AerCap Ireland Limited v AIG Europe SA & Ors (Russian Aircraft Lessor Policy Claims)

Judgment was handed down in these actions on 11 June 2025: [2025] EWHC 1430 (Comm) (‘the Judgment’).

Since the Judgment, DAE and Falcon have settled with all their respective insurers, and Merx has settled with its war risks insurers.

There remained certain issues between those parties who had not settled as to interest, costs and permission to appeal. I heard argument on those issues on 15-16 September 2025. On the issues relating to interest, I stated my conclusions during the hearing, and said that I would provide reasons for those conclusions in writing. In relation to costs I reserved my decision. In relation to the applications for permission to appeal, I gave my decision that permission to appeal should not be granted, and said that I would provide somewhat fuller reasons in writing. This judgment sets out my decisions on costs and gives reasons for my decisions on interest and permission to appeal.

There were issues in the AerCap and Genesis claims as to what interest should be awarded on the sums to which those claimants were found entitled as against their war risks insurers.

I will take AerCap first. There were three matters of dispute. First, as to what was the appropriate commencement date for an award of interest; second, the rate of pre-judgment interest; and third, whether any interest awarded should be simple or compound.

As to the start date, I was referred to the guidance given in the case of Quorum v Schramm (No. 2) [2002] 2 Lloyd’s Rep 72, which itself referred to what was said in BP Exploration Co. (Libya) Ltd v Hunt (No. 2) [1979] 1 WLR 783. Thomas J said this at [3]-[8]:

“3.

Although there is a considerable amount of authority on the question as to the date from which interest should run which was recently reviewed by Langley J in Kuwait Airways Corporation v Kuwait Insurance Co. [2000] LIRLR 678, the most helpful guidance is to be found in the judgment of Robert Goff J in BP Exploration Co. (Libya) Limited v Hunt (No 2) [1979] 1WLR 783. The passage at p 846, as Mr Justice Langley rightly observed, is not only a clear statement of principle but one which has stood the test of time and reconciled the applicable principles:

“…. interest will generally run from the date of accrual of the cause of action in respect of money then due or loss which then accrues; and in respect of loss which accrues at a date between accrual of the cause of action and judgment, from such date. For convenience, I shall refer to these dates compendiously as the “date of loss”, although I recognise that the term is not altogether appropriate in a case of restitution…..But the power to award interest is discretionary, and there is certainly no rule that interest will invariably run from the date of loss. It is no part of my task to attempt to define the circumstance in which the court will depart from the fundamental principle; indeed, since the discretion to award interest is unfettered, it would be improper to do so. There appear, however, to be three main groups of cases in which, in the exercise of its discretion, the court may depart from the fundamental principle. ”

4.

Robert Goff J then considered the three groups of cases. Only the first is relevant to this issue. He said:

“The first group of cases concerns the position of the defendant. The court may consider, in the light of all the circumstances, that his position was such that it would not be just to make the defendant pay interest from the date of loss. It may do so if, for example, the circumstances were such that the defendant neither knew, nor reasonably could have been expected to know, that the plaintiff was likely to make a claim, and so was in no position either to tender payment, or even to make provision for payment if the money should be found due. In such a case, the court may in its discretion only grant interest from the date of the plaintiff’s claim, or even from such a date as will allow reasonable investigation of the claim. Again, to quote from Lord Wilberforce’s speech in the Firestone case, at page 836:

“In a commercial setting, it would be proper to take account of the manner in which and the time at which persons acting honestly and reasonably would pay””

5.

Robert Goff J then concluded:

“The basic principle is, however, that interest will be awarded from the date of loss. Furthermore, the mere fact that it is impossible for the defendant to quantify the sum due until judgment has been given will not generally preclude such an award. Thus, in Admiralty, in collision cases where the ship is totally lost, interest has been held to run from the date of the loss (see eg The Berwickshire [1950] P.204 and Owners of Leisbosch Dredger v Owners of SS Edison [1933] A.C. 449, 468) and in the case of a salvage award, from the date of the rendering of the salvage services: see The Aldora [1975] Q.B. 748. There must have been many cases in the commercial court in which, although the quantum of damages was in doubt until the date of the judgment, interest was awarded from the date of loss.”

6.

I therefore turn to apply these principles to the present claim. The first question is to determine when the sum became due under the policy. As a matter of technical and legal analysis, I accept an insurer is in breach in failing to pay the assured the sum due under the policy at the date of the loss. I agree with the view of Mance J in Insurance Corporation of the Channel Islands v McHugh [1997] LIRLR 94 at 137, where he said that insurance contracts are treated in law as contracts to hold the insured harmless against liability or the loss insured against; therefore insurers are in the absence of contrary provision in breach of contract as soon as the insured liability or loss occurs.

7.

However, although the date of the loss is when the sum became due under the policy, it does not follow that the court awards interest in every case from the date of the loss. For example in the Popi M [1984] 2 Lloyd’s Rep 555 the assured put forward a claim on a basis substantially different to that which proved successful at trial. The trial judge (Bingham J) awarded interest from a period about 4 years and 4 months after the loss. The Court of Appeal awarded interest commencing 2 years after the date of the loss; Sir John Donaldson M.R. (with whom O’Connor LJ agreed) considered that the case was unusual and underwriters therefore needed time to make up their minds. May LJ, though not differing from the other judges in the result, expressed the view that although in most cases insurers would need to investigate claims, prima facie interest ought to be awarded from the date of the loss. Another example is McLean Enterprises v Ecclesiastical Insurance [1986] 2 Lloyd’s Rep 216, where interest was awarded by the trial judge (Staughton J) from a date some 5 weeks after the loss. In Kuwait Airways Corporation (to which I have referred) the loss occurred shortly after the invasion of Kuwait by Iraq on 2 August 1990, but interest was only awarded from 5 December 1990; the judge found that it was not clear that until 12 November 1990 that a claim in respect of loss of spares was being pursued and insurers needed a little time to appreciate that fact and consider the claim.

8.

The decisions to which I have referred are but examples common in the experience of the Commercial Court in relation to insurance claims in unusual cases or those that are not straightforward. In such cases, the court usually exercises its discretion on the basis it is proper to allow insurers some time to consider the claim. The time varies accordingly to the nature of the loss, the way the claim is presented and the circumstances that require investigation. In many cases the time may be quite short. The court will always have regard to the particular circumstances specific to that claim.

AerCap contended that interest should run from the date of loss, which I have found to have been 10 March 2022; alternatively from 29 April 2022, the date on which AerCap made a claim under its OPs; alternatively from 9 June 2022, when the Claim Form in AerCap’s LP claim was issued.

