Vargas v. Ford - denying appeal bond to Public Citizen
Sharing the Blame CLJ article June 2015
1. COSTS: Sharing the blame | Legalease Law Journal Series - LawJournals.co.uk
http://lawjournals.co.uk/2015060572995/the-commercial-litigation-journal/costs-sharing-the-blame[10/06/2015 17:07:23]
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The Commercial Litigation Journal
05 June 2015
Andrew Kelmanson is a
trainee with Clyde & Co
LLP
‘Claimants
involved in multi-
party litigation may
apply to the courts
to make
discretionary costs
orders in
circumstances
where a claimant
succeeds against
one or more
defendants, but
does not succeed
against others.’
COSTS: Sharing the blame
Clyde & Co LLP
Issue: The Commercial Litigation Journal: May/June 2015
Andrew Kelmanson provides a timely reminder of the law behind co-defendant costs orders
Alongside determining the liability of the parties to proceedings, courts are also tasked with apportioning the costs of litigating between them. Under CPR r44.2(a),
the ‘general rule’ is that successful litigants are to recover their costs from unsuccessful litigants (court orders often refer to costs being ‘in the case’). This position
is far less straightforward when dealing with multi-party litigation involving a number of defendants who may be facing multiple claims.
Background
Part 44 of the CPR provides for specific circumstances where the ‘general rule’ does not apply (CPR r44.3) as well as for the courts
to exercise their discretion where they see fit (CPR r44.2(b)). The recent Court of Appeal case of Coward v Phaestos Ltd [2014], in
which the court ruled that trial judges have a wide discretion in ordering costs under Part 44 which is in no way constrained by the
costs rules under Part 36, confirms the unfettered scope which the courts have in making Part 44 costs orders.
Drawing on the guiding factors under CPR r44.4 in exercising their discretion, the courts often punish parties (and their advisors) for
failing to settle before trial or at least to control costs in circumstances where it would be reasonable for them to have done so (see
the discussion on the third criterion in ‘Satisfying the criteria’).
Though the consequence is uncertainty on how arguments as to costs will be treated by the courts, the CPR’s flexibility is designed
to facilitate justice between the parties. Claimants involved in multi-party litigation may, as a result, apply to the courts to make
discretionary costs orders in circumstances where a claimant succeeds against one or more defendants, but does not succeed
against others (co-defendant costs orders, or CDCOs). The mechanics of CDCOs take two different forms: a ‘Bullock order’ (Bullock
v The London General Omnibus Company [1907]) and a ‘Sanderson order’ (Sanderson v Blyth Theatre Company [1903]).
This article explores the substance and intentions of CDCOs; the criteria on which the courts base their decisions whether to make
CDCOs and examples of instances where these criteria have been applied; other relevant key issues, including circumstances in
which a Sanderson order is appropriate and the duty of care owed by a claimant’s solicitors in advising as to the joinder of
defendants; and the potential for case law in the area to develop further, particularly where an unsuccessful defendant is insolvent or
is a known credit risk.
Bullock and Sanderson orders
A Bullock order is an indemnity order that first requires the claimant to pay to the successful defendant the costs incurred by the
successful defendant in its defence. The claimant is then permitted to recover those costs (or a proportion of those costs) from an
unsuccessful defendant. Consequently, the claimant has the potential to be left out of pocket where, in pursuing an unsuccessful
defendant for those costs, it fails to recover them; for example, where an unsuccessful defendant is insolvent, or where there is a
charge over its assets.
A Sanderson order requires an unsuccessful defendant to pay directly to a successful defendant the costs incurred by a successful
defendant in its defence (or a proportion of those costs). For the claimant, this is the more favourable order of the two; the claimant
is excluded entirely from the payment mechanism involved in a successful defendant recovering the costs that it has incurred in
defending the action.
Satisfying the criteria
Neither order is appropriate in favour of a claimant who has sued both defendants because of a doubt as to the law as opposed to the facts, nor where the causes
of action against each are quite distinct, nor where the respective claims are not alternative, nor where they are based on quite different sets of facts.
