Sir David Berriman and others v Rose, Thomson, Young (Underwriting) Limited and others QUEEN'S BENCH DIVISION (COMMERCIAL COURT) (Transcript: Harry Counsell & Co) HEARING-DATES: 2 APRIL 1996 2 APRIL 1996 COUNSEL: M Crane QC, S Moriarty and M Reeve for the Plaintiffs; J Hirst QC, A Popplewell and M Matou for the First Defendent; R Slade for the Members' Agents PANEL: MORISON J JUDGMENTBY-1: MORISON J JUDGMENT-1: MORISON J: This is an application by the successful Plaintiffs for their costs against the Managing Agents, RTY, who have been represented by Mr Hirst, and against a variety of their Members' Agents, some 40 odd, who have collectively instructed Mr Slade. The Judgment which I gave in this case found in favour of the Plaintiffs on the main issue but in relation to three separate matters I rejected their complaint. Those are respectively the stock loss argument; the matching reinstatements point, and an issue in relation to the appropriateness of Korea Foreign as a participant on the Special Priority Treaty. The first point, therefore, that I deal with is Mr Hirst's suggestion, adopted by Mr Slade, that the order for costs which I make in the Plaintiffs' favour, which he accepts must be made against the Defendants, should on the account of those three matters be reduced by some sensible proportion which he suggests as 10%. He invited me to apply what I think has been called the Elgindata principle, see Re Elgindata Ltd (No 2), Court Of Appeal (Civil Division), [1993] 1 All ER 232, [1992] 1 WLR 1207, and in particular to apply what is (iii) of Lord Justice Nourse's principles set out on page 1214 of the [1992] 1 WLR, which reads: "The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs". Mr Hirst says in this case that the Plaintiffs should be deprived of a part of their costs because of the three issues to which I have referred. It seems to me, having regard to the nature of all the issues and how the trial progressed, that it would be an inappropriate exercise of my discretion to deprive the Plaintiffs of any of their costs on account of those three issues. I say that because in relation to the stop loss issue and the matching reinstatements issue, I took the view that although the Plaintiffs failed in relation to the claim based directly on those matters, nonetheless they were items which Mr Bullen should have had regard to if he had properly written the book of business. In relation to Korea Foreign, it added almost nothing, as it seems to me, to the argument which had to take place in any event as to the criteria to be applied when determining whether a participant was an appropriate participant to the Special Priority Treaty. It seems to me that I could not conclude in relation to Korea Foreign that there has been any significant increase in the length or cost of the proceedings, nor indeed in relation to the other two matters to any significant extent. Accordingly, I do not think that the Plaintiffs should be deprived of the full order for costs on account of those matters. In relation to certain aspects of the evidence, that is expert evidence from a broker; expert evidence from a Mr Vermont as to the duties of an underwriter when contracting outwards reinsurance protection, and the Names themselves, I was invited to give some kind of direction or guide to the taxing officer to indicate that as neither Mr Vermont nor Mr Clarke was called by the Plaintiffs and as, effectively, the Names' evidence was treated as being admissible, some disallowance should be made in respect of those items. I am not prepared to give that indication. In relation to Mr Clarke, it seemed to me that the Plaintiffs were entitled to have him available and as a result of Mr Bullen's acceptance of the propositions that were put to him, which related to the way in which the Piper Alpha insurance had been contracted, there was no need to call him. In relation to Mr Vermont, again it seems to me that the Plaintiffs were entitled to have him available, bearing in mind that there was an issue as to the duty of an underwriter in relation to the choice of the security for the benefit of his syndicate. If I recall correctly, the Defendants were asserting on the pleadings that there was no duty on the underwriter, he was entitled to rely on the broker. In relation to the third item, that is the evidence of the Names, it is significant that RTY had pleaded that its syndicate had been described by its managing director as a high risk syndicate: the Names were entitled to adduce evidence to refute that allegation. That was an allegation which was subsequently not persisted in, and Mr Horrocks gave no evidence. In any event, as it seems to me, it was appropriate for statements to be taken from Names to deal with issues of contributory negligence and volenti, neither of which in the end was argued. I therefore give no direction to the taxing officer and leave it to him to decide as to the amount to be allowed in respect of all the evidence. I turn therefore to a quite separate point made on behalf of the Members' Agents by Mr Slade, with his usual forcefulness. He says that each Plaintiff should only be entitled to recover costs from that Members' Agent against whom he has entered judgment. He says, secondly, that the costs recoverable by each Plaintiff should not exceed the costs for which he personally is liable to the Plaintiffs' common solicitor, Richards Butler. He cites in support of those two propositions, two cases, Beaumont v Senior and Keene v Towler. Neither of those cases is entirely apposite and may be distinguished on their facts. However, I accept from him that in the normal course of events a party will only recover costs against that Defendant who is liable to him. I also accept that a Plaintiff, in the exercise of the Court's discretion, is not going to hold a Defendant liable for all the Plaintiffs costs if only one out of a number of them has succeeded against that Defendant. But it seems to me that the Court's powers to award costs are wider than the power to award costs only as between the parties to the litigation, and a fortiori in a case of group litigation like this. I believe that where it is just to do so a Plaintiff can recover costs against a Defendant against whom he had no claim in law. The features of this case which makes such an order appropriate are that this is group litigation, sensibly conducted by collecting together on the one hand the Names, all of whom had a common interest, and the Members' Agents, all of whom had a common interest in defending these proceedings together. The way the case was funded indicates that it was regarded as group litigation. Previous orders made in the action were made without complaint or suggestion that they should be in some way apportioned as between the Members' Agents. In those circumstances I take the view that a rather more modern approach to the making of an order for costs should be taken than the early twentieth century cases to which Mr Slade was referring me would suggest. Therefore, I take the view that the order for costs should be an order for costs by the Plaintiffs against the Members' Agents whether or not any particular Plaintiff was a client of any particular Members' Agent. Mr Slade's second point is that the costs which a Plaintiff can recover is only that for which he is personally liable to his common solicitor, Richards Butler. Again, it seems to me that in principle there is nothing objectionable to that statement but, on the other hand, where there is group litigation the reality is that the costs are incurred on behalf of all the Plaintiffs and that technically each Plaintiff is responsible for the whole sum. It therefore does not require the Court or the taxing officer to attempt to apportion the costs that any one Plaintiff will be personally responsible for at the end of the day, assuming all the Plaintiffs were solvent. It seems to me that the justice of the case is met in the exercise of my discretion if I say that the Plaintiffs' costs should be regarded as a single entity and, for the purposes of the order for costs which I have made, the Members' Agents should all be regarded as effectively one unit. Accordingly I make the order for costs against all the Members' Agents and against RTY, without reduction. DISPOSITION: Judgment accordingly SOLICITORS: Richards Butler; Cameron Markby Hewitt