Round-up of recent litigation cases - November 2019

Non-party costs orders

The Supreme Court considered the exercise of jurisdiction to make a non-party costs order against an insurer under section 51 of the Senior Courts Act 1981.  Such an order may be appropriate where the insurer either became the real defendant in relation to an insured claim, or intermeddled in an uninsured claim.  A liability insurer’s contractual obligations and rights may make liability as an intermeddler very hard to establish. In this instance, the liability insurer Travelers had not intermeddled in the uninsured claims and the order against them could not stand (Travelers Insurance Company Ltd v XYZ).

Payment on account and Part 36 offers

The court has jurisdiction to order an interim payment on account of costs pursuant to CPR 44.2(8) where a Part 36 offer is accepted within the relevant period. The fact that the costs order in these circumstances is deemed to be made under CPR 44.9 and is not made by a judge is irrelevant - the rationale for ordering a payment on account of costs is the same whether or not the order for costs is deemed to have been made.  Although CPR 36 is described as a self-contained procedural code, it contains nothing to suggest that all costs consequences of accepting a Part 36 offer are to be found within CPR 36 (Global Assets Advisory Services Ltd v Grandlane Developments Ltd).

Mixed claims and QOCS

Qualified one way costs shifting allows a claimant to pursue a personal injury claim with no risk of an adverse costs liability to the defendant in the event that the claim fails. The mixed claim QOCS exception under CPR 44.16(2)(b) applies where a claim for damages for personal injury is only one of the claims being made in the proceedings. QOCS does not apply automatically to mixed claims. When exercising its costs discretion, the court should be careful not to encourage the “tacking on” of personal injury claims to other types of claim (Brown v Commissioner of Police of the Metropolis – see our briefing).

Privilege and the iniquity exception

The Court of Appeal reversed the decision below applying the iniquity exception to an email containing legal advice. The judge read the email as advising that a genuine redundancy exercise could be used as a cloak to dismiss the claimant to avoid difficulties with his employment which he said were related to his disability. The Court of Appeal disagreed – the email contained the sort of advice employment lawyers give "day in, day out" in cases where an employer wishes to consider an employee who is thought to be underperforming for redundancy. The email was privileged and could not be relied upon by the claimant employee (Curless v Shell International Ltd).

Privilege and dissolved companies

The Court of Appeal has confirmed that legal advice privilege is absolute unless it is waived or overridden by statute. Privilege attaches to a document or communication at the time it is made and is more than just a personal right to assert a refusal to produce the documents in question. It does not cease on the death of a living person, nor does it on the dissolution of a company. The fact that there is no one who can waive privilege on behalf of the dissolved company does not matter since the policy underlying legal advice privilege contemplates that the client's communications will never be revealed. There is no exception to the principle "once privileged, always privileged"
 (Addlesee v Dentons Europe LLP).