AerCap’s War Risks Insurers argued that none of these dates is appropriate. They contended that AerCap should not be entitled to any pre-judgment interest on the basis that AerCap’s primary case throughout the trial had been that the loss of the aircraft was due to an all risks peril, and thus War Risks Insurers had not deprived AerCap of the use of its money. Alternatively they contended that AerCap was not entitled to interest from the date of loss of the aircraft because AerCap did not at that point have a cause of action under its LP cover; and that the same applied as of 29 April 2022 and 9 June 2022.

As to 10 March 2022, I agree with War Risks Insurers that it is not appropriate to take this as the start date for interest. This is because I have found that it was necessary, in order for there to be a successful claim under the LP, that there should at least have been a claim made on the OP (paragraph 280 of the Judgment). Whether this means that, strictly, AerCap had no cause of action under the LP before such a claim was made is not something which I need to decide because I consider that, in any event, it would not be appropriate as a matter of discretion to award interest to run from before the date of such a claim.

AerCap, in the alternative, commended 29 April 2022 as the date from which interest should run on the basis that that was the date of a claim made on the OP insurers. War Risks Insurers responded to that by saying that the claim made on 29 April 2022 was a claim on the all risks section of the OPs, and against the all risks reinsurers of those policies, and not against the war risks section or war risks reinsurers. No claim under the war risks section of the OPs was made, even in the alternative, until 25 May 2023, when an amended Claim Form naming the OP war risks reinsurers was served.

The distinction which War Risks Insurers sought to draw as to the claim made on 29 April 2022 being only against all risks insurers and not against war risks OP insurers is not, as a matter of fact, an easy one. The OP insurances of AerCap were generally one policy with one (Russian) insurer. A claim on that policy made on the basis that there had been an all risks loss could have been met, had it been accepted that the loss was a war risks loss, by the insurer saying that cover was actually provided under the war risks, not the all risks section of the policy.

More generally, I do not accept that the contingency which I recognised in paragraph 280 of the Judgment is that there should have been a claim made under the correct section of the OP. That appears to me to introduce a requirement which I did not find to be implicit in the LP cover, and which I do not consider can be read into it.

I do not, however, accept that it is appropriate simply to take the date of 29 April 2022 as the start date for interest. As recognised in paragraph 8 of Quorum v Schramm (No. 2), the court usually exercises its discretion to allow insurers some time to consider their position after a loss. That should not in the present case, in my view, be a very extensive time. Given the nature of the insurance and the circumstances of the loss the insured could reasonably expect promptitude from insurers. In my judgment, therefore, it is appropriate to take the date of 9 June 2022 as the start date for the running of interest. That is a date which both gave the OP insurance some time to respond, and LP insurers a fair time since the emergence of the loss to have considered their position.

I reject War Risks Insurers’ contention that there should be no pre-judgment interest. I consider that War Risks Insurers have deprived AerCap of the use of its money on the simple basis that, since 9 June 2022, AerCap has been claiming in its action as against the War Risks Insurers the sums for which War Risks Insurers have been found liable. War Risks Insurers have failed to pay them, and have denied that they were liable to pay them. I would add that it would appear to me to be unjust for AerCap not to be entitled to claim interest from War Risks Insurers on the ground that its primary claim was that there had been an all risks loss. That does not alter the fact that AerCap has been held out of the sums which, as I have held, it was entitled to from War Risks Insurers.

The second area of dispute was as to the rate of pre-judgment interest which should be awarded.

AerCap claimed a rate of US Prime, given that its claim was for a dollar amount, and given the decision in Lonestar Communications Corp LLC v Kaye [2023] EWHC 732 (Comm).

For their part, War Risks Insurers contended that US Prime was too high a rate to award. The court’s task, they contended, was to choose a rate which is a realistic reflection of the cost of borrowing of the class of person(s) to which the claimant belongs; and that here it could be seen that AerCap’s borrowing costs were less than Prime. They relied on a spreadsheet which had been produced during the course of disclosure in lieu of production of the underlying documents, which tabulated the average interest rate of borrowing between January and September 2024 for each of the AerCap companies which had owned the aircraft in issue. This showed an average cost of borrowing of some 6%, or 2.5% less than US Prime at the relevant dates. War Risks Insurers contended that this was a reflection of AerCap’s size and unique characteristics as the world’s largest aircraft leasing company. The rate which the court should order was therefore Prime less 2.5%.

AerCap responded to this by saying that War Risks Insurers had not properly put forward a case that AerCap’s actual borrowing costs were lower than Prime. As to the spreadsheet, AerCap said that this had been prepared for the purpose of responding to a disclosure request showing the average costs of borrowing for the AerCap SPVs in the period January to September 2024. It did not seek to show AerCap’s cost of borrowing. Most of the rates shown were for internal group funding, not external funding. Furthermore, it is not apparent when the facilities, giving rise to these rates, were entered into, and whether the rates specified were fixed or floating. This was important because interest rates had risen sharply after March 2022 to mid-2024. These issues had not been explored because insurers had not pleaded that AerCap’s cost of borrowing was lower than Prime, nor had they pursued the matter during the trial, for example by putting any points to relevant AerCap witnesses.

It is helpful to recall what was said in Lonestar by Foxton J at [14] - [16]:

“[14] There are some contexts (for example which side of the road to drive on) when the existence of a clear default rule is important, even if there is much which can be said for both competing options. I am satisfied that the default interest rate for US$ awards in the Commercial Court going forward should be US Prime, irrespective of whether the claimant has a US place of operations or not and irrespective of whether the claim is a maritime claim or not. I have reached that conclusion for the following reasons:

i)

There are long-standing decisions of the Commercial Court which have referred to US Prime as a starting point for US$ awards: see [4]-[7]. That practice is referred to in Civil Procedure §16AI.2.

ii)

LIBOR is in the course of being discontinued.

iii)

LIBOR itself is an interbank rate, rather than a commercial borrowing rate.

iv)

The trend of the more recent authorities has been to favour the use of US Prime.

v)

A default rule would not achieve the requisite clarity if it did not apply to particular commercial sectors of indeterminate scope.

[15] There being no contrary evidence in this case, the starting point will be US Prime.

The uplift

[16] As its name indicates, US Prime is the rate offered by US banks to their most creditworthy business customers. In these circumstances, it would not be appropriate to have a default rule that there will always be an uplift over and above US Prime in an interest award. In some cases, even without evidence, it will be obvious from the general characteristics of the claimant that it would have to pay a higher rate to borrow US$ than a bank’s most creditworthy customers. In such cases, the court may well be persuaded to order interest at US Prime plus 1% or US Prime plus 2% for certain types of claimant. Higher uplifts than that are likely to require evidence to justify them.”

