Kerry Underwood

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here

In Lewis v Tindale (1), Motor Insurers’ Bureau (2) and Secretary of State for Transport (3) [2018] EWHC 2376 (QB)

the Queen’s Bench Division of the High Court held that the Motor Insurers’ Bureau was liable to indemnify the claimant who suffered serious injuries when he was struck by an uninsured 4×4 vehicle whilst walking on private land.

The claimant obtained judgment against the driver and the issue was whether the Motor Insurers’ Bureau was liable to indemnify him in those circumstances.

The High Court held that the Motor Insurers’ Bureau is an emanation of the state for the purposes of the European Union Insurance Directives and was therefore bound to indemnify the claimant at least to the minimum European Union cover of €1 million per victim.

The judgment is very long and reviews all of the authorities in detail and differs from earlier judgments of the High Court.

Although only binding on these particular facts there is now a powerful argument that all of the other exclusions in the Motor Insurers’ Bureau agreements, save for the one allowed by the European Union Directive, that is the exclusion for knowingly entering a stolen vehicle, are illegal, an argument that has long been made by many critics of the Motor Insurers’ Bureau Scheme.

Thus the decision follows that of the European Court of Justice in

Vnuk v Zavarovalnica Triglav dd (Case C-162/13) [2016] RTR 10.

The claim against that the Secretary of State was a Francovich claim, that is for alleged failure to implement the Directive, in accordance with the decision in

Francovich v Italian Republic (joined cases c – 6/90 and c – 9/90) [1995] ICR 722.

That claim was stayed pending resolution of the claim against the Motor Insurers’ Bureau.


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September 28, 2018 at 7:20 am

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here

In Sabados v Facebook Ireland [2018] EWHC 2369 (12 June 2018)

the High Court granted a Norwich Pharmacal order requiring Facebook to disclose the identity of the person unknown who requested deletion of the deceased’s profile.

The claimant, Sabados, had been in a close personal relationship with the deceased and deletion resulted in the irrecoverable loss of posts and messages including photos of the two together.

Some of the information on the deceased’s profile, such as messages the claimant sent to the deceased, contained her personal data and procuring deletion would amount to a breach of the Data Protection Act 1998.

Facebook did not acknowledge service and were not represented at the hearing.

The order was required because Facebook declined to reveal who made the deletion request.

The claimant satisfied the three conditions for a Norwich Pharmacal order:

  • there was a good arguable case that the deletion of the deceased’s profile amounted to breach of the Data Protection Act 1998 and misuse of private information.

It was also arguable that the requestor committed a breach of confidence/misuse of private information if they had access to the deceased’s profile prior to deletion.

  • The claimant did not have sufficient information to formulate her claims without the order.
  • Facebook was unequivocally mixed up in the unknown person’s wrongdoing

Although the court was concerned by the proposition that it could take jurisdiction on the basis of distress suffered in England in respect of actions which took place in the Republic of Ireland, and possibly Bosnia, it held that there was an arguable case that the English court had jurisdiction under the Recast Brussels Regulation (RBR) to make the order on the basis that the alleged damage was suffered in England for the purposes of Article 7(2) of the Recast Brussels Regulation.

This case was heard under the Data Protection Act 1998 but is a useful reminder of the care required when handling requests for deletion of personal data both to ensure the requestor has appropriate authority and in relation to any third party data involved.

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September 27, 2018 at 8:06 am

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In September and October I am delivering my new course – Getting the Retainer Right – details and booking form here.

In Re LB Holdings Intermediate 2 Ltd (in administration) and Re Lehman Bros Holdings plc (in administration) [2018] EWHC 2017 (Ch) (24 July 2018)

D and L applied under CPR 19.2(2) to be joined as respondents to proceedings brought by the administrators of a company in the Lehman group (I2 proceedings).

Those proceedings had been conjoined with other proceedings (PLC proceedings) brought by the administrators of another group company (PLC).

D was a respondent in the PLC proceedings, as a subordinated creditor of PLC, and PLC’s administrators were respondents in the I2 proceedings.

D argued it had a “separate perspective” because it was the only party seeking to establish the relative priority for the payment of certain loans made by PLC to I2; PLC’s administrators were taking a neutral stance in the PLC proceedings and adopting a positive case in the I2 proceedings.

L argued that it also had a separate perspective, and that the neutrality of the PLC administrators might hamper the argument in the I2 proceedings.

Mann J granted D’s application to be joined but refused L’s.

Although both parties had sufficient economic interest to justify joinder, it would not be ordered speculatively and the parties had to make out a positive case.

