Issuing court proceedings can generate a dilemma for Claimants and their solicitors where there are multiple Defendants and liability is in dispute. A balance must be struck between pursuing blameless Defendants and risk being penalised with a costs order yet ensuring all those potentially liable are party to proceedings to avoid a reduction in damages and possible professional negligence action. This was recently considered in Sims v Carruthers, The PR of Mr Leigh deceased & The Microlight School (Lichfield) Ltd.
The Claimant, represented by Hilary Meredith Solicitors Ltd, was the Widow and Executrix of the Estate of Mr Sims and brought a claim under The Law Reform (Miscellaneous Provisions ) Act 1934 and Fatal Accidents Act 1976 for the benefit of the Estate and Dependants.
Mr Sims and his pilot, Mr Leigh (Second Defendant), were fatally injured when their light aircraft was involved in a mid-air collision with an aircraft piloted by the First Defendant. The collision was initially investigated by the Air Accidents Investigation Bureau (AAIB) which concluded that there had been a failure by the pilots of both aircraft to observe the ‘see and avoid’ principle but noted the presence of a third aircraft, possibly a Microlight.
The Microlight was being flown by a student, under instruction, practising turns. The investigator hypothesised that the Second Defendant may have been turning to avoid the Microlight when he collided with First Defendant’s plane. An inquest was subsequently convened with evidence from the First Defendant and student and instructor of the Microlight. Following the inquest and prior to limitation, the Claimant commissioned a draft aviation expert’s report which concluded that fault lay with the pilots of the aircraft and not the Microlight. Proceedings were therefore issued by the Claimant against the First and Second Defendants only.
Both Defendants served defences denying liability and brought Part 20 Claims against each other. The Second Defendant subsequently applied to bring in the Microlight as a Part 20 Defendant.
This left the Claimant with a difficult decision. Limitation had passed and the advice of her aviation expert was that the Microlight was not liable for the collision. However, if the Microlight was found liable and she had not pursued a claim against it, she would receive no compensation. Litigation is unpredictable and it could not be assumed that the Claimant’s expert evidence would be preferred.
The Claimant therefore warned the Second Defendant that if their allegations against the Microlight were maintained, she would apply to join the Microlight as a Third Defendant and seek an indemnity in relation to costs from the Second Defendant. The Second Defendant confirmed their position leading to the Claimant applying. The Claimant requested the Second Defendant share the evidence they had blaming the Microlight to enable her to assess it but this was declined. In applying, the Claimant made it clear to all parties and the Court that she was taking this course of action to protect her position and given the Second Defendant’s stance. Permission to join in the Microlight as Third Defendant was granted and the Claimant adopted the Second Defendant’s allegations against the Third Defendant.
No lay witness evidence was served by the Claimant or Second Defendant (both witnesses having been killed) and expert reports were not exchanged until December 2012. It was clear the Second Defendant’s claim stemmed from their expert’s report; it subsequently transpired that a conference with their expert and Counsel had taken place before the Defence and Part 20 Claim being served. Prior to the joint discussion of experts however , in January 2013, the Second Defendant’s expert revised his report, and withdrew any allegation of blame against the Third Defendant. The Claimant promptly discontinued her claim against the Third Defendant, prior to the Second Defendant discontinuing its claim.
On discontinuing, the Claimant applied pursuant to the overriding objective and CPR 44.3 for a ‘Sanderson Order ‘ ( Sanderson v Blyth Theatre Co  ) or ‘Bullock Order'( Bullock v London General Omnibus Co ) that the Second Defendant pay the Third Defendant’s costs plus the Claimant’s costs of pursuing the claim against the Third Defendant. The Third Defendant opposed the application and cross applied for indemnity and wasted costs.
The Claimant relied upon Irvine v Commissioner of Police for the Metropolis , King v Zurich Insurance , and Moon v Garrett  which establish where a Claimant sues two or more Defendant in the alternative, and succeeds against some but not others, the Claimant should not normally end up paying the costs of the successful Defendant.
The Third Defendant relied upon Brookes v HSBC Bank plc  and Messih v McMillan Williams & Co  that the court should have cogent reasons for departing from the default position in CPR 38.6 and only typically where the circumstances of the case are unusual. In support of its application for costs to be made on the indemnity basis, it applied the criteria of Three Rivers Council v Bank of England .
At first instance, the Claimant’s application was dismissed and the Third Defendant awarded indemnity costs against the Claimant and Second Defendant. The application for a wasted costs order was dismissed.
Alarmed at this decision and the implications for many personal injury claimants and practitioners, the Claimant sought permission to appeal. Had the Claimant not joined in the Third Defendant, she faced a possible loss of damages and we, as advisors, the risk of a professional negligence claim. It was felt the Claimant had acted reasonably, adopting a ‘cards on table’ approach in setting out the reasons for joining the Third Defendant and had never mounted a positive case against it. She had also warned the Second Defendant of the consequences of her and their actions.
By this stage, liability had been conceded by the First and Second Defendants.
The Claimant appealed on the grounds that the District Judge applied the wrong test when determining if and how he could exercise his discretion under CPR 38.6 to depart from the presumption. Or, in the alternative, he failed to take into account and/or give sufficient weight to relevant factors in exercising his discretion. If the District Judge had applied the correct test and/or balanced the factors in the test fairly, he would have ordered the Second Defendant, not the Claimant, to pay the Third Defendant’s costs.
The Claimant argued that the District Judge was wrong in that he was guided by Brookes v HSBC Bank Plc which concerned the situation where the claimant discontinued against all defendants rather than one defendant having succeeded against others; and failed to properly consider the principles of Irvine v Commissioner of Police for the Metropolis , King v Zurich Insurance  and Moon v Garrett . Furthermore, the District Judge failed to attach sufficient weight to the factors of the case in that the claims were made in the alternative; the causes of action were the same (the Claimant merely adopting the Second Defendant’s allegations); the Second Defendant’s expert had concluded the Third Defendant had been negligent and, should this evidence have proved persuasive to the court and led to a finding that the third defendant’s negligence was the sole cause of the collision, the Claimant would have been without a remedy without joining the Third Defendant; the Claimant had been allowed to join the Third Defendant outside limitation and promptly discontinued upon receipt of adverse evidence.
On appeal, HHJ Armitage QC considered that the District Judge had ‘misdirected himself’ by failing to address the significance of Irvine v Commissioner of Police for the Metropolis , King v Zurich Insurance , Moon v Garrett . He held, on the basis of the second defendant’s conduct, the evidence available to the Claimant at a time when she could not insist on disclosure of the Defendant’s report, that it was reasonable to join the third defendant and discontinue when it became apparent that there was no such evidence of liability. Setting aside the District Judge’s Order, he ordered the Second Defendant to pay the Third Defendant’s costs (a ‘Sanderson Order’) and the Claimant’s costs of pursuing the Third Defendant.
Said Clare Stevens, partner at Hilary Meredith Solicitors:
“The decision of HHJ Armitage QC allows Claimants and their advisors to breathe a sigh of relief. It recognises the need, where reasonable, for practitioners and Claimants to err on the side of caution and join several defendants to proceedings in order to avoid injustice to their client and protect themselves against the risk of being professionally negligent.”