2. COSTS: Sharing the blame | Legalease Law Journal Series - LawJournals.co.uk
http://lawjournals.co.uk/2015060572995/the-commercial-litigation-journal/costs-sharing-the-blame[10/06/2015 17:07:23]
In Irvine v Commissioner of Police for the Metropolis [2005] the Court of Appeal was tasked with determining whether the decision of a trial judge, who had refused
to make either a Bullock or Sanderson order, should be upheld. The Lords Justices concurred as to the four criteria, as set out by Gibson LJ in his judgment, that
the courts should consider above all others in order to be satisfied that they should make a CDCO:
Though Waller LJ in his judgment in the Court of Appeal case of Moon v Garrett [2006] made it clear that there are ‘no hard and fast rules’ in assessing the
appropriateness of making CDCOs, the above form the criteria which the courts will be guided by when deciding relevant cases. It is important to note that the
courts will only interfere with trial judges’ costs orders if it can be shown that they erred in principle in their approach or disregarded some relevant factor, or if their
decisions are plainly wrong (see Phonographic Performance Ltd v AEI Redifusion Music Ltd [1999]).
The successful defendant was sued in the alternative to the unsuccessful defendant
Pursuing a claim ‘in the alternative’ makes it more likely that a claimant can successfully pass on the costs of a successful defendant to an unsuccessful
defendant. In establishing this criterion, the reasoning given in Irvine drew on the judgment in Bankamerica Finance Ltd v Nock [1988] where Lord Brandon had
clarified that the court had the jurisdiction to make a Bullock or Sanderson order. Bankamerica concerned claims in which the claimant was bound to succeed in its
claim against one co-defendant but could not have succeeded against both.
Irvine interpreted the circumstances in Bankamerica to be no different in essence from those where proceedings involve a claimant seeking to sue a ‘foundation
defendant’ (the defendant against which a claimant perceives that it has its strongest claim, ie for maximal damages) and one or more additional defendants
(because it does not know which of two or more defendants should be sued for the wrong done). In either scenario, as long as the claimant demonstrates
reasonable conduct in joining additional defendants (see the discussion on the third criterion), a court will be able to consider whether to make a Bullock or
Sanderson order in favour of a claimant.
Even where claims are not issued in the alternative, the court has, by virtue of its wide discretionary powers, the ability to order one defendant to pay the costs of
another defendant owing to the ‘width of language of CPR r44(3)(1)’. In Irvine, however, Gibson LJ made it clear that ‘that is not the ordinary circumstances for a
Bullock or Sanderson order’.
The causes of action relied on against the defendants were connected with each other
A feature indicative of a particularly close connection between the causes of action against co-defendants is where they arise from identical facts. This factor is not
necessarily ‘determinative’ but is ‘a relevant consideration’. Where the claims are not truly alternative (in that they do not arise from an identity of facts), assuming
that it is possible for a claimant to show at least some such connection, the key consideration is the reasonableness of the claimant in originally joining the
successful defendant.
The claimant’s conduct in joining and pursuing a claim against the successful defendant was reasonable
This criterion is an ‘important’ consideration in the court’s exercise of its discretion as to whether to make a Bullock or Sanderson order.
A claimant is able to show that they have acted reasonably primarily by demonstrating that they have analysed the merits of pursuing more than one defendant, as
well as by pursuing defendants in the most cost-effective manner possible (which includes accounting for the value of the claim and any offers to settle that have
been made). In Irvine, the damages were agreed to be a total sum of £26,355, whereas the total costs of the four parties to the proceedings amounted to over
£100,000, which Gibson LJ criticised for being wasteful of the court’s time and resources.
An interesting contribution to the judicial commentary in the area came courtesy of British Sky Broadcasting Group plc v Digital Satellite Warranty Cover Ltd (in
Liquidation) [2012] (BSkyB), in which Sir William Blackburne referred to the impact on the costs award of the reasonableness of pursuing or defending particular
issues, and the manner in which they are pursued or defended. He referred to the dishonesty evidenced by two of the successful defendants in presenting their
cases, clarifying that irrespective of the successful defendants’ conduct, the ‘general rule’ should remain the usual starting point. He did however refer to the
‘tendency [for that misconduct] to create an unwarranted increase in the costs of the action to either or both of the parties’, suggesting that such conduct would be
considered in an assessment of the quantum of the legal costs payable to the successful defendant(s) by the claimant and/or unsuccessful defendant(s).