For D, the neutrality of PLC’s administrators in the PLC proceedings was “technical”, and would not hamper them from adducing arguments in the I2 proceedings.

However, D had established, by a narrow margin, a sufficient difference in its perspective, and a vigour in relation to the proceedings, to make it appropriate to order joinder.

D’s undertakings not to duplicate effort or add to costs were important.

Although L demonstrated a strong economic interest, that was insufficient.

L had not identified any arguments not being advanced by another party, and did not have any further perspective to contribute.

The fruits of L’s document review work in the previous Lehman litigation could be made available “in a perfectly efficient and sensible manner without joinder”.

The decision emphasises that joinder will not be ordered on a speculative or precautionary basis; a positive case must be made out.

The court endorsed the approach taken in the Lehman Waterfall III proceedings (24 June 2016, unreported), namely that in complex insolvencies involving large numbers of parties, the court must be on its guard to keep representation within proper bounds, only allowing in parties who have some separate perspective or legal interest to illuminate for the benefit of the court.

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September 26, 2018 at 8:06 am

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In September and October I am delivering my new course – Getting the Retainer Right –  details and booking form here.

In Lock v Aylesbury Vale District Council [2018] EWHC 2015 (Ch) (9 July 2018)

the High Court set aside a bankruptcy order based on a petition re unpaid council tax on the basis that the debtor had no assets to satisfy her liability in bankruptcy and no investigation of her affairs would bring anything to light and so there was no point in making her bankrupt.

The debtor served evidence that she was living in social housing, was dependent on financial support from her daughter, and that as she had no assets there was no useful purpose in a bankruptcy order.

The District Judge made the bankruptcy order as there had been liability orders which had not been set aside or challenged.

The debtor appealed, relying on section 266(3) of the Insolvency Act 1986, which gives the court a general discretion to dismiss a petition.

The local authority had prepared a bankruptcy checklist, not in evidence before the District Judge who made the bankruptcy order, which showed it was aware before presentation of the petition that the debtor was unemployed, did not receive benefits nor own a home and noted that the case was an unusual one as there were no clear assets but that the debtor may have come into an inheritance, although there were no documents to support that belief.

It had not put those unusual circumstances before the court to enable the debtor to address them in evidence.

The debtor argued at the appeal that she had not received any inheritance nor was she likely to.

Where a bankruptcy petition was founded on unpaid council tax, there was a burden upon a public authority to show a prima facie case that a bankruptcy order would achieve some useful purpose.

The local authority should have put the unusual circumstances to the court.

The District Judge had failed to consider the debtor’s argument that a bankruptcy order would serve no useful purpose.

It was unjust to make the bankruptcy order and the appeal was allowed.

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September 25, 2018 at 8:06 am

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In September and October I am delivering my new course – Getting the Retainer Right – details and booking form here.

In Sony/ATV Music Publishing LLC and another v WPMC Ltd and another [2018] EWCA Civ 2005 (6 September 2018)

the Court of Appeal allowed an appeal against a non-party costs order as the judge had erred in giving no weight to the lack of warning given to the non-party.

The appellant was the director and majority shareholder of WPMC Limited, the unsuccessful defendant in a copyright action.

WPMC Limited was ordered to pay the claimant’s costs.

WPMC Limited was then voluntarily wound up and a liquidator was appointed.

About a year later, the claimant, SATV, notified the appellant that they intended to seek a non-party costs order.

The appellant objected, but the court held that, although there was no explanation for the lack of warning, it would not have made any difference.

The Court of Appeal held that the absence of any warning here was fatal to the application for the non-party costs order, although each case will depend on its acts.

SATV knew that WPMC Limited would not be able to pay their costs and that WPMC Limited and the appellant were operating on the same assumption.

As such, the failure to warn for so long was manifestly unfair to the appellant because he was deprived of realistic opportunities to settle the litigation or to protect himself against the adverse effects of a non-party costs order by taking out ATE insurance, or to abandon the defence of the litigation at a much earlier stage.

“85. I have concluded that the judge left out of account features of the case which were relevant to the question he had to decide. I must therefore exercise the discretion afresh. I would accept that Mr Bailey provided limited funding for the litigation, and was responsible for keeping it alive, hoping ultimately to derive personal benefit. I nevertheless take into account that defending the proceedings for copyright infringement enabled the company to protect the Documentary for future exploitation, and the proceedings were thus in a very real sense in the interests of the company. The proceedings were also in the interests of Firefly, who would expect to be repaid their debt, in one way or another, out of any proceeds of exploitation. Whilst a neutral factor, I would observe that no criticism whatever could be, or was, made of Mr Bailey’s conduct in defending the proceedings on the basis of the legal advice he had received.