As Foxton J there said, US Prime is to be taken as a default interest rate. It represents the rate offered by US banks to their most creditworthy customers. It is recognised that there may be cases in which it will be appropriate to award interest at an uplift over Prime, because not all claimants are amongst the ‘most creditworthy customers’.

In light of the nature of Prime, and of the default position, it appears to me that if a defendant wishes to contend that the rate to be awarded on a US$ sum is less than Prime, on the basis that the actual borrowing costs of the claimant are less than those which would be paid by US banks’ ‘most creditworthy customers’, that would need to be put properly in issue by being pleaded. It would not be enough for the defendant, as War Risks Insurers did here, simply to deny that the claimant should recover interest at Prime. The result of its not being pleaded was that there was no proper exploration of whether there is a category of corporate borrowers who pay lower rates than US banks’ most creditworthy customers, and/or whether AerCap does so. The spreadsheet I have referred to was not an adequate substitute for such an exploration, not least because it left unanswered questions as to whether the internal funding costs there specified reflected what would have been external funding costs, and as to whether the rates specified were reflective of what would actually have been the borrowing costs if loan arrangements had been made during the relevant period.

Thus, the appropriate rate to take for pre-judgment interest is the default rate for US$ awards in the Commercial Court, namely US Prime.

As to post-judgment interest, and given that the sums awarded are in US dollars, it was, as I understood it, common ground that this should be at the same rate as is applied in relation to pre-judgment interest. Thus post-judgment interest should be at US Prime.

The final area of dispute in relation to interest was as to whether any award should be of simple or compound interest. This arose only in relation to AerCap. Genesis did not seek compound interest.

For AerCap it was submitted that interest awarded to it should be compounded annually. This was because compound interest reflected what AerCap’s actual borrowing costs would have been, had it borrowed the sum to which it was found to be entitled. Reliance was placed on what was said in Equitas Ltd v Walsham [2014] Lloyd’s Rep IR 398 at [123], and in particular Males J’s statements that ‘… it is impossible to borrow commercially on simple interest terms…’, and that ‘the law must recognise and give effect to this reality if it is to achieve a fair and just outcome when assessing financial loss.’ In line with that approach, AerCap should be able to recover, as damages, interest on a compound basis.

War Risks Insurers submitted that Males J’s approach had not been adopted in subsequent cases, and that in Sagicor Bank Jamaica Ltd v Seaton [2022] UKPC 48 the Privy Council had stated that the common law had not gone so far as to recognise that a claimant or plaintiff kept out of his or her money in a commercial context is as a norm entitled to claim and receive as damages for breach of contract interest on the withheld sums calculated by reference to the cost of borrowing such sums at a conventional rate without evidence from which such a loss can be inferred. They relied on the statement of the Board, at [34], that ‘there is no general practice that follows the approach in Equitas’, and that that approach is ‘not consistent with principle or with the speeches of the House of Lords in Sempra Metals.’

I accept that it is not the practice of the court, even in a commercial context, to award pre-judgment interest on a compound basis as damages without that being pleaded and proved. In my judgment, there was no adequate plea or proof by AerCap that its losses should be calculated by reference to the cost of borrowing on the basis of compound interest. Accordingly, I consider that the appropriate award of interest is of simple interest under s. 35A Senior Courts Act 1981.

I need add only this. If there is any force in War Risks Insurers’ complaint that US Prime may be too high a rate at which to award interest because of AerCap’s size and commercial position, then that would be counteracted by any under-compensation which might have arisen by reason of interest being only simple and not compound. As a matter of my discretion as to interest, an award of Prime on a simple basis appears to me to be just.

As to Genesis, its primary case was that interest should run from the date of loss, 10 March 2022. It contends that the ‘failed to respond’ contingency referred to in paragraph 470 of the Judgment does not defer the accrual of a cause of action until after there has been a claim on the OP policy and there has been a failure by OP insurers to pay or accept responsibility to pay that claim.

Whether or not Genesis is strictly right about the date of accrual of a cause of action or not, I do not consider that it is appropriate to award interest from before the date on which Genesis made a claim on its OP policy, which was 18 April 2023. Further, I consider that it is reasonable to allow a relatively short period after that date for LP insurers to give further consideration to their position. It should be relatively short, not only because War Risks Insurers will have been considering their position since March 2022, but also because Genesis had issued its proceedings in relation to its LP cover on 15 March 2023. In my view the appropriate date to take is a bit over a month from 18 April 2023, namely 20 May 2023.

Genesis, at the hearing, sought an award of pre-judgment interest at the rate of Prime plus 2%, the uplift said to reflect its smaller scale of aircraft leasing operations than those of AerCap and Merx.

For their part, War Risks Insurers contended that Genesis belonged to the class of major aircraft leasing companies; and that evidence of the rate at which this category of company could borrow was provided by Merx’s actual cost of borrowing, which was SOFR + 200 bps. SOFR + 200 bps has tracked US Prime but has consistently been 1.2% lower than Prime. Accordingly, Genesis should be awarded interest at Prime – 1.2%.

Neither Genesis’s case that it should recover more, nor insurers’ case that it should recover less, than US Prime was pleaded. There was no exploration during the trial of Genesis’s actual borrowing costs in the relevant period. It appears to me that the appropriate rate to take is, again, the default rate of US Prime.

There were extensive arguments as to the incidence of costs and other issues relating to costs. This was perhaps unsurprising given the very large sums claimed by different parties.

I will consider first the issues as to costs which arise in the context of the AerCap claim. There were seven principal points: (a) incidence of costs; (b) whether there should be liability on a joint or several basis; (c) the impact of settlements; (d) whether War Risks Insurers should bear any costs awarded in favour of HFW AR Insurers; (e) the rate of interest on costs; (f) the amount of any payment(s) on account; and (g) the position of Swiss Re.

Before examining these issues in turn, it is helpful to recall the parameters within which the court approaches issues of costs. Thus CPR r. 44.2 provides, in part:

“44.2

(1)

The court has discretion as to –

(a)

whether costs are payable by one party to another;

(b)

the amount of those costs; and

(c)

when they are to be paid.

(2)

If the court decides to make an order about costs –

(a)

the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b)

the court may make a different order.

...

(4)

In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –

(a)

the conduct of all the parties;

(b)

whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

(c)

any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.

(5)

The conduct of the parties includes –

(a)

conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;

(b)

whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(c)

the manner in which a party has pursued or defended its case or a particular allegation or issue;

(d)

whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim; and

(e)

whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution.

(6)

The orders which the court may make under this rule include an order that a party must pay –

(a)

a proportion of another party’s costs;

(b)

a stated amount in respect of another party’s costs;

(c)

costs from or until a certain date only;

(d)

costs incurred before proceedings have begun;

(e)

costs relating to particular steps taken in the proceedings;

(f)

costs relating only to a distinct part of the proceedings; and

(g)

interest on costs from or until a certain date, including a date before judgment.