What is ‘reasonable’ in this context?
The courts have considered several factors in determining the parameters of ‘reasonable’ conduct when deciding whether to make a CDCO. These can be
summarised as:
Solicitors’ point of practice – best to err on the side of caution?
Claimants (and their advisors) may feel that the joinder of further defendants to an action has the potential to be a minefield in relation to costs considerations. The
courts’ treatment of cases on an individual basis (albeit within the framework of what are now seemingly streamlined criteria) means they may fear that although a
claimant could be successful against one or more defendants, the risk that they will be unsuccessful against further defendants may expose that claimant to
punishment by way of an unfavourable costs order if the court decides that the joinder of the unsuccessful defendants was unreasonable.
The practitioner may therefore be well advised to exercise caution when offering advice as to the joinder of a potential co-defendant where the merits of doing so
are unclear. This is particularly the case where the prospects of the claimant succeeding against that party are difficult to quantify because of the lack of
information available at the material time.
A County Court judgment of 20 September 2013, Sims v Carruthers, provides authority which addresses advisors’ potential concerns. The facts centred on the
claimant’s husband and his pilot, Mr Leigh, represented by the second defendant, being involved in a fatal collision between their light aircraft and an aircraft
piloted by the first defendant. The second defendant had originally applied to join a third defendant to proceedings, only to decide against doing so, after which the
claimant could not at the material time insist on disclosure of the second defendant’s report to determine whether it was reasonable for the claimant to join the
third defendant. Ultimately the claimant’s solicitors erred on the side of caution in joining the third defendant to the action (even though this could have exposed
the claimant to potential costs implications where joining the third defendant was deemed to be unreasonable on the facts).
The judge decided that, despite it becoming apparent that there was no evidence of liability attaching to the third defendant, at the time the second defendant
discontinued its action against the third defendant, it had been reasonable for the claimant to have joined the third defendant under the circumstances. The judge
therefore set aside the district judge’s order, instead making a Sanderson order in favour of the claimant, against the unsuccessful second defendant (for the
successful first defendant’s costs), as well as ordering that the unsuccessful party pay the claimant’s costs of pursuing the third defendant. It is a highly important
judgment from the practitioner’s point of view since it recognises that advisors should, where reasonable, err on the side of caution by joining several defendants to
proceedings. In such a way, they are able both to avoid injustice to their client as well as to protect themselves against optimistic allegations of negligence.
One defendant had put the blame on another defendant
(1) the successful defendant was sued in the alternative to the unsuccessful defendant;
(2) the causes of action relied on against the defendants were connected with each other;
(3) the claimant’s conduct in joining and pursuing a claim against the successful defendant was reasonable; and
(4) one defendant had put the blame on another defendant.
• Was there an (objectively) arguable claim? (This is likely to be influenced by the fact that at the stage of considering this question, the claimant will
inevitably have failed against the successful defendant.)
• Did the claimant gain some additional advantage by joining defendants beyond the foundation defendant? (If so, it suggests that doing so was a reasonable
course of action.)
• Did one defendant blame another?
• Has the claimant been successful, and, if so, to what extent?
3. COSTS: Sharing the blame | Legalease Law Journal Series - LawJournals.co.uk
http://lawjournals.co.uk/2015060572995/the-commercial-litigation-journal/costs-sharing-the-blame[10/06/2015 17:07:23]
This is ‘a significant factor’, an analysis of which is dependent on the ‘facts available to the claimant, and in particular whether the claimant can sustain a claim
against the other defendant’. A claimant should not rely on one defendant seeking to shift the blame onto another defendant as irrefutable evidence of the
claimant’s reasonable conduct in joining that other defendant, though it may indicate the reasonableness of joining that defendant to the action.