86. Thus far I would regard matters as fairly evenly balanced. It might be said that Mr Bailey, standing as he did to benefit from the outcome, was “a real party” if not the only one. However the absence of any form of warning is, in my judgment, fatal to the application for the NPCO. It is plain, as the judge indeed held, that SATV knew or should have appreciated that WPMC would not be able to pay their costs in the event that the claim succeeded, and they knew that WPMC, and Mr Bailey with whom they dealt directly, were operating on the same assumption. In those circumstances the failure to warn until a year after final judgment is given strikes me as manifestly unfair to Mr Bailey. It would be unjust because Mr Bailey was deprived of realistic opportunities to settle the litigation or to protect himself against the adverse effects of a NPCO, or to abandon the defence of the litigation at a much earlier stage.

Additionally, the court held that it is not necessary to show that the interests of a third party director and his company diverge before a non-party costs order can be made.

The court rejected the submission that if non-party costs orders were available where the interests of the company and its shareholders were aligned, several unprincipled consequences would follow, including piercing the corporate veil and undermining the need for a causative link between the third party’s actions and the costs.

The appellant was not the sole stakeholder as WPMC Limited had a substantial creditor which would also benefit from the successful defence of the proceedings.

There was no basis for extending the Arkin principle whereby a professional funder’s liability for costs is limited to the amount of funds it provided to this type of case.

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September 24, 2018 at 8:04 am

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here.

Indemnity Costs of Premature, Uncoordinated GLO Application Awarded Against Claimants

In Crossley v Volkswagen Aktiengesellschaft and others (VW Nox Emissions Group Litigation) [2018] EWHC 2308 (QB) (4 September 2018)

a Senior Master of the High Court held that an application for a group litigation order (GLO) had been made prematurely and awarded indemnity costs against the claimants in relation to the costs of preparing for, and attending, a number of hearings, including the adjourned hearing of the GLO application.

The costs are said to be around £450,000.

The claimants had issued the GLO application in November 2016, but it was only heard in March 2018.

In the meantime, there had been satellite litigation between two main law firms seeking to represent the claimants, requiring determination at an expedited trial.

The defendant argued that, in light of matters including the satellite litigation, it had been premature for the claimants to make and progress the GLO application, resulting in unnecessary hearings and costs; the claimants had significantly breached settled principles and practices regarding the commencement and progression of group claims by, among other things, proceeding prematurely, in an uncoordinated way and failing to provide a notional lead lawyer who could speak with the authority of the coordinated group.

In reaching her decision, the Senior Master explained that:

  • While not every issue had to be agreed and a draft order finalised before a GLO could be sought, the court expected the claims to be at a stage where the GLO issues and any differences between the claimants’ claims could be identified, as well as the position on funding and costs.

Different firms of claimants’ solicitors should have agreed a common approach, a solicitors’ group should have been formed and lead solicitors identified.

  • Insufficient time had been allowed for pre-action exchanges.

It was not possible for the court to deal with the GLO application on the state of the evidence and information before it.

It was obvious that the hearing would need to be adjourned, as the claimants conceded at the hearing.

  • There were no limitation reasons for issuing prematurely and even if there had been, they could have been dealt with by agreement or, if that was not possible, by issuing proceedings and seeking a stay.

  • The timing of issuing the GLO application was a commercially driven decision linked to the funding arrangements sought by one of the firms vying to represent the claimants: it was not for the claimants’ benefit.

  • A number as aspects of this case took it “outside the norm” and therefore an award of indemnity costs was appropriate.

The judgment contains useful guidance in relation to applications for group litigation orders.

“85. It is not the case that the court expects all issues to have been agreed and a final formulation of the draft GLO to be in place by the time of the application or the hearing. Although in many GLO applications the draft GLO is wholly or substantially agreed, in a significant number there are still issues not agreed that need to be determined by the court. However, the claims need to be at a stage where GLO issues can be identified, and where some claimants may have different claims in law, these need to be identified so that the court can decide whether they should be included in the GLO or dealt with outside the GLO. Proper vetting of claims must have occurred so that weak or unmeritorious claims can be weeded out. Satisfactory funding of the litigation and ATE insurance (or other demonstration of an ability to pay adverse costs orders) needs to have been arranged, or at least be some way towards that being achieved. The common and individual costs provisions of the draft order need to have been discussed and agreed if possible. This is usually an area capable of agreement in most cases. A realistic timetable for service of GPOC and a Generic Defence needs to have been discussed. The different firms of claimant solicitors need to have had substantial discussions so that a common approach can be agreed if possible, and if not the issues of difference, and the reasons for them, identified. The formation of a Solicitors Group needs to be discussed and agreed, and identification, and agreement if possible, of lead solicitors. The defendants need to be involved in discussions once there is a sufficiently identified common approach, or differences of approach are capable of being identified. If there are limitation issues agreement for stays pending the GLO need to be canvassed, and applications made if agreement cannot be reached. The court needs a substantial amount of information before it can determine such issues.

