A man who was jointly liable for costs that were covered by his co-claimant’s after-the-event (ATE) insurance has been ordered to reimburse half of the payment to the insurer, but not half of the costs drafting fee.
In ARAG PLC v Jones and Anor [2020] EWHC 3484 (Comm), His Honour Judge Keyser QC, sitting as a High Court judge in Cardiff, ordered the tenants in a housing disrepair claim and unpaid rent counterclaim to pay the landlord’s costs on a joint and several basis. ARAG, which provided ATE to one of the claimants, a Ms Gibson, paid £40,000, plus £1,200 (including VAT) to a firm of Costs Lawyers it had instructed.
ARAG then launched proceedings to recover a 50% contribution of each sum from the other tenant, Leighton Jones.
HHJ Keyser ruled that Ms Gibson had a cause of action for a contribution from the defendant “simply on the basis that they were joint debtors in respect of the costs liability and there was accordingly a common law right to contribution to the extent that Ms Gibson paid more than one half of the debt”.
He ordered Mr Jones to pay £20,000 towards the costs but rejected the claim for contribution of one half of the payment to the Costs Lawyers.
“The only admitted or agreed facts in that regard are that the claimant instructed the Costs Lawyers to consider [the landlord’s] bill of costs and thereafter paid them £1,200 inclusive of VAT.
“The facts do not show that the instruction was given jointly on behalf of Ms Gibson and the defendant. The defendant may well have benefited from the work done by the Costs Lawyers; if he did, that is his good fortune, but it does not mean that he has any obligation in law to share the bill.”
Charlie Newington-Bridges (instructed by Berry Smith) for the claimant. Samuel Parsons (instructed by Robertsons) for the defendant.