SUEZ FORTUNE INVESTMENTS LTD AND ANOTHER V TALBOT UNDERWRITING LTD AND OTHERS

[2019] EWHC 3300 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Teare, 4 December 2019

Insurance – Costs – Indemnity costs following insurance claim dismissed on grounds of loss by wilful misconduct – Case out of the norm – Unreasonable conduct – CPR 44.3

This was the costs decision following a lengthy litigation in which first the insured, then its mortgaging bank had sought an indemnity under a war risks policy for the constructive total loss of the vessel Brillante Virtuoso. The costs decision pertained to the litigation between the bank and the underwriters, where the bank's claim was dismissed because the cause of the loss was the shipowner's wilful misconduct. The bank was not a party to that misconduct. It had agreed to costs on a standard basis, and on an indemnity basis until the date when the shipowner's claim was struck out, but the underwriters sought costs on an indemnity basis. Their claim was based on the character of the claim, looked at objectively, its weakness, the manner in which the bank had pursued its claim and its effect on the underwriters' response to it. The bank's reply was its claim was independent of the owner's, that it was objectively arguable, that it would not have been apparent at the start of the trial that it was weak, that the underwriters' case had to be tested and won at trial and that the outcome of the trial was not a foregone conclusion.