86. I reach the conclusion that the GLO application in this case was issued prematurely. For such a major piece of litigation there was simply not enough time allowed for preaction and pre- application correspondence with other Claimant groups and with the Defendants. The state of disarray in which the application reached me at the hearing on 30 January 2017 made that conclusion all too obvious. As I commented at the hearing, it was simply not possible for the court to have dealt with the GLO application on the state of the evidence and information before it. It was clear to me when reading the papers submitted for that hearing over the weekend before it was due to be heard, that there was no possibility that the application could be dealt with and that the VW Defendants’ application for an adjournment was, unless there was some development that I was unaware of, bound to be successful. When the hearing commenced on the morning of Monday 30 January 2017 the Relevant Claimants conceded that there would have to be an adjournment. That conclusion should have been reached by the Relevant Claimants at a much earlier stage.”


Is there any point in group litigation orders?

Would matters not be best left to the courts’ general case management powers?

This case is not much of an advertisement for the legal profession or for claimants’ solicitors.

Rare Costs Order Against Local Authority In Court of Protection

In London Borough of Lambeth v MCS (by her litigation friend the Official Solicitor) (1); and Lambeth CCG (2)[2018] EWCOP 20)

the Court of Protection, part of the High Court, took the exceptional decision to make a costs order.

The order was made against the London Borough of Lambeth and Lambeth Clinical Commissioning Group, both public bodies.

The subject of the Court of Protection order was a 55 year old woman from Colombia who collapsed in the street in the United Kingdom in 2014 and after that had cognitive problems and was transferred to hospital and remained there.

The lady wanted to return to Colombia and could not speak English and the London Borough of Lambeth applied to the Court of Protection.

The High Court Judge was very critical of both the London Borough of Lambeth and the Lambeth Clinical Commissioning Group saying:

“It is obvious that this Court is deeply critical of the manner in which this case was handled both before and after the institution of proceedings. It is further troubling that even within the written submissions are many misconceived assertions or contentions as to fact.”


“To submit that the CCG [Clinical Commissioning Group] was “throughout commendably assiduous” in seeking the return to Colombia is about as misplaced and offensive a submission as could possibly be contemplated.”

The judge said that the subject of the Court of Protection proceedings should have been repatriated to Colombia “years earlier, rather than being kept caged in an environment and jurisdiction where she was so obviously unhappy and did not belong”.

The judge concluded:

“5. Without hesitation I conclude that the circumstances of this case are so poor and so extreme (both in relation to institution of proceedings and their subsequent conduct) that I should make an order that the costs of the proceedings should be born by the Applicant and Second Respondent. It is submitted to me (at paragraph 2) that the Court is asked to consider that whilst the Applicant was a party throughout, the CCG only being joined towards the end of the proceedings, it was the CCG who was the decision maker. I am not entirely clear what is being submitted here, Ms Rowlands represents both, and I am unable to make any apportionment. They are both public bodies, I simply make an order against both jointly and severally.”

This is a very short judgment – just one and a half pages – and is well worth reading.

Discontinuance: Rare For Usual Rule to Be Disapplied 

In BAE Systems Pension Funds Trustees Ltd v Bowmer & Kirkland Ltd and Ors [2018] EWHC 1222 (TCC)

the Queen’s Bench Division of the High Court followed the usual rule that a discontinuing claimant must pay the defendant’s costs.

Here, the claimant discontinued against the second defendant, but sought an order that the costs of the second defendant be paid by the first defendant, rather than the claimant.

The court refused, and ordered that the usual consequences of CPR 38.6 should apply, that is that the claimant pay the costs of the defendant against whom it had discontinued.

The fact that, due to limitation issues, the claimant had sensibly issued against all possible defendants in circumstances where the claimant was unclear about the financial or insurance position of the potential defendants, made no difference.

The court said that it had a wide discretion under CPR 44 and was free to make such an order, although there was no authority on the point, but in any event it declined to do so.

