UK: (Re)Insurance Weekly Update 24 - 2015

Last Updated: 7 July 2015
Article by Nigel Brook

Welcome to the twenty-fourth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2015

This week's caselaw:

Gulati v MGN Ltd

Whether withdrawn Part 36 offer, which claimant beats, entitles the claimant to indemnity costs

http://www.bailii.org/ew/cases/EWHC/Ch/2015/1805.html

The claimant made a Part 36 offer which provided that "after 21 days, this offer is withdrawn". Following the recent change to the Part 36 rules, that had the effect of an automatic withdrawal of the offer. She went on to better the offer at trial and sought her costs on an indemnity basis. Although the Part 36 costs consequences are not available where a Part 36 offer has been withdrawn, the withdrawn offer can be taken into account under CPR r44 (which gives the court a general discretion as to costs). The claimant sought to rely on Stokes Pension Fund v Western Power [2005], in which the Court of Appeal held that a defendant who had made an offer which did not comply with Part 36 was nonetheless still entitled to the same costs consequences as if it had been a valid Part 36 offer.

Mann J held that other factors relating to the defendant's conduct in this case would not have justified an award of indemnity costs. As for the Part 36 offer, the claimant's argument would introduce the possibility of an award for indemnity costs for behaviour which was not necessarily unreasonable or unreasonable to a sufficient extent beyond the norm and that would be "novel": "of itself a failure to accept an offer has generally not been treated as the sort of undesirable behaviour justifying indemnity costs". Stokes did not help the claimant as it was decided under a former Part 36 regime. Nor did it matter that the claimant was not seeking all the costs consequences under Part 36 – the award of indemnity costs is a "very significant" consequence.

As a result the withdrawn Part 36 offer "loses much of its significance" and indemnity costs were not awarded.

COMMENT: Although indemnity costs were not awarded in this case, it is not impossible that such an award can be made where a Part 36 offer has been withdrawn. In Community Gateway Association v Beha (see Weekly Update 45/11), indemnity costs were awarded to a defendant. The judge's decision was based in part on the withdrawn Part 36 offer and in part on what should have been a growing perception by the claimant that its case was weak. He considered that the Part 36 offer allowed the court to not only make a costs award in favour of the defendant but also to take it into account when considering whether to do so on the indemnity basis.

Frontier Agriculture v Bratt Brothers

Whether right to object to arbitrator's jurisdiction had been lost/the meaning of "takes part"

http://www.bailii.org/ew/cases/EWCA/Civ/2015/611.html

The appellant applied to set aside an order to enforce an arbitration award against him. Section 73 of the Arbitration Act 1996 provides that a party may lose the right to object (eg on the ground that the arbitrator lacked jurisdiction) if he "takes part" in the proceedings without objection. In this case, the appellant had taken no part in the arbitration, but he had told the respondent that the proposed arbitrator was "in principle....acceptable to me". The Court of Appeal held that "a party who participates in the appointment of an arbitrator without qualification does take part in the arbitration proceedings for the purposes of section 73".

In this case, though, although the appellant had accepted the arbitrator as being independent and impartial, he had disputed his appointment under a contract (contract no. 2) on the ground that he had not entered into that contract (although he did accept that he had entered into a separate contract (contract no.1) in respect of which there was going to be arbitration). The appellant had therefore not lost his right to challenge the arbitrator's jurisdiction in relation to contract no.2.

The appellant still had to show that he had a real prospect of success in proving that there had been no agreement to arbitrate and he was able to do that on the facts.

COMMENT: This case might be compared with the recent decision in Sierra Fishing v Farran (see Weekly Update 05/15), where it was held that inactivity or silence does not amount to taking part within the meaning of section 73. In that case, the claimant had indicated that it would be appointing its own arbitrator, and that did not amount to taking part because the claimant did not recognise the tribunal as being properly constituted yet. By contrast, the party here had participated to some degree in the appointment of the arbitrator and that would normally amount to taking part (although for the reason explained above, it did not in this case).