(7)

Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead.

(8)

Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.

…”

Helpful also is the summary of the court’s approach given in Serious Fraud Office v Litigation Capital Ltd [2021] EWHC 2803 (Comm) at [29]-[30] by Foxton J:

“29.

There was no significant dispute as to the general principles relevant to liability for costs, which is not, perhaps, surprising because there is something in them for everyone. The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party (CPR r.44.2(2)), but the Court may make a different order having regard to all the circumstances. First instance judges have been warned against departing too readily from the starting point that the successful party gets its costs (Fox v Foundation Piling Ltd [2011] EWCA Civ 790, [2011] 6 Costs LR 961, [62],), although I accept that such orders are not to be described as exceptional.

30.

Further:

i)

There is no automatic rule that the costs of a successful party will be reduced because it lost on some issues, and it has been noted that in complex litigation, it is a rare party who succeeds on every point it argues (see e.g., Travellers' Casualty and Surety Co of Canada v Sun Life Assurance [2006] EWHC 2885 (Comm), [12] and F&C Alternative Investments (Holdings) Ltd v Barthelemy [2011] EWHC 2807 (Ch), [2012] Bus LR 891, [16]-[21],).

ii)

There are various factors which are likely to weigh in the balance when determining whether to make such an order, although these are inevitably matters of weight rather than independently determinative considerations. The more significant and self-contained the issue on which the successful party has lost, the more likely it is that some downwards costs adjustment for that failure is appropriate. Failure on an argument which was simply an alternative route to the same substantive relief as that obtained may provide a less compelling case for a downwards adjustment than (for example) a party who seeks to recover some further relief and fails. The unreasonableness of taking the unsuccessful point is also a relevant consideration, but that does not mean that an adjustment to the costs order to reflect the successful party's failure is only appropriate if it has acted unreasonably in relation to the points on which it lost. Similarly, the character of the point - for example an unsuccessful claim in fraud – may also weigh in favour of a reduced costs award to the successful party.

iii)

Where an issue-based (or, perhaps more accurately in the present context, issue-influenced) costs order is appropriate, a judge should hesitate before making an order by reference to the costs of the specific issue, as opposed to a proportionate reduction in the successful party's costs: see [23].

iv)

In those cases in which it is appropriate to depart from the general rule, a further issue arises as to whether the court should stop at depriving the successful party of part of its costs or go further and make the successful party pay part of the costs of the other party (R (Viridor Waste Management Ltd and ors) v Revenue and Customs Commissioners [2016] EWHC 2502 (Admin), [2016] 5 Costs LR 965, [7]). This will only be appropriate in a suitably exceptional case and is to be regarded as far from routine (ibid, [19] and Summit Property Ltd v Pitmans [2001] EWCA Civ 2020, [17]).

v)

While I was referred to no authority on this issue, it is frequently the case that a party raises an alternative case which the Court does not need to decide (and does not decide) because of the way in which other issues are determined. In those circumstances, unless the decision to pursue the alternative argument was unreasonable, the fact that there has been no decision on the merits of the point will not preclude the successful party from recovering those costs.”

In relation to the incidence of costs in the AerCap claim, the parties’ positions were as follows. AerCap’s primary position was that it was successful on ‘non-peril’ issues, and was entitled to its costs on those issues against all the Defendants, and that no Defendants were entitled to their costs of those issues from AerCap. AerCap contended that all Defendants should be jointly and severally liable for those costs. AerCap also contended, on the basis of an exercise of which Mr Oddy of Herbert Smith Freehills Kramer gave evidence, that only some 19% of AerCap’s costs were properly to be attributed to ‘peril’ issues, and that 81% were properly to be attributed to non-peril issues. AerCap contended that War Risks Insurers should be jointly and severally liable for its costs of peril issues. It further argued that any costs awarded to HFW AR Insurers and/or Chubb on peril issues should be the subject of a ‘Sanderson’ order (ie an order that the unsuccessful defendant, here the War Risks Insurers, should pay the costs of the successful defendant, here the HFW AR Insurers, directly to the successful defendant), alternatively a ‘Bullock’ order (ie an order that the costs payable by the claimant, here AerCap, to the successful defendant should be recoverable by the claimant from the unsuccessful defendant as part of the claimant’s costs in the proceedings).

For HFW AR Insurers it was submitted that they, having succeeded, should recover all their costs of the action from AerCap, alternatively from War Risks Insurers. They should not be liable for any costs to AerCap, including in relation to ‘non-peril’ issues.

For War Risks Insurers, it was accepted that they should be ordered to pay their ‘fair share’ of AerCap’s ‘non-peril’ costs, which, they contended, amounted to only some 30% of AerCap’s costs. As AerCap had proposed shared joint liability with AR Insurers for the costs of those issues, there should be a 50:50 split of those costs between War Risks Insurers and AR Insurers. As to HFW AR Insurers’ costs, these should be borne by AerCap and there should be no shifting of those costs to War Risks Insurers, either by a Sanderson or a Bullock order.

Chubb contended that any order for costs needed to reflect the facts that AerCap’s claim under the all risks section of the policy had failed, while its much smaller claim against Chubb under the war risks section had succeeded, and that the issue which had occupied the substantial majority of the trial (viz. peril) was one on which Chubb succeeded and AerCap failed. The appropriate order, Chubb contended, was that Chubb should pay 4.8% of 30% of AerCap’s costs, while AerCap should pay Chubb 70% of its costs of the AerCap claim. Chubb should not be ordered to pay any part of HFW AR Insurers’ costs.

What has given rise to the wide differences between these positions is, essentially, that AerCap had alternative claims against different groups of insurers, that its primary case was that all risks insurers were liable and war risks insurers were not, and that much of the trial was occupied by the issue of whether any operative peril was an all risk peril or a war risks peril.

It is necessary to identify the correct starting points. These are, in my view, the following:

Those starting points are to be reflected in a basic costs order that:

I turn to consider the extent to which there should be qualifications of the basic costs orders indicated above, to take account of the parties’ positions in relation to the issues which were in dispute, and the comparative importance of those issues in terms of the preparation and presentation of the case. As to this:

There was an argument as to whether the order for War Risks Insurers to bear (65% of) AerCap’s costs should be on a joint and several basis or should be on the basis that each insurer is ordered to pay a proportion of the relevant costs by reference to their respective lines on the war risk section of the LP insurance. In this regard War Risks Insurers referred me to the decision in Rowe v Ingenious Media Holdings Plc [2020] EWHC 235 (Ch) for the proposition that there is no default rule in this regard, but the court should consider what order is appropriate in the circumstances of the case.