The court gave as an example of where such an order might be appropriate, as where a claimant had been positively misled by the defendant into suing another defendant.

Some guidance could be obtained from the approach to Sanderson orders, that is where an unsuccessful defendant pays the costs of a successful defendant direct, and here the court referred to the decision of the Court of Appeal in

Irvine v Commissioner of Police for the Metropolis [2005] 3 Costs LR 380,

where it cited, with approval, this passage from the first instance decision:

“It does seem to me that this is a case where, as in all cases, parties and their legal teams have to take a careful and close look at the basis on which they seek to bring in another party to proceedings and to make a judgment for themselves on the basis of the information available to them as to whether or not they are likely to succeed in claims against those parties. They cannot expect, simply because one party seeks to lay the blame at the door of another, that they can necessarily pursue that other party at the expense of the one who is pointing the finger. Parties must give careful thought to how they are going to pursue their claims”.


It will be very rare for the usual rule on discontinuance, that is that the discontinuing party pays costs, to be disapplied.

It should be noted that even in Qualified One-Way Costs Shifting cases, where discontinuance occurs, a costs order is invariably made against the claimant in the usual way, and the issue then is as to whether or not that order can be enforced against the claimant.



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September 21, 2018 at 8:10 am

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In September and October I am delivering my new course – Getting the Retainer Right – in 10 cities – details and booking form here.

In Kassam v Gill and another (unreported), 13 August 2018, (County Court at Birmingham)

the County Court  considered the procedure for completing a statement of truth in an online claim form, providing guidance on what amounts to compliance with CPR requirements for statements of truth, under CPR 22 and CPR 5.3.

The judgment also provides helpful analysis of what constitutes “conduct of litigation” for the purposes of the Legal Services Act 2007.

The claimants instructed a firm to assist them with a possession claim.

The firm were not solicitors and were not authorised or exempt under the Legal Services Act.

A representative of the firm helped the claimants complete an online claim form.

The first claimant had ticked the box, or clicked the icon, on the online form to signify agreement to the statement of truth, on behalf of himself and the second claimant.

However, in the County Court’s view, this was not sufficient to satisfy the rules.

CPR 5.3 and PD 55B.9.1 envisaged that the signature was applied personally.

The County Court considered that a representative applied the signature when he entered the claimants’ names on the online form.

He acknowledged that there was no provision for entering the claimants’ names in the section of the form providing for verification of its contents by the statement of truth.

The claimants’ names and signatures were automatically inserted into the statement of truth once the box was ticked or the icon clicked.

The judge noted that this was “not a happy fit” with the requirements of the rules.

However, while the claimants’ actions did not comply with the letter of the rules, in the context of the online process, they met the purpose of the provisions.

Therefore, it was not appropriate to strike out the claim form. No doubt the court was influenced by the fact that the defendant, the claimants’ tenant, clearly owed a lot of rent.

The County Court’s analysis of what constitutes “conduct of litigation” for the purpose of Schedule 2, paragraph 4(1) of the Legal Services Act is also worth noting.

On the facts ,the court considered that the firm was closely involved in the issue and prosecution of the claim, including providing advice, drafting proceedings, preparing witness statements and bundles.

This was more than assisting with clerical or mechanical matters and, along with the fact that a representative had entered the firm’s address as the correspondence address on the claim form, breached the provisions of the Legal Services Act.

However, although the firm had committed an offence, this had no direct effect on the validity of the claimants’ cause of action and it was not just or proportionate to strike out the claimants’ claim as a result.

The court said:

“Courts should be slow to grant an application from a litigant for a right of audience or a right to conduct litigation to any lay person, including an MF [McKenzie friend] this is because a person exercising such rights must ordinarily be properly trained, be under professional discipline (including an obligation to insure against liability for negligence) and be subject to an overriding duty to the court. These requirements are necessary for the protection of all parties to litigation and are essential to the proper administration of justice.”

“The courts are generally less concerned with the question of whether the assistance a litigant is offered on an ad hoc basis by a trusted relative who is involved because he has the interests of the litigant at heart amounts to conducting litigation, than when that “assistance” is being provided by a commercial organization for a fee. … the policy which underlies the need for those conducting litigation to be trained, insured and subject to discipline is unlikely to be undermined by that sort of “assistance”.”


Parliament, the courts, and society generally, need to grapple with this issue.

Quite simply – are we to have a free market where unqualified, untrained and undisciplined people can practice law, or are we to insist that only qualified, regulated, disciplined and insured lawyers can conduct litigation?

There is no halfway house.  

Written by kerryunderwood

September 19, 2018 at 10:20 am

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