Other significant dicta relating to the making of a Sanderson order
An Australian case, Nichols v Singleton Council [2011], tackled the issue of whether it was suitable to make a Sanderson order in circumstances where a
councillor sought relief against the council and three employees and/or agents of the council in relation to a complaint made about him under the council’s code of
conduct. The defendants were jointly represented at the hearing, a fact which, ultimately, was deemed important (see below). The court found in favour of the
claimant against the council and two of its employees/agents, but found against the claimant in respect of the third employee/agent.
Echoing the logic applied in Irvine, the court determined that the overriding consideration in varying the general rule in making a Sanderson order is whether the
circumstances justify a particular unsuccessful defendant paying the successful defendant’s costs. On the facts, the court did not find that it was justified in doing
so for three reasons:
The court did, however, find that given the joint representation in the proceedings and the fact that all of the defendants advanced the same case, some
assessment must be made as to what proportion of the case concerned the claims advanced against the successful defendant. The court found that since it
assessed that the claim against the successful defendant only involved 15% of the time taken in the proceedings, the claimant should not have to bear more than
a 15% share of the costs incurred by the four defendants in their joint representation.
Which order will be made by the courts?
Other than in the context of the cases from which they originated, both orders have consistently been considered as part of dicta concerning the making of either
order, in that they did not involve any analysis of the particular payment method involved. In the absence of a clear demarcation in recent judgments between the
appropriate circumstances in which to apply one or the other, there is limited, though useful, dicta in Sanderson as to how they might be applied were there to be
an insolvency of (or, at least hypothetically, a strong credit risk known to be involved with) the unsuccessful defendant. In Sanderson, Stirling LJ referred to a
Bullock payment mechanism’s ‘mischievous’ effect under circumstances where an unsuccessful defendant is insolvent, showing sympathy with the cause of a
claimant were the latter were to be left out of pocket as a result. In developing the concept of the Sanderson order, he distinguished the circumstances in which a
Sanderson order should be made instead of a Bullock order in the following terms:
The change of practice [ie making a Sanderson order]… ought to be adhered to wherever it is practicable to do so… this practice is not applicable to a case
in which a judge holds that there is not good cause to deprive a defendant of costs against the plaintiff… and yet is of [the] opinion that the costs so
occasioned ought properly to be borne by another defendant [in which case] recourse may and ought to be had to the old practice [ie making a Bullock order].
Though Stirling LJ did not make, refer to or attempt to justify how, under such circumstances, essentially shifting the mischief onto a successful defendant would
be addressed, he made it clear in separate comments in his judgment that it was important to have regard to the circumstances of the case. As a result, it is not
possible to impute any intention on his part to establish the priority of a claimant’s financial interests over those of a successful defendant when the courts are
making an assessment as to whether a Bullock or Sanderson order is appropriate where an unsuccessful defendant is insolvent.
A recent case that returned to the consideration of this particular issue is BSkyB, in which Sir Blackburne addressed the ability of the unsuccessful defendant to
pay the costs of one of the successful defendants. In doing so, he seemed keen to ensure that the successful defendant was not deprived of its costs by virtue of
the unsuccessful defendant’s financial position (on the facts, the judge was satisfied there was no real risk and so made a Sanderson order). He made it clear that
as between the claims for costs against the unsuccessful defendant by each of the claimant and the successful defendant, the successful defendant’s costs should
be prioritised.
BSkyB provides dicta to the effect that the courts should consider any such situation involving a credit risk relating to the unsuccessful defendant by taking into
account the parties’ respective financial positions and then using their analysis of these to inform the types of order that they make. Since the case law in this area
has so far only touched on the issue hypothetically, there remains room for the development of further guidance by the courts as to which CDCO would be
appropriate to make under such circumstances. It is therefore a matter of ‘watching this space’ for the reasoning given in any decisions in the future which touch
on:
Conclusion
CPR r44.2(b) is a flexible provision which has usefully directed some of the reasoning given in case law analysing the appropriate circumstances for making
CDCOs. The criteria established by the courts are focused on delivering justice by both meeting the overriding objective and satisfying the factors under CPR
r44.4 where the courts see fit to exercise discretion as to costs under CPR r44.2(b).