In the present case, given that each insurer’s liability under the policy was several and not joint, and given that, if joint and several liability for costs were ordered it might impose on an insurer a liability for costs out of proportion to its liability under the policy, it seemed to me appropriate, at least in the first instance, to order that War Risks Insurers’ liability for costs should be several. I say ‘in the first instance’ because I was persuaded that it would be sensible to include in the order a liberty to apply, such that, if one War Risk Insurer did not pay, it would be possible to revisit whether there should be an order for those costs to be paid by the other War Risks Insurers.

A further point of clarification of the order for costs in favour of AerCap relates to the position of insurers who settled with AerCap. AerCap with Swiss Re on 12 November 2024, and settled with HDI by a confidential settlement dated 22 November 2024. Each of those settlements provided, inter alia, that the settling parties released each other from any claims for costs. As a result of those settlements, AerCap does not seek costs against HDI or Swiss Re, or vice versa. But I also consider it appropriate, for the reasons developed by Swiss Re, that the costs recoverable by AerCap from War Risks Insurers should be reduced by Swiss Re’s and HDI’s proportion of the costs up to the date of the respective settlements. Were that not the order made, it would be likely that there would be satellite litigation, for the other War Risks Insurers, if made responsible for AerCap’s costs including Swiss Re’s and HDI’s shares, would be likely to claim contribution from those insurers. No injustice is caused to AerCap, in my view, because it will have gained a financial advantage by agreeing, as against HDI and Swiss Re, to bear their shares of the costs. That will have been a part of the settlements reached, and will doubtless have been priced into the settlements as a whole.

The next issue is whether AerCap should bear the costs which I have decided HFW AR Insurers should recover in full itself, or whether those costs should be paid, in whole or in part, by War Risks Insurers; and, if they should be borne by War Risks Insurers whether that should be by means of a Sanderson or a Bullock order.

I was referred to the decision of the Court of Appeal in Irvine v Commissioner of the Police for the Metropolis [2005] EWCA Civ 139 for guidance as to the circumstances in which the court may make an order making an unsuccessful defendant responsible for the costs of a successful defendant. At [22] – [31] Peter Gibson LJ said this:

“[22] There is no doubt that the jurisdiction to make a Bullock or Sanderson order has survived the introduction of the CPR, though the exercise of discretion to make such an order must be guided by the overriding objective and the specific provisions of Rule 44.3. The jurisdiction is a useful one. It is designed to avoid the injustice that when a claimant does not know which of two or more defendants should be sued for a wrong done to the claimant, he can join those whom it is reasonable to join and avoid having what he recovers in damages from the unsuccessful defendant eroded or eliminated by the order for costs against the claimant in respect of his action against the successful defendant or defendants. However, it must also be recognised that it is a strong order, capable of working injustice to the defendant against whom the claim has succeeded, to be made liable not only for the claimant's costs of the action against that defendant, but also the costs of the other defendants whom the claimant has chosen to join but against whom the claimant has failed.

[23] The court has a wide discretion over costs, and even where a claimant reasonably brings proceedings against two separate defendants and succeeds against one and fails against the other, there is no rule of law compelling the court to make a Bullock or Sanderson order (see Hong v A&R Brown Ltd [1948] 1 KB 515). That case demonstrates that the court must also consider whether it would work injustice on an unsuccessful defendant to make him liable for the costs of another defendant against whom the claimant has failed.

[24] The circumstances in which the court makes such an order are stated in the White Book 2004, paragraph 44.3.8, as follows:

“Where a claimant sues two defendants in the alternative and succeeds against only one, the court has a discretion to order the unsuccessful defendant to pay the successful defendant's costs.”

[25] I stress the words “in the alternative”. That accords with the way the jurisdiction is expressed in both the Bullock and the Sanderson cases, and by Lord Brandon, giving the only reasoned judgment in the House of Lords, in Bankamerica Finance Ltd v Nock [1988] AC 1002, at page 1011, where the fact that the claims against the two defendants in that case were in substance alternative claims, on which the claimant was bound to succeed on one and could not have succeeded on both, was relied on as showing that the court had power to make a Bullock or Sanderson order.

[26] Such is the width of the language of Rule 44.3(1) that I do not suggest that the court has no power to order one defendant to pay the costs of another defendant, even when the claims are not in the alternative. But that is not the ordinary circumstances for a Bullock or Sanderson order. The judge had this in mind when she said that this was not a classic case for making the order.

[27] A further factor in determining whether a Bullock or Sanderson order is appropriate is whether the causes of action relied on against the defendants are connected with each other. In Mulready v JH & W Bell Ltd [1953] 2 All ER 215, the first defendant had contracted with the second defendant to construct a factory for the second defendant. The first defendant employed a sub-contractor to do part of the work. The plaintiff, an employee of the sub-contractor, fell from the factory roof, sustaining serious injury. He successfully sued the first defendant for breach of duty under the Building Regulations for failing to take suitable precautions to prevent him falling. He unsuccessfully sued the second defendant for breach of duty under the Factories Act in failing to provide means to ensure his safety while working on the roof. The trial judge, Pearson J, made a Bullock order. This court set that order aside because the causes of action against the defendants were different and depended on different facts. Lord Goddard, giving the judgment of this court (himself, Birkett and Hodson LJJ), said this at page 219:

“A Bullock order is appropriate where a plaintiff is in doubt as to which of two persons is responsible for the act or acts of negligence which caused his injury, the most common instance being, of course, where a third person is injured in a collision between two vehicles and where the accident is, therefore, caused by the negligence of one or the other, or both. It does not appear to us that it is an appropriate order to make where a plaintiff is alleging perfectly independent causes of action against two defendants where the breaches of duty alleged are in no way connected the one with the other.”

[28] Mr Featherby sought to distinguish this case on the basis that the first defendant had not sought to put the blame on the second defendant; but, as is apparent from the passage which I have cited, that is only a difference in fact and the reasoning of this court did not depend on that.

[29] I do not say that this factor is necessarily determinative, but it is a relevant consideration. The judge was of course fully aware in the present cause of what was the cause of action on which the claimant had succeeded and on what causes of action the claimant had failed.

[30] An important consideration which the court should have in mind when exercising the discretion whether to make a Bullock or Sanderson order is the reasonableness of the claimant's conduct in joining and pursuing a claim against the defendant against whom the claimant did not succeed. The case of Besterman v British Motor Cab Company Ltd [1914] 3 KB 181 provides the classic example of when it is appropriate to make the order. The plaintiff was injured in a collision between a taxi and a bus and did not know which was at fault, and sued the owner of the taxi as well as the owner of the bus.

