Davies v Forrett & Ors

This judgment concerns only costs. In it, without any disrespect, I shall refer to the parties as follows:-

The claim was brought on behalf of Davies by his father. He was grievously injured in a road traffic accident on 30^th August 2011 when he was a passenger being driven to work by Partington in a Citroen Saxo. Forrett was driving his Red Vauxhall Vectra ahead of the Saxo along a single carriageway “A” road, the A550 just after a roundabout at Penyffordd in North Wales. There was one car between the Saxo and the Vectra and a further vehicle in front of the Vectra. Therefore, as the Saxo approached the scene of the accident, it had just left the roundabout and ahead of it were three vehicles. It appears to have accelerated very rapidly and decided to overtake all three at once. After it passed the first one and as it was about to overtake the Vectra and the car in front of the Vectra, the Vectra pulled out to overtake also. This caused the Saxo to brake sharply and to veer off the road into a tree. There was no collision between the Vectra and the Saxo. Forrett, in the Vectra, drove on to his place of work. Both Partington and Davies, in the Saxo, sustained serious injuries, those of Davies being particularly grave. Davies, of course, was entirely blameless.

Forrett was identified because a witness was able to say that the Vectra had a “54” plate and a small spoiler. These details are true of Forrett’s Vectra. The police investigated and recovered CCTV which showed his Vectra very near the scene of the accident, very near the time of the accident. He arrived at work very soon afterwards and the accident occurred at a point consistent with it having involved his car on that journey. Despite this extremely strong evidence, he denied that it was his Vectra and suggested it was another red Vectra on a 54 plate, there apparently being another one in the area where he lives. He gave this evidence on oath at the Magistrates Court but was convicted of driving without due care and attention. It seems impossible that he could have been ignorant of the crash, if it was his vehicle, and he accepted as much when cross-examined at the trial. On that basis, if the Magistrates convicted him correctly, he was guilty of disgraceful behaviour. He had played a part in causing a very serious accident, driven away from it, and then lied on oath to avoid its consequences. Obviously if he continued to adopt that stance in any subsequent civil proceedings, such conduct might become relevant to costs. The Particulars of Claim were served on 10^th May 2014 and relied upon the conviction.

On 18^th August 2014 Forrett’s insurers served his defence. It admitted the accident to the Saxo, and that he was the driver of his red Vectra on the road on the relevant day, but denied everything else. It alleged that the accident was entirely the fault of Partington. In relation to the conviction, the Defence contains the following time honoured but, here as in many cases, mystifying words:-

“The defendant admits the conviction referred to in the Particulars of Claim but denies its relevance to the civil proceedings.”

The lawyers acting for Davies decided, on receipt of this document, to accord it more respect than, with hindsight, it deserved. They took it at face value. Believing that it may be possible that Forrett would succeed in establishing that the accident was in no way his fault (perhaps because it did not even involve his red Vectra) they decided to join Partington as second defendant. Partington was driving the Saxo as a named driver on an insurance policy which did not cover commuting to work. The Insurer which issued that policy to Partington’s partner, Southern Rock, was therefore denying any contractual or statutory liability to indemnify him and could only have been liable under Article 75 of the Motor Insurers Bureau Articles of Association. That liability would not arise if Forrett were liable for the accident to any extent, because he was insured. Therefore, Southern Rock had an interest in establishing that Forrett was liable for the accident (whether or not Partington was also liable). Southern Rock also had an interest in establishing that its position on the policy interpretation and under section 151 of the Road Traffic Act 1988 was correct. The lawyers acting for Davies were aware of this position which had been extensively canvassed in correspondence, and were aware that attempts by Southern Rock’s solicitors between 19^th June 2012 and 1^st May 2014 to get a straight answer from the solicitors acting for Forrett’s insurers (Admiral) had failed. They had been trying to find out whether he was denying liability or not. That correspondence no doubt started in June 2012 because Forrett was convicted by the Magistrates on 11^th May 2012. The defence served on behalf of Forrett, as I have indicated, perpetuated that lack of clarity. Thus, after that conviction, two years of correspondence and the issue of proceedings against him, Forrett continued to evade his responsibility for the accident.

