In Various Claimants v Giambrone & Law and Ors  EWHC 34 (QB), the High Court awarded a non-party costs order against a law firm’s professional indemnity insurer under section 51 of the Senior Courts Act 1981 in circumstances where the insurer had effectively relinquished control of the defence of the litigation. The decision follows on the back of the Court of Appeal’s decision in Travelers Insurance Company Ltd v XYZ  EWCA Civ 1099.
Tag: non-party costs order
In Travelers Insurance Company Ltd v XYZ  EWCA Civ 1099, the Court of Appeal upheld an order for costs against an unsuccessful Defendant’s insurer, under section 51 of the Senior Courts Act 1981. Even though the claims in issue were uninsured, the insurer had paid the costs of the defence and influenced the conduct of the claims. Further, the insurer had effectively dissuaded the insured from disclosing its lack of insurance to the Claimants, which prolonged the Claimants’ involvement in the litigation.
The Court of Appeal has upheld a decision to make a non-party costs order against an insurer who defended its insured in proceedings. The case provides a reminder of the risk insurers face when defending proceedings on behalf of an insured. It also summarises the key factors the Court will consider when deciding whether or not to make such an order against an insurer. In this case, the decisive factor was whether or not the insurer was acting exclusively or predominantly in its own interests