[31] A significant factor is likely to be whether one defendant puts the blame on another defendant. But as Mr Featherby rightly conceded, the fact that one defendant blames another does not in itself make the joinder of the other reasonable. It must depend on the facts available to the claimant, and in particular whether the claimant can sustain a claim against the other defendant. Defendants frequently blame others when things go wrong, but it does not follow that the claimant is thereby given liberty to sue the others at the expense of the defendant against whom the claimant succeeds.”

For AerCap Mr Midwinter KC submitted that all the matters mentioned in that case and other recent authorities as to making a Bullock or Sanderson order appropriate were present here. It had been reasonable for there to be joinder of both sets of insurers; the claims against them were in the alternative; the claims against the two sets of insurers were connected with each other; and the insurers had laid the responsibility on each other. For War Risks Insurers, Mr Waller KC stressed that Peter Gibson LJ had referred to a Bullock or Sanderson order as being a ‘strong order’, and one which is capable of working injustice. He also stressed that the present is not a case in which it could properly be said that AerCap had not known which defendant to sue: it had as much if not more information about the cause of any loss of the aircraft as the defendants.

I am of the clear view that the responsibility for the costs of HFW AR Insurers should be split between AerCap and War Risks Insurers; and that while there should be an order passing some of the liability for HFW AR Insurers’ costs to War Risks Insurers, it should not apply to all those costs.

Thus, War Risks Insurers are correct to say that it was AerCap which first pleaded a positive case as to the loss being caused by an all risks peril, and it pursued All Risks Insurers by way of its primary case. AerCap also called expert and factual evidence designed to support that primary case. Yet, on the other hand, the issue of peril was very much one which was contested between the two sets of insurers. Even if AerCap had been neutral about peril, or put a war risks peril as its primary case (as DAE did), it seems highly likely that the same issue would have been debated, in much the same way, as occurred at the trial. Moreover, part of the effort of those representing HFW AR Insurers in the AerCap claim was directed to meeting the arguments of war risks insurers which, strictly, were advanced in other claims (of DAE, Merx etc) which were being tried at the same time. In my judgment, the fair apportionment is that AerCap should bear 35% and War Risks Insurers should bear 65% of the proportion of HFW AR Insurers’ costs which I have decided they should recover (viz. 90%).

In relation to the form of the order by which the War Risks Insurers are to be answerable for 65% (of 90%) of HFW AR Insurers’ costs, I considered that the simplest and best solution was that there should be a Sanderson order.

I should further clarify that in making a Sanderson Order that War Risks Insurers should pay 65% of (90% of) HFW AR Insurers’ costs, I do not include within the category of relevant War Risks Insurers either Swiss Re or Chubb. They cannot be regarded as having contested the issue of peril with AR Insurers. It should be LIC (as representative defendant, and those war risks defendants whom LIC represents) and Fidelis which are each severally responsible for their shares of HFW AR Insurers’ costs; and those shares should, for the avoidance of doubt, be grossed up to include Swiss Re and Chubb’s war risks lines.

As to interest on costs, there was no dispute that there should be an award of interest at either 1% or 2% over Bank of England base rate from the date on which the relevant receiving party paid those costs until a date after the paying party has received a detailed bill of costs, and thereafter at the Judgments Act 1838 rate of 8%. I consider that the appropriate rate is 1% over base rate. There was also an issue as to what period after the detailed bill of costs should be allowed before the Judgments Act rate applied. In my view it should be 3 months after service of a detailed bill of costs, given the likely complexity of those bills of costs.

AerCap and HFW AR Insurers made applications for payments on account of their costs. There was no dispute that orders for payments on account of costs were, in principle, appropriate.

AerCap’s total costs are said to be approximately £81 million. It sought an interim payment of 50% of that, or of whatever proportion of its costs it was found entitled to recover. War Risks Insurers described these costs as ‘astronomical’. They said that the figure for solicitors’ costs of some £54.5 million was ‘grossly excessive’, the sum for brief fees of almost £9 million was ‘plainly excessive, particularly in light of the limited role played by AerCap’s counsel at trial’, and that the sum to which AerCap will be entitled on a detailed assessment will be far lower than the total amount incurred. They suggested that an interim payment should be only of 30% of AerCap’s costs or of whatever proportion of those costs they were ordered to pay.

In my judgment there are clearly unusually serious issues as to the reasonableness and proportionality of the costs incurred by AerCap. I consider that the appropriate percentage for the purposes of an interim payment is of 45% of the proportion of its costs that I have found AerCap entitled to recover. 45% might in other cases be a somewhat conservative figure to use for a payment on account, but given the size of AerCap’s claimed costs and the other points raised by War Risks Insurers it appears to me to be justified in this case.

In relation to HFW AR Insurers’ costs, where the issues of proportionality and reasonableness, though real, are not as stark as in relation to AerCap’s total costs, I consider that the appropriate percentage to use is of 50%.

At the hearing, Swiss Re argued that, if I were to make a Sanderson Order in relation to HFW AR Insurers’ costs, then I should make a similar order in respect of Swiss Re’s costs, and order an interim payment. Mr Waller KC complained, as I saw it with force, that no proper notice had been given of those applications. The way in which I will deal with this is that I will permit the relevant parties a limited period of time after the handing down of this judgment to have discussions in relation to Swiss’s Re’s position as adumbrated at the hearing, and if there remains an issue I will resolve it on paper.

By the time of the hearing on consequentials, Merx had settled with all its war risks insurers, with no order as to costs. The only remaining issues, accordingly, related to HFW AR Insurers’ claim for costs against it or against Merx’s war risks insurers, and as to Swiss Re’s costs.

As HFW AR Insurers were successful, they should be entitled to their costs. That is subject to the fact that, as in the case of AerCap’s All Risks insurers, I consider that there should be a discount of 10% to allow for HFW AR Insurers’ costs referable to non-peril issues on which they did not prevail.

The further question which arises is as to whether those costs should be borne by Merx or by War Risks Insurers, and if the latter whether there should be a Sanderson or Bullock Order.

In my view it is appropriate that War Risks Insurers should bear 100% of (90% of) HFW AR Insurers’ costs. Merx, unlike AerCap, supported All Risks insurers’ case on peril at trial. It described that case, in its Opening Submissions, as ‘irresistible’. HFW AR Insurers relied on Merx’s factual and expert witnesses.

As to whether there should be a Bullock or a Sanderson Order, Mr Shah KC for War Risks Insurers said that, if either, it should be a Bullock Order. He suggested that the settlements which had been reached between Merx and War Risks Insurers may have precluded a claim for costs by Merx against those insurers; that effect to such an arrangement would be given if a Bullock order was made; but that that arrangement might be undermined by a Sanderson order.

For his part, Mr Temmink KC for Merx objected to reference to the terms of what were confidential settlement agreements. He submitted that the court should consider whether, any issue of the settlements apart, it was appropriate for there to be a Sanderson order, and if so, to make one. He submitted that the case was clearly one where a Sanderson order should be made.