The courts consider carefully whether the claimant has pursued two or more defendants in the alternative and whether it has shown reasonable conduct in doing
so. The satisfaction of these two criteria is essentially a prerequisite to a consideration of the other criteria established in Irvine. Satisfaction of all those criteria is
evidently a powerful way in which a claimant is able to lend weight to its application for a Bullock or Sanderson order.
It is clear that there is a wide discretion afforded by the CPR to the courts in deciding whether to depart from the general rule when making a CDCO. Gibson LJ in
Irvine referred to the fact that a CDCO is a ‘strong order, capable of working injustice to the defendant against whom the claim has succeeded’. The courts are
therefore charged with determining whether it is just and reasonable to make a CDCO on the basis of their review of the impact of doing so upon the financial
position of an unsuccessful defendant, as well as those of a claimant and a successful defendant. Only time will tell which of these parties (if any) the courts will
tend towards favouring as a matter of course when making their decisions in circumstances where an unsuccessful defendant is insolvent or attaches a substantial
credit risk. Nevertheless, it is clear that the facts of each case, and in particular the reasonableness of the parties’ conduct, will play a significant factor in
influencing the decisions made by the courts in this sphere.
• an order for costs in favour of the successful party is compensatory in nature and not punitive;
• to deprive the successful defendant of a costs order would not be just; and
• there was no indication that the joinder of the successful defendant was a result of anything which he or the council and the unsuccessful defendants did.
• whether a claimant’s or a successful defendant’s financial interests should be prioritised where an unsuccessful defendant is insolvent (or attaches a credit
risk); and
• any factors which influence the courts’ decisions in this context.
CASE(S) REFERENCED:
Bankamerica Finance Ltd v Nock [1988] AC 1002
British Sky Broadcasting Group plc & ors v Digital Satellite Warranty Cover Ltd (in Liquidation) & ors [2012] EWHC 3679 (Ch)
Bullock v The London General Omnibus Company [1907] 1 KB 264
Coward v Phaestos Ltd & ors [2014] EWCA Civ 1256
Irvine v Commissioner of Police for the Metropolis & ors [2005] EWCA Civ 129
Moon v Garrett & ors [2006] EWCA Civ 1121
Nichols v Singleton Council [2011] NSWSC 1517
Phonographic Performance Ltd v AEI Redifusion Music Ltd [1999] EWCA Civ 834
Sanderson v Blyth Theatre Company [1903] 2 KB 533
![COSTS: Sharing the blame | Legalease Law Journal Series - LawJournals.co.uk
http://lawjournals.co.uk/2015060572995/the-commercial-litigation-journal/costs-sharing-the-blame[10/06/2015 17:07:23]
HOME
JOURNALS
THE COMMERCIAL LITIGATION JOURNAL
EMPLOYMENT LAW JOURNAL
FAMILY LAW JOURNAL
PERSONAL INJURY LAW JOURNAL
PROPERTY LAW JOURNAL
PROCUREMENT & OUTSOURCING JOURNAL
TRUSTS AND ESTATES LAW & TAX JOURNAL
ARCHIVE
ADVERTISING
SUBSCRIPTIONS
CONTACT
INDICES
The Commercial Litigation Journal
05 June 2015
Andrew Kelmanson is a
trainee with Clyde & Co
LLP
‘Claimants
involved in multi-
party litigation may
apply to the courts
to make
discretionary costs
orders in
circumstances
where a claimant
succeeds against
one or more
defendants, but
does not succeed
against others.’
COSTS: Sharing the blame
Clyde & Co LLP
Issue: The Commercial Litigation Journal: May/June 2015
Andrew Kelmanson provides a timely reminder of the law behind co-defendant costs orders
Alongside determining the liability of the parties to proceedings, courts are also tasked with apportioning the costs of litigating between them. Under CPR r44.2(a),
the ‘general rule’ is that successful litigants are to recover their costs from unsuccessful litigants (court orders often refer to costs being ‘in the case’). This position
is far less straightforward when dealing with multi-party litigation involving a number of defendants who may be facing multiple claims.