Fearing, as it turned out wrongly, that there may be some rational explanation for Forrett’s behaviour and that of his insurers (beyond a desire to escape the consequences of his wrongdoing) Davies’ lawyers amended the claim to include Partington and Southern Rock as second and third defendants respectively. Their amended Particulars of Claim was served on 17^th September 2014. Leave was given to join the additional defendants on 24^th November 2014 and an action which Partington had issued for damages against Forrett was consolidated with Davies’ claim. Lay witness evidence was ordered to be disclosed on 4^th March 2015.

On 3^rd December 2014, Horwich Farrelly finally wrote to Sothern Rock’s solicitors with a substantive response on behalf of Forrett and his insurers (Admiral) to the question of whether they accepted that Southern Rock had no liability to indemnify Partington. They said they could not say one way or the other and asked for some disclosure. They were no doubt hoping that Southern Rock could be prevailed upon to indemnify Partington because they felt that liability was likely to be apportioned between the two drivers. There is no reason to believe that Partington has any substantial assets beyond the value of his claim for personal injuries against Forrett, and this was therefore the only way of reducing Admiral’s liability. On 5^th December Southern Rock served its Defence disputing liability on behalf of Partington and blaming Forrett. It asserted that because Forrett was insured and had some liability it was not therefore liable as Article 75 insurer. Partington served a Defence blaming Forrett, denying his own liability and declining to admit that Southern Rock was contractually entitled to refuse to indemnify him.

The Part 20 claim form by Southern Rock was issued on 12^th January 2015 seeking a declaration against Partington that it had no liability to him. Partington served a defence and counterclaim in these proceedings on 2^nd February 2015 which said that Southern Rock had behaved unfairly and was in breach of implied terms on the insurance contract by so doing. This, according to an email dated 9^th March 2015 from Partington’s solicitors to Southern Rock’s solicitors was drafted by Forrett’s solicitors, who also drafted a request for Further Information under Part 18.

Southern Rock applied to join Forrett and Davies as second and third defendants to its Part 20 claim for a declaration. This was granted on 13^th March 2015 in respect of Davies only, and Forrett never became a party to the Part 20 claim. He had opposed the joinder. The contentions set out in Partington’s first defence were never, therefore advanced formally by the party which had drafted them. Davies and Partington both served defences to the amended Part 20 claim. Davies’s said little of substance. His interest lay in securing, if he could, a valuable indemnity for Partington in case Forrett succeeded in avoiding all liability, as he was still trying to do. He was, in reality, unable to contribute very much to this argument and did not seek to take any false points. He disputed his alleged liability in costs asserting that the claim against him was unnecessary. Partington served a defence on 7^th April 2015 which says that the Part 20 claim against him was also unnecessary, now that it had been properly formulated. It therefore did not adopt the approach taken in the earlier document drafted by Forrett’s solicitors but served on behalf of Partington. On 18^th May 2015 a consent order was made granting the declaration sought by Southern Rock that it had no liability under the policy or section 151 of the Road Traffic Act 1988. The only way in which liability could attach to Southern Rock therefore was if Forrett were entirely exonerated and Partington were held liable. The issue of the costs of the Part 20 claim was reserved for determination by the court at the end of the Main Action or such other time as may be appropriate.

An application for a large interim payment was made on behalf of Davies. This was opposed by Forrett whose solicitor, Mr. Barrett, produced a witness statement accompanied by the necessary statement of truth dated 9^th March 2015. Apparently in reliance on a carefully selected extract from an independent witness who had given evidence at the Magistrates Court and secured the conviction of Forrett he said this:-

“I accept that the claimant is blameless and liability will attach to either Mr. Partington or Mr. Forrett or both. There is, however, a serious and substantial issue whether Mr. Forrett’s driving caused the claimant’s injuries.”

And, later, he said this:-

“…there is a serious and substantial issue whether Mr. Partington is insured in respect of the claimant’s claim and whether he is a defendant whose liability will be met by the third defendant under section 151 of the Road Traffic Act 1988.”