In my view, without consideration of the impact of the settlements, this is a case in which it is appropriate to make a Sanderson order. It was War Risks Insurers who were responsible, in the Merx action, for the incurring of the costs relating to the arguments on peril, which are the costs which I have found that HFW AR Insurers should be able to recover. It is simpler and more convenient for there to be a direct order for those costs to be paid by War Risks Insurers in this case, as in the AerCap claim.

I do not consider that I should have regard to whether a Bullock Order might mean that Merx could not recover any costs of HFW AR Insurers which, under such an order, it was ordered to be liable for in the first instance. I have not seen the terms of the settlements. If they are as Mr Shah KC suggested, then that would mean that the parties have not made contractual provision for the situation where a Sanderson Order is made, and were content that, if the court decided to make a Sanderson Order, War Risks Insurers should bear that liability. That does not appear to me to be a reason not to make a Sanderson Order, if I otherwise considered it appropriate to do so. As I have said, I do so consider.

As to a payment on account of HFW AR Insurers’ costs, I consider that this should, as in the AerCap case, be of 50% (of 90%) of their costs.

Issues have been canvassed as to the apportionment of costs amongst HFW’s clients, in light of the overlap of issues across the AerCap, Merx and KDAC claims. Those matters appear to be ones which will arise, if at all, on the detailed assessments of costs. They are not matters on which I need to adjudicate at this stage.

Swiss Re also seeks its costs of the Merx action as against Merx, alternatively as against War Risks Insurers.

Swiss Re was sued by Merx only as an all risks insurer. I accordingly consider that, in principle, it should be entitled to its costs as against Merx, and, by way of a Sanderson order, against War Risks Insurers. I would reduce the percentage of its costs which it can recover, however, in the same way as for HFW AR Insurers in order to take account of non-peril issues, and thus order that it can recover 90% of its allowable costs from the War Risks Insurers.

I was, however, pressed by War Risks Insurers with the point that, given that Swiss Re was solely an all risks insurer in Merx, its interests would inevitably have been, and were, fully protected by HFW AR Insurers, and that there was no justification for it to have incurred any substantial costs, and certainly not the very significant amounts which it claims. I cannot make any determination of how much of Swiss Re’s costs may ultimately prove recoverable, but can say that the magnitude of costs claimed by Swiss Re in relation to the Merx action surprises me. Given the degree of my uncertainty as to the level of Swiss Re’s costs which will prove recoverable, I decline to make an order for an interim payment.

The issue of the incidence of costs in the Genesis action is complicated by the fact that Genesis succeeded against the following war risks market (‘D2-D6’), but failed against the leader, TMK 510, as well as failing against its all risks insurers.

Given this pattern, I consider that the starting points for the appropriate costs orders are as follows:

Certain modifications and clarifications of that basic position are, however, required.

There were applications for payments on account of costs by Genesis, GAR Insurers and TMK 510. Taking those in turn:

Swiss Re also contended that it was entitled to its costs against Genesis, alternatively against war risks insurers. I consider that it should recover its costs in the same way as the other all risks insurers (ie from D2-D6 and from Genesis in the proportions and way I have set out above). As in the case of the Merx action, however, given what I consider the surprising scale of Swiss Re’s costs attributed to the Genesis action, and in circumstances where its position as an all risks insurer was protected by GAR Insurers, I decline to make an order for a payment on account.

There was an issue in the AerCap, Merx and Genesis claims, as to the date by which detailed assessment of costs must be commenced. There was general agreement that the ordinary period under CPR r. 47.7 of three months from the date of the source of the right to a detailed assessment (in this case an order for costs) was too short. I will order that it should be extended in each action until 31 March 2026. There is liberty to apply for a further extension if required.

War Risks Insurers sought Permission to Appeal on 23 Grounds, which were supported by Submissions running to 116 paragraphs, dated 27 June 2025.

Chubb sought Permission to Appeal on 5 Grounds, supported by a Skeleton Argument of 14 paragraphs, dated 27 June 2025.

Submissions opposing Permission to Appeal were served on behalf of AerCap, DAE/Falcon, Merx, Genesis, HFW AR Insurers and GAR Insurers, and a letter was sent on behalf of Swiss Re opposing Permission to Appeal.

I have considered all of the submissions both for and opposing Permission to Appeal.

The submissions opposing Permission to Appeal strongly criticised War Risks’ Insurers’ Grounds, contending that they amounted to attempts to relitigate what was determined at trial, and to throw the kitchen sink at the application for Permission to Appeal, of a sort deprecated in LZLabs GmbH & Others v IBM UK Ltd [2025] EWCA Civ 842.

Reference was in particular made to what was said by Coulson LJ at [19]-[25] of his judgment in that case, as follows:

“19.

The starting point must be to identify the proper approach to PTA in this sort of case. There are a number of particular points to be made, none of which were addressed in the appellants’ skeleton argument.

20.

First, appeals on the judge’s fact finding will not generally be entertained by this court save in limited and well-defined circumstances. As Lewison LJ put it in Fage UK Limited & Another v Chobani UK Limited & Another [2014] EWCA Civ 5, “the trial is not a dress rehearsal. It is the first and last night of the show. Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case. In making his decision a trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellant court will only be island hopping.” I consider that each of those warnings must apply a fortiori where the first instance trial took 33 days and where so many of the individual complaints supporting the application for PTA are criticisms of the judge’s extensive fact-finding.

21.

Secondly, to the extent that the appellants argued that some of their criticisms arise out of the judge’s evaluation of the facts, rather than her fact-finding per se, I do not believe that that helps them very much. That is again because the threshold for challenge is high. At [76] of the judgment in Re Sprintroom Limited [2019] EWCA Civ 932; [2019] B.C.C. 1031, this court said:

“76.

So, on a challenge to an evaluative decision of a first instance judge, the appeal court does not carry out a balancing task afresh but must ask whether the decision of the judge was wrong by reason of some identifiable flaw in the judge’s treatment of the question to be decided, ‘such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion’”.

22.

Thirdly, one of the reasons for the length of time of this trial was the amount of expert evidence. The judge made copious references to that expert evidence in her judgment. In Thompson v Christie Manson & Woods Limited & others [2005] EWCA Civ 555, May LJ warned that, since the evaluation of expert evidence was likely to be bound up with a wider evaluation of matters of fact, an appellate court will be very slow to intervene in findings based on expert evidence. So he said that, whilst individual points may be amenable to appellate evaluation, “no appellate court should cherry pick a few such points so as to disagree with a composite first instance decision which, in the nature of a jigsaw, depended on the interlocking of a very large number of individual pieces, each the subject of expert evidence that the appellate court has not heard.” Again, the ‘jigsaw’ analogy applies directly here.

