Southern Rock Insurance Company Ltd v Brightside Group Ltd & Anor

This is an application to transfer three related actions from their current venue in the Bristol District Registry of the Chancery Division of the High Court to the Commercial Court in London. The applicants are companies in a group called the Brightside Group ("Brightside"). The respondents are also companies in a group which can conveniently be referred to as “Southern Rock”.

As I indicated to Mr Picken QC, who appears for Brightside, at the outset of the hearing, it seems to me that the application involves or elides two questions. One is the question of whether Bristol or London is the more suitable place for the litigation to be tried. The other is whether it should proceed in the Chancery Division or in the Commercial Court. It does not seem to me that I should take account in making my decision today of the relative advantages and disadvantages of London and Bristol, at least insofar as those are said to favour London. That is because there is nothing to prevent the proceedings from being moved from Bristol to London whilst remaining in the Chancery Division. Therefore, showing that London is a more appropriate venue, if that be the case, would not in itself be a reason why the proceedings should be transferred to the Commercial Court because a trial in London could perfectly well take place with the proceedings remaining in the Division in which they have been commenced. I therefore propose to focus on the question of whether the Chancery Division or the Commercial Court is the more suitable venue.

Mr Picken has shown me authorities which include, in particular, a decision of Akenhead J in the case of National Amusements (UK) Limited v White City (Shepherds Bush) Limited Partnership [2010] 1 WLR 1181, and which indicate that a more flexible test is now to be applied than the test applicable before the Civil Procedure Rules came into force and which is reflected in some of the older cases. Essentially the relevant test seems to me to be whether it appears that the Commercial Court would be a significantly more suitable court for the trial of the proceedings than the Chancery Division of the High Court. I include the word "significantly" not only because that reflects Akenhead J's formulation, but also because as a matter of common sense it seems to me that if the factors are fairly closely balanced the proceedings should be left where they are - both because one does not want to encourage arguments about transfer which are going to depend on questions of fine balance, and secondly because there would be some disruption and cost involved in a transfer so that if the question is finely balanced, overall convenience favours maintaining the status quo.

In deciding which is the more suitable court, by far the most important consideration, as it seems to me, is the subject matter of the proceedings and whether there are issues involved which would particularly benefit from the experience and expertise of judges in this court as compared with that of judges in the Chancery Division. I accept that I can take into account other matters, such as relative expedition and cost insofar as those are material; but the primary focus, as I see it, must be on the subject matter of the case.

There are three actions, as I mentioned. The first, which has been referred to as the “intellectual property claim”, was issued on 9 May 2014. The essential dispute in that action is whether Brightside, which entered into a contract with Southern Rock to acquire part of its business of selling insurance policies, was entitled to use certain intellectual property and confidential information only in relation to certain limited types of motor insurance business, or whether it was entitled to use that information more widely. If the subject matter of that dispute has greater affinity with either one place or the other, it seems to me that it is with the Chancery Division. I accept that the nature of the intellectual property involved is not one of a specialist nature which would require the case to be dealt with in that Division. But there is certainly nothing in that action which could be said to make it more suitable for the Commercial Court. If anything, as I say, it seems to me that the opposite is the case.

The main action on which Mr Picken founds his application for transfer is the second one commenced in time, on 30 May 2014, which has been referred to as the “money claim”. This claim has various components but the main centre of the dispute, as I understand it, is an allegation that, in writing insurance business as, I think, an agent, Brightside failed to comply with various underwriting terms and conditions with the result that policies were issued which have resulted in liabilities to Southern Rock which, it is alleged, should not have been incurred. These were motor insurance policies. The terms and conditions with which Brightside allegedly did not comply specified various processes which had to be followed, including checks about the driving and criminal history of the applicant for insurance and other matters of that kind. There is also within that action a counterclaim which includes allegations of misuse of confidential information and improper solicitation of employees. I will come back to the money claim in a moment.

