. That application was rejected by Sir Michael Turner on 18 th May 2006 partly on the basis that such an order would be pointless if some unions and some solicitors were not to be bound by the result, partly on the basis that it was unclear whether the proposed respondents' costs would, if they were successful, be met by After the Event (“ATE”) insurance and for many other reasons also. There is no doubt, however, that ATE insurance, written by Templeton Insurance Ltd (“Templeton”), was available for the GLO application itself. These proceedings relate to that ATE insurance which covered not merely the respondents' costs if the claimants lost but also claimants' “own disbursements”.
The costs of the application for the GLO were considerable and nominally fell to be paid by the miners who were the nominal applicants for the order. Not unnaturally GWM have settled any potential claim which the miners might have against them and have paid to the respondents to the GLO application the costs incurred by those respondents. GWM now assert that they have only paid what Templeton ought to have paid under the ATE insurance in the event of the GLO application failing. GWM have therefore sought to sue the insurers in the current proposed action on the basis (1) that the insurers directly promised GWM that they would meet valid claims under the policy or (2) that GWM themselves were liable to the miners as nominal claimants to pay the costs of the respondents to the GLO application as well as relevant disbursements but Templeton were also liable to pay those costs as ATE insurers. GWM claim that both Templeton and they (GWM) are thus “liable for the same damage” and GWM are entitled to seek a contribution (which they say should be a 100% contribution) from the ATE insurers pursuant to the Civil Liability (Contribution) Act 1978.
Since Templeton are incorporated in the Isle of Man, GWM need the permission of the court to serve them out of the jurisdiction. For this purpose they have asserted that the insurers are liable to them under a contract made with them which is governed by English law or, for the purpose of their contribution claim, that the insurers' liability arises in connection with a contract which is governed by English law, namely the ATE policy. It is said that the claim therefore comes within CPR 6.20(5)(c). Templeton say that there is no arguable case of a contract made between GWM and themselves and that it is not sufficient for the purposes of CPR 6.20(5)(c) that relief is sought in connection with a contract other than a contract made between the parties to the proposed litigation, which the ATE policy was not. Templeton also say that it is not arguable that they and GWM are liable for the same damage since a liability under a contract to the nominal applicants for the GLO is different from a liability to those applicants under the ATE policy.
The judge upheld Templeton's assertions in relation to the contract allegedly made between them and GWM, but decided that the claim for contribution was within CPR 6.20(5)(c) and that, if there were liability, it was arguably liability for the same damage. He therefore refused to set aside the initial order giving permission to serve the insurers out of the jurisdiction in respect of the contribution claim. He did, however, set aside the claim relying on a direct contract between GWM and the insurers. Both GWM and the insurers now appeal.
GWM's Contract Claim
It is convenient to begin with the claim in contract. CPR 6.20(5)(c) provides
“…. a claim form may be served out of the jurisdiction with the permission of the court if
(5) a claim is made in respect of a contract where the contract
(c) is governed by English law.”
GWM assert that they have a contract directly with Templeton which arose out of the negotiations which took place in June 2005 between Mr Edwards, a partner in GWM and Mr Brunswick, Templeton's managing director. Mr Edwards asked if Templeton would be interested in providing ATE insurance for the coal mining cases in which he was or would be instructed. Mr Brunswick agreed in principle to do so and instructed his underwriting manager Mr Maule to agree terms. Mr Edwards then prepared a document to be used for miners who made conditional fee agreements (“CFAs”) with GWM. This document was shown to and discussed with Mr Maule who suggested at least one amendment. It was headed
“MINEWORKERS' Group action
…..
The GWM Guarantee to clients”
and relevantly provided:-
“No win, no fee, no risk, no cost!;
We, Greene Wood & McLean LLP confirm to our clients that we will handle their claims in relation to the above matter on the basis that ….
2) We have obtained a policy of After The Event Litigation Expense Insurance for our clients underwritten by Templeton Insurance Limited a regulated insurer of Douglas Isle of Man;
3) The policy will cover adverse costs, own disbursements and the insurance premium … Below I set out what the costs implications are – win or lose ……
b) Lose…. ii) Disbursements – these are recoverable from the insurance policy … iv) Adverse costs – this is recoverable from the insurance policy.”
Paragraph 8 of GWM's Particular of Claim then asserts
“The above document was submitted in draft to Mr Maule who approved it subject to an amendment suggested by him (which was at paragraph 3(a)(iii) of the document). Having approved the documentation Mr Maule authorised the claimant, on behalf of the defendant, to enter into agreements with the miners whereby they became parties to the policy to be issued by the defendants.”
The judge accepted that this paragraph raised a serious issue to be tried namely whether Mr Maule had entered into a binding and enforceable contract to authorise GWM to enter into agreements with the miners whereby they would become parties to the ATE policy to be issued by Templeton which would then bind Templeton to meet valid claims under the policy. That was sufficient for the jurisdictional gateway of CPR 6.20(5)(c) since such a contract would be governed by English law just like the ATE policy itself.
I do not understand Templeton to challenge the claim thus far. What, however, Templeton do say (and the judge found) is that there is no arguable breach of this contract. GWM assert that it was an implied term of the agreement (by which they were authorised to make the miners parties to the ATE policy for the purpose of proceeding with the GLO application) that Templeton would meet valid claims under the policy. They then further assert that Templeton have, in breach of that implied term, failed to meet the miners valid claim for the costs of the respondents to the GLO application and “own disbursements” and that they (GWM) have, therefore, had to meet those costs and expenses themselves which they are now entitled to recover in their own name pursuant to the implied term in the agency contract made with Templeton.
The question therefore is: is there a serious issue to be tried whether the suggested term (that Templeton would meet claims under the policy) should be implied into the contract made between Templeton and GWM? The judge held that that was not a seriously arguable proposition. He asked whether it was necessary to imply such a term and decided it was not because
“the Claimant was enabled to give its guarantee to the miners by the defendant's agreement that the miners...
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