Background
Part 44 of the CPR provides for specific circumstances where the ‘general rule’ does not apply (CPR r44.3) as well as for the courts
to exercise their discretion where they see fit (CPR r44.2(b)). The recent Court of Appeal case of Coward v Phaestos Ltd [2014], in
which the court ruled that trial judges have a wide discretion in ordering costs under Part 44 which is in no way constrained by the
costs rules under Part 36, confirms the unfettered scope which the courts have in making Part 44 costs orders.
Drawing on the guiding factors under CPR r44.4 in exercising their discretion, the courts often punish parties (and their advisors) for
failing to settle before trial or at least to control costs in circumstances where it would be reasonable for them to have done so (see
the discussion on the third criterion in ‘Satisfying the criteria’).
Though the consequence is uncertainty on how arguments as to costs will be treated by the courts, the CPR’s flexibility is designed
to facilitate justice between the parties. Claimants involved in multi-party litigation may, as a result, apply to the courts to make
discretionary costs orders in circumstances where a claimant succeeds against one or more defendants, but does not succeed
against others (co-defendant costs orders, or CDCOs). The mechanics of CDCOs take two different forms: a ‘Bullock order’ (Bullock
v The London General Omnibus Company [1907]) and a ‘Sanderson order’ (Sanderson v Blyth Theatre Company [1903]).
This article explores the substance and intentions of CDCOs; the criteria on which the courts base their decisions whether to make
CDCOs and examples of instances where these criteria have been applied; other relevant key issues, including circumstances in
which a Sanderson order is appropriate and the duty of care owed by a claimant’s solicitors in advising as to the joinder of
defendants; and the potential for case law in the area to develop further, particularly where an unsuccessful defendant is insolvent or
is a known credit risk.
Bullock and Sanderson orders
A Bullock order is an indemnity order that first requires the claimant to pay to the successful defendant the costs incurred by the
successful defendant in its defence. The claimant is then permitted to recover those costs (or a proportion of those costs) from an
unsuccessful defendant. Consequently, the claimant has the potential to be left out of pocket where, in pursuing an unsuccessful
defendant for those costs, it fails to recover them; for example, where an unsuccessful defendant is insolvent, or where there is a
charge over its assets.
A Sanderson order requires an unsuccessful defendant to pay directly to a successful defendant the costs incurred by a successful
defendant in its defence (or a proportion of those costs). For the claimant, this is the more favourable order of the two; the claimant
is excluded entirely from the payment mechanism involved in a successful defendant recovering the costs that it has incurred in
defending the action.
Satisfying the criteria
Neither order is appropriate in favour of a claimant who has sued both defendants because of a doubt as to the law as opposed to the facts, nor where the causes
of action against each are quite distinct, nor where the respective claims are not alternative, nor where they are based on quite different sets of facts.](https://image.slidesharecdn.com/6a9dc2ed-acee-480b-8ee3-ac08a7fa531b-150628172624-lva1-app6891/85/sharing-the-blame-clj-article-june-2015-1-320.jpg)
![COSTS: Sharing the blame | Legalease Law Journal Series - LawJournals.co.uk
http://lawjournals.co.uk/2015060572995/the-commercial-litigation-journal/costs-sharing-the-blame[10/06/2015 17:07:23]
In Irvine v Commissioner of Police for the Metropolis [2005] the Court of Appeal was tasked with determining whether the decision of a trial judge, who had refused
to make either a Bullock or Sanderson order, should be upheld. The Lords Justices concurred as to the four criteria, as set out by Gibson LJ in his judgment, that
the courts should consider above all others in order to be satisfied that they should make a CDCO:
Though Waller LJ in his judgment in the Court of Appeal case of Moon v Garrett [2006] made it clear that there are ‘no hard and fast rules’ in assessing the
appropriateness of making CDCOs, the above form the criteria which the courts will be guided by when deciding relevant cases. It is important to note that the
courts will only interfere with trial judges’ costs orders if it can be shown that they erred in principle in their approach or disregarded some relevant factor, or if their
decisions are plainly wrong (see Phonographic Performance Ltd v AEI Redifusion Music Ltd [1999]).