Libero Commodities v Augustin

Whether arbitration had been validly commenced

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Comm/2015/1815.html&query=libero&method=boolean

One of the issues in this case was whether an arbitration had been validly commenced. The relevant arbitral institution's rules provided as follows:

"1. Any party wishing to commence arbitration under these Bylaws ("the Claimant") shall send us a written request for arbitration...2. When sending the request, the Claimant shall also send [list of various requirements including the name of the nominated arbitrator and the application fee]".

The respondent to the arbitration (and claimant in this case) argued that arbitration was only validly commenced when both 1 and 2 were carried out.

Butcher J rejected that argument. A reasonable person would not conclude that it was a pre-requisite to the effective commencement of an arbitration that the "request for arbitration" should be accompanied by the relevant fee and there was nothing commercially absurd to find that payment of a fee is not a pre-condition to there being an effective arbitration. The judge also rejected an argument that Page v Hewetts (Weekly Update 34/13) applied here. That case had found that a claim form had not been validly issued because it was not accompanied by the appropriate fee. However, that was a case about the commencement of court proceedings and did not help in the construction of the institution's rules in this case.

COMMENT: Limitation periods apply to arbitration claims in the same way as they do for court actions. In court proceedings, this means that the claim form must be issued within the prescribed time period. However, there is no fixed rule for arbitration – the Arbitration Act 1996 ("the Act"), section 14(1) allows the parties to agree the required act. This case therefore contains some useful guidance as to how their agreement might be interpreted in the event of a dispute on the issue.

Lachaux v Independent Print

Without notice applications and whether time should be extended to serve particulars of claim

http://www.bailii.org/ew/cases/EWHC/QB/2015/1847.html

The defendants applied to set aside an order extending time for service of the particulars of claim. The claimant had made its application without notice and the defendants argued that the application should have been made on notice and that the extension should not have been granted.

Nicol J held as follows:

(1) CPR r23.9(3) provides that, where an order is made after a without notice application, "the order must contain a statement of the right to make an application to set aside". That was not done here, but the judge noted that the defendants' solicitors were extremely experienced and so did not need to be told that they had this right (and in fact an application to set aside had been made).

(2) The judge queried whether there had been the necessary "extreme urgency" to justify a without notice application. In any event, it was not clear why informal notification was not given to the defendants' solicitors. PD23A para 4.2 provides that "Where an application notice should be served but there is not sufficient time to do so, informal notification of the application should be given unless the circumstances of the application require secrecy". In addition, the claimant breached the requirement under CPR r23.9(2) that a party who applies without notice must serve the application notice and any evidence in support on the defendants. For all these reasons, the order was set aside.

(3) The judge then considered afresh whether an extension of time should be granted. This was not an application for relief from sanctions and hence the claimant only had to persuade the court to exercise its discretion under CPR r3.1(2) (ie the court's general case management powers). Here the claim form had been issued and served in time, and the defendants had been shown draft particulars of claim. Weighing all the relevant factors together, Nicol J concluded that it would be just to grant the extension.

Rio Tinto v Vale

Whether letter of request could compel the disclosure of confidential information

http://www.bailii.org/ew/cases/EWHC/QB/2015/1865.html

The claimant obtained an order from the English court following a Letter of Request from the New York court. The order required the production of certain documents and the examination of certain witnesses. The issue in this case was whether the defendant should be required to identify individuals who had provided it with information on a confidential basis.

It is a well-established principle that confidentiality, in and of itself, is not a reason for refusing to accede to a request from the foreign court. The court must undertake a balancing exercise, weighing up the public interest in preserving confidentiality and the public interest in the English court assisting the foreign court.

Whether or not the defendant would be able to recruit or engage individuals to give them information on which they depend in future was not a sufficient ground for refusing the request. However, the court was entitled to take account of the "truism" that even in a democratic society, "whistleblowers may be castigated for speaking out and suffer prejudice to themselves or their families". Of key importance in this case was the fact that the information being sought (ie the identities of the sources) was of only peripheral importance to the US proceedings. It would not be a sufficient answer, either, that the information being sought would be subject to a Protective Order: " It is only if the breach of confidence can be justified and disclosure should be ordered in principle, that the Court goes on to consider whether the information or documents should be disclosed to a limited class of people". Accordingly, the defendant was under no obligation to reveal any information that would identify the individual sources.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Nigel Brook
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.