The third claim, commenced last in time, has been referred to the “Panacea claim”. Panacea is a company in the Brightside Group. That claim was in fact issued by Panacea in the Bristol District Registry of the Chancery Division, although Brightside are now applying to have this claim transferred from there along with the other two claims. The Panacea claim involves a dispute under a trading agreement entered into between a company in each group under which it was agreed that Panacea would provide finance to customers. My understanding is that customers were offered, in effect, loans to assist them to pay the premium under motor insurance policies and there was an agreement under which Panacea would lend that money and there would be a split in the profits received from making those loans. There is a dispute between the parties as to whether that money has been properly divided. There is absolutely nothing in that last case, as far as I can see, which could be said to make it more suitable for trial in this court than in the Chancery Division.

I do not understand Mr Picken to rest his application on that action. The main pivot of his argument is the money claim which, he says, is set in an insurance context. It involves a dispute between brokers and underwriters and would benefit, he submits, from a trial in the Commercial Court where the judges have a great deal of experience in dealing with insurance matters.

I accept that the context of the claim is the insurance industry. However, it is not a part of the insurance industry which, as it seems to me, is particularly within the specialist province of the Commercial Court except insofar as insurance as a whole can be said to be. It does not involve areas of commercial insurance or reinsurance where specialist knowledge is particularly beneficial. It involves the selling of what one may describe as common or garden motor insurance policies with which any judge or lawyer is likely to be reasonably familiar. What is more, it does not appear from the examples which Mr Picken showed me of the issues arising in the action that there is any particular issue which requires specialist insurance knowledge. Rather, it appears from my impression of the pleadings that the issues are really about what was agreed as a matter of interpretation of the relevant agreements, and then a factual dispute about whether those agreements were in fact operated or not. Insofar as there are questions as to whether the underwriting guidelines were followed, in the sense of proper processes being followed before policies were issued and proper checks being made, those appear to me to be purely factual questions which do not require any element of specialist knowledge.

Mr Picken took me as an example - which I hope I may not unfairly assume to be, if not his best point, at least one of his best points to show why specialist knowledge might be required - to paragraph 35 of the defence and counterclaim in the money claim. He pointed out that there is an issue raised in that paragraph about whether certain payments, described as "additional moral hazard premiums", were or were not properly accounted for and whether they should be characterised as penalties imposed on a policyholder. The nature of those premiums I understand to be that if it was discovered that a person who applied for motor insurance had made a misrepresentation or failed to disclose a relevant fact about their motoring history or other relevant circumstances, then that person was meant to have applied to them when calculating the premium an additional sum to reflect the additional risk posed by the discovery that that person had provided false information.

The dispute, so far as I can tell, seems essentially to be one about the interpretation of the agreement and how the agreement was actually applied. There does not seem to me to be anything in the concept of an additional moral hazard premium which is other than entirely straightforward or which would benefit from the application of any specialist commercial experience and knowledge.

Looking at the matter overall, I am not persuaded that the subject matter of these actions is such as to make this court a significantly more suitable venue than the Chancery Division. No doubt if the actions had been commenced in this court, the court would be unlikely to have sought to expel them, but there is these days a considerable overlap in some areas of business between the Chancery Division and the Commercial Court and there are cases which may very properly and equally well be tried in either place. These claims seem to me to fall fairly and squarely within that area of overlap. Indeed, I would go further and say that, if they had been brought in the general Queen's Bench Division, I would also find it difficult to see any reason why they should not have proceeded there as a further alternative.

The additional factors on which Mr Picken sought to rely were, first, an earlier trial if the action were moved to the Commercial Court. That could only be a relatively minor factor and it certainly cannot be a reason to move from one court to another simply that an earlier trial date can be obtained - otherwise there would be constant manoeuvring around between courts as and when listing positions changed.

The further matters relied on all, I think, related to the relative convenience of Bristol and London and are therefore not, as I explained, reasons which I think it right for me to take into account. If it be the case that London is the appropriate forum, then that would be a matter to be addressed within the Chancery Division and not by the application made to this court.

For those reasons I dismiss the application.