The successful defendant was sued in the alternative to the unsuccessful defendant
Pursuing a claim ‘in the alternative’ makes it more likely that a claimant can successfully pass on the costs of a successful defendant to an unsuccessful
defendant. In establishing this criterion, the reasoning given in Irvine drew on the judgment in Bankamerica Finance Ltd v Nock [1988] where Lord Brandon had
clarified that the court had the jurisdiction to make a Bullock or Sanderson order. Bankamerica concerned claims in which the claimant was bound to succeed in its
claim against one co-defendant but could not have succeeded against both.
Irvine interpreted the circumstances in Bankamerica to be no different in essence from those where proceedings involve a claimant seeking to sue a ‘foundation
defendant’ (the defendant against which a claimant perceives that it has its strongest claim, ie for maximal damages) and one or more additional defendants
(because it does not know which of two or more defendants should be sued for the wrong done). In either scenario, as long as the claimant demonstrates
reasonable conduct in joining additional defendants (see the discussion on the third criterion), a court will be able to consider whether to make a Bullock or
Sanderson order in favour of a claimant.
Even where claims are not issued in the alternative, the court has, by virtue of its wide discretionary powers, the ability to order one defendant to pay the costs of
another defendant owing to the ‘width of language of CPR r44(3)(1)’. In Irvine, however, Gibson LJ made it clear that ‘that is not the ordinary circumstances for a
Bullock or Sanderson order’.
The causes of action relied on against the defendants were connected with each other
A feature indicative of a particularly close connection between the causes of action against co-defendants is where they arise from identical facts. This factor is not
necessarily ‘determinative’ but is ‘a relevant consideration’. Where the claims are not truly alternative (in that they do not arise from an identity of facts), assuming
that it is possible for a claimant to show at least some such connection, the key consideration is the reasonableness of the claimant in originally joining the
successful defendant.
The claimant’s conduct in joining and pursuing a claim against the successful defendant was reasonable
This criterion is an ‘important’ consideration in the court’s exercise of its discretion as to whether to make a Bullock or Sanderson order.
A claimant is able to show that they have acted reasonably primarily by demonstrating that they have analysed the merits of pursuing more than one defendant, as
well as by pursuing defendants in the most cost-effective manner possible (which includes accounting for the value of the claim and any offers to settle that have
been made). In Irvine, the damages were agreed to be a total sum of £26,355, whereas the total costs of the four parties to the proceedings amounted to over
£100,000, which Gibson LJ criticised for being wasteful of the court’s time and resources.
An interesting contribution to the judicial commentary in the area came courtesy of British Sky Broadcasting Group plc v Digital Satellite Warranty Cover Ltd (in
Liquidation) [2012] (BSkyB), in which Sir William Blackburne referred to the impact on the costs award of the reasonableness of pursuing or defending particular
issues, and the manner in which they are pursued or defended. He referred to the dishonesty evidenced by two of the successful defendants in presenting their
cases, clarifying that irrespective of the successful defendants’ conduct, the ‘general rule’ should remain the usual starting point. He did however refer to the
‘tendency [for that misconduct] to create an unwarranted increase in the costs of the action to either or both of the parties’, suggesting that such conduct would be
considered in an assessment of the quantum of the legal costs payable to the successful defendant(s) by the claimant and/or unsuccessful defendant(s).
What is ‘reasonable’ in this context?
The courts have considered several factors in determining the parameters of ‘reasonable’ conduct when deciding whether to make a CDCO. These can be
summarised as:
Solicitors’ point of practice – best to err on the side of caution?
Claimants (and their advisors) may feel that the joinder of further defendants to an action has the potential to be a minefield in relation to costs considerations. The
courts’ treatment of cases on an individual basis (albeit within the framework of what are now seemingly streamlined criteria) means they may fear that although a
claimant could be successful against one or more defendants, the risk that they will be unsuccessful against further defendants may