Shortly before the hearing of the interim payment application, witness statements were exchanged. This revealed that on 2^nd March 2015 Mr. Forrett had signed a witness statement. He said that he was driving along the relevant road at about the relevant time, but that he had been unaware of any collision. He said how shocked he had been by his conviction. In other words, he said nothing of any real value.

The Interim Payment application succeeded because the District Judge held on 12^th March 2015 that it was highly likely that on that state of the evidence Davies would succeed against Forrett. On the day after that, a summary judgment application was issued. On 21^st May 2015 Forrett’s lawyers served a skeleton argument disputing the application for summary judgment. This application was due for hearing by me on 17^th June 2015 but on 11^th June (3 months after the application had been issued) Forrett’s solicitors wrote consenting to judgment and agreeing to pay the costs of the summary judgment application. This was just after the third anniversary of his conviction for an offence which, if correct, determined his civil liability.

As a consequence of that concession, Davies has a judgment which will be met by Admiral and no longer seeks to pursue his proceedings against Partington or Southern Rock. This is not because Partington is not liable, but because there is no advantage to Davies in suing him now. Davies has never contended that Southern Rock is liable to indemnify Partington and joined that company to the claim so that all issues which then appeared relevant could be determined in the one action.

Partington’s claim against Forrett remains outstanding. I approach this costs exercise on the basis that it now seems inevitable that Partington will be entitled to judgment against Forrett, but that his damages may very well be reduced for contributory fault. Indeed, Mr. Plant has made an oral application for judgment against Forrett. I am not going to grant that application because there seems little point. I would dispense with the need for an application to be issued and supported by evidence if there were a clear benefit in doing so. It is accepted that there is a live issue to be tried as to apportionment of liability but contended that this can be done at the hearing when damages are assessed. That being so, there is no obvious benefit to entering judgment now and if Partington thinks otherwise, he can make an application in the usual way. The liability trial will be short and presumably will involve two witnesses, Partington and the independent witness Mr. Edwards. It seems unlikely that Mr. Forrett’s evidence will advance the issue.

It is agreed that Davies is entitled to summary judgment and an order that Forrett pay his costs of bringing the claim against him. Otherwise, there is no agreement at all except that it is agreed that I should not seek to assess any costs summarily because there are other extant orders for costs and there will have to be a detailed assessment of costs in any event.

Forrett submits that Davies should pay the costs of Partington and Southern Rock of the claim against them because he joined them and now seeks to discontinue the claim against them. Davies submits that Forrett should pay those costs because his behaviour and that of his lawyers necessitated their joinder. He failed to accept liability and sought to place all the blame on Partington for years after the accident which had the consequence that Davies reasonably joined Partington and Southern Rock who might, on that basis, be Article 75 insurers. Southern Rock therefore had an interest in the extent of Forrett and Partington’s liability but were not contractually entitled to conduct litigation on behalf of Partington because they had denied any contractual liability to indemnify him.

Davies also seeks his costs of the Part 20 proceedings. These are very small because he was a party only for a short time and served a short Defence very shortly before the consent order brought them to an end.

Southern Rock seeks its costs of the Part 20 claim in which it succeeded against Davies and Partington. They both have assets from which a claim could ultimately be paid, because they both have valuable personal injury actions. However, Mr. Blakesley on behalf of Southern Rock would prefer to have his costs on an indemnity basis against Forrett either as a party or as a non-party under section 51 of the Senior Courts Act 1981. During the hearing he made an application to join Forrett to the Part 20 claim for the purposes of costs alone. Mr. Sephton QC fairly accepted that he was not prejudiced by this application which I therefore grant.

Mr. Plant on behalf of Partington raises the issue of his costs of defending the claim against him, which has been discontinued, and his costs of the Part 20 claim. Although a contention was at one stage advanced on behalf of Partington in those proceedings which failed, this was drafted by the solicitors for Forrett who did so for their own purposes entirely. They wanted to help him to recovery an indemnity from Southern Rock only because it would make the claim of Davies much cheaper for them. For this purpose they provided him with a pleading which he served which was later rapidly abandoned. Although he “lost” the Part 20 claim it would never have been necessary at all if Forrett had accepted his own liability and not meddled in the insurance arrangements of Partington in a way which did nobody any good because Southern Rock is not, was not, and never could have been, liable to meet Davies’s claim in the circumstances.