23.

Fourthly, this is an appeal from the Technology and Construction Court. There have been a number of authorities concerned with the practical difficulties of appealing against decisions of such a specialist tribunal. I gathered them together in Wheeldon Brothers Waste Limited v Millennium Insurance Company Limited [2018] EWCA Civ 2403 at [12]-[16]. I then summarised the applicable principles at [17] as follows:

“17.

In those circumstances, I consider that the applicable principles can be summarised as follows:

i)

The CPR provides a single test for applications for permission to appeal which covers the entirety of the High Court, including the TCC (Virgin Management).

ii)

Any application for permission to appeal on matters of fact or evaluations of expert evidence must surmount the high hurdle identified in Fage, Henderson, Thomson and Grizzly Business.

iii)

In addition, because a judgment in the TCC is likely to involve i) detailed findings of fact in an area of specialist expertise (Virgin Management and Skanska) and/or ii) lengthy and interlocking assessments of both factual and expert evidence (Skanska and Thomson) and/or iii) factual minutiae which is difficult or impossible sensibly to reconsider on appeal (Skanska), the Court of Appeal will be reluctant to unpick such a judgment (Thomson), with the inevitable result that obtaining permission to appeal on such matters in a TCC case may be harder than in other, non-specialist types of case (Virgin Management, Skanska and Yorkshire Water).”

24.

Fifthly, it is rare that an appeal court will be faced with – let alone grant – such a ‘kitchen sink’ application for PTA as this one, where every adverse finding is in issue. The applicants have had every opportunity to slim down their application, or to focus on the fundamental points of principle which they assert arise in this case. They have politely but firmly declined to take that course. Thus it is for the court to consider this application as a whole, in circumstances where many of the individual grounds are, bluntly, hopeless.

25.

I consider these five separate but overlapping points inevitably combine to demonstrate the height of the hurdle that the applicants need to surmount in this case in order to obtain PTA. They all point very firmly away from granting PTA. I refer to these five points collectively below as “the particularly high permission hurdle in this case.””

Since the written submissions on Permission to Appeal were served, DAE and Merx have settled their claims against War Risks Insurers. This is a matter of some importance, as the position of those parties is the subject of significant consideration in the Judgment, and the wordings of the parties who have not settled were not identical to those which have. The settlements have had the effect of removing some of the Grounds which might perhaps have been regarded as amongst the more promising candidates for Permission to Appeal. The whole of Section E (Grounds E1-E7) related only to DAE/Falcon and Merx.

As to the other Grounds in War Risks Insurers’ application, I have carefully considered them against the tests for Permission to Appeal, and in light of the various points made in LZ-Labs GmbH v IBM. My view is that the Grounds raised by War Risks Insurers, and by Chubb, do not stand a realistic prospect of success. I will say, very briefly, why I have formed that view.

As to Section A of War Risks Insurers’ Grounds (A1-A3), Ground A1 involves in part a challenge to findings as to the admissible factual background, which involved findings based on oral witness and expert evidence. There is a high hurdle to overcome in such a challenge. Otherwise, Ground A1 involves a contention that the construction I placed on the relevant Contingent Coverages was wrong, even in the absence of any market understanding which might have assisted War Risks Insurers’ case. I do not consider that those arguments stand a realistic prospect of success. Ground A2 would arise only if Permission to Appeal was given on Ground A1, and in any event the argument that the leases did not require composite insurance policies stands, in my view, no realistic prospect of success. Ground A3 is, in my view, very optimistic, for the reasons given in paragraph 326 of the Judgment.

As to Section B of War Risks Insurers’ Grounds of Appeal, Ground B1 faces real difficulties in the case of the AerCap and Genesis policies. I do not consider that it stands a realistic prospect of success. Ground B2 could only arise if War Risks Insurers were right on Ground B1. If the ‘triggers’ in the AerCap and Genesis policies had the meanings I found, it could not be argued with any prospect of success that the court was not in a position to determine whether they had been satisfied.

In relation to Section C of War Risks Insurers’ Grounds, I do not regard Ground C1 as standing any realistic prospect of success. It involves the contention that it is wrong to say that an aircraft is lost if, on the balance of probabilities, the insured has been permanently deprived of it. That is a difficult contention. Ground C2, in my view, stands no realistic prospect of success for the reasons given in paragraphs 539-540 of the Judgment and paragraphs 24-25 of AerCap’s submissions in relation to Permission to Appeal. Grounds C3 and C4 are in essence challenges to findings of fact. Consideration was given to the commercial lifetime of the aircraft, in the sense that it was found that there was, on the balance of probabilities, permanent deprivation, even if the commercial lifetime of the aircraft was lengthy. The court was aware that commercial lifetimes of some aircraft can be long (see for example Judgment, [777]). The assessment of the probability of non-return in the future was made, as are most assessments of what will happen in the future, on the basis of what had in fact happened by the date at which the assessment was taken to be made. There was a clear evidential basis for the assessment (see Judgment, [907], and see also paragraphs 34-37 of GAR Insurers’ Submissions on Permission to Appeal). Ground C5 goes nowhere. Even if War Risks Insurers’ analysis were correct, and it was necessary to look at whether there had been a loss as at the date of AerCap’s Claim Form, there had been, and that is what the court found (see Judgment, [912]).

Grounds D1 and D2 of War Risks Insurers’ Grounds essentially involve challenges to findings of fact. I do not consider that they stand a realistic prospect of success. Ground D3 would arise only if the case were one of concurrent independent causes, but the court has made a factual finding that that is not the case (see Judgment, [928]).

Ground F1 stands, in my view, no realistic prospect of success for the reasons set out in Judgment, [994]-[996].

Grounds G1 and G2 equally stand no realistic prospect of success, in my opinion, for the reasons given in paragraphs 30-33 of AerCap’s submissions.

Chubb’s first ground (as it is expressed in Chubb’s submissions) or group of grounds (paragraphs 1-4 of its ‘Grounds of Appeal’ document), do not stand a realistic prospect of success, including for the reasons identified in paragraphs 37-41 of AerCap’s submissions.

Chubb’s second ground (or paragraph 5 of its ‘Grounds of Appeal’ document) is, in my view, hopeless, and it is a construction which would have a commercially absurd consequence: see Judgment, [339]-[340].

I do not consider that there is any other compelling reason why there should be an appeal. On the contrary, it is desirable, if there are no points which have a realistic prospect of success, that there should be finality as soon as possible, so that the market knows where it stands, not least because of the forthcoming OP trial.

I hope that the parties will be able to draw up an agreed order giving effect to the above. If there remain any points at issue, I will resolve them on paper.