I find that the conduct of Forrett and his insurers, Admiral, between 11^th May 2012 (when Forrett was convicted) and 11^th June 2015 when he admitted liability was designed to secure an advantage to which they were not entitled. It did so at risk of causing substantially more work and thus cost to themselves and all other parties. This is redolent of an era which had begun to fade into history even before 26^th April 1999 when the Civil Procedure Rules 1998 came into force. I have not set out above the detail of the lengthy correspondence between Sintons on behalf of Southern Rock and Horwich Farrelly on behalf of Forrett, although I have referred to the main dates. On one side the correspondence is appropriate throughout. Initially it is polite and constructive but becomes more insistent as time wears on. Almost every letter refers to the mounting costs caused by the refusal of Admiral on behalf of Forrett to accept his obvious fault. In particular, by letter of 22^nd September 2014 Sintons pointed out the great advantage of dealing with apportionment between Partington and Forrett in Partington’s claim against Forrett which was that Davies’s costs of that issue would be avoided and they may involve a substantial success fee which would then attach to the quantum costs as well. No constructive answer was received. On 16^th January 2015, Sintons said

“If you persist in funding/indemnifying the defence to the Part 20/additional claim (if that is indeed the position) ….we will ask the court to make an order against Admiral in accordance with section 51 of the Senior Courts Act 1981 and the guidance given by the Court of Appeal in Symphony Group plc v. Hodgson [1993] 4 All ER 143.”

In response to this series of correspondence, Horwich Farrelly said very little of substance. One thing which they did say is worth quoting. In the letter of 3^rd December 2014 (which I have referred to above as being entirely uninformative about its position on whether or not Southern Rock was liable to meet the claim against Partington) they said, of the proposed proceedings by Southern Rock for a declaration:-

“Such proceedings should be between [Southern Rock] and its insured and/or Mr. Partington. Of course, if such proceedings were to be commenced our client would have the right to be joined as a party to those proceedings on the basis that it has a significant financial interest in the outcome of the same.

“We can confirm that we are authorised to accept service of any declaratory proceedings. That in no way amounts to any admission of the validity of such proposed proceedings.”

By a statement, supported by a Statement of Truth, Mr. Barrett on behalf of Forrett said, on 9^th March 2015, that there was, after all, no basis at all why Admiral should be joined into any such proceedings. As I have recorded, it was this second approach which prevailed at least until I allowed Forrett to be joined in these proceedings for the purposes of costs only.

Moving from the correspondence to the steps taken in the proceedings, it appears to me that the same approach continued to govern the conduct of Forrett’s case, despite CPR 1.3. This imposes a duty on the parties to help the court to further the overriding objective. This is a duty and not an exhortation. Breach of duty is a significant matter which is directly relevant to costs issues.

The Defence of Forrett failed to set out his position clearly. The witness statement of Mr. Barrett refers to a serious and substantial dispute as to liability and as to the existence of insurance cover of Partington as late as 9^th March 2015. That is an unhelpful observation. Until the time of exchange of witness statements, Davies’ lawyers had not known what the basis of the denial in the Defence was. Perhaps, for example, the insurers had identified another red Vectra with a 54 plate which was in the vicinity of the accident. Perhaps the independent witness had changed his opinion. On exchange of evidence, the position became clear. There was no “serious or substantial dispute” as to liability.

In contrast to the behaviour of Forrett, Davies and Southern Rock both conducted themselves sensibly, in my judgment.

Against the background I have described, I now move to my decisions.

I decline to order any costs to be paid on the indemnity basis in this case. The conduct issues relied upon have been material in deciding what orders for costs to make against Forrett and there would be element of double recovery in giving effect to those factors not only in deciding whether to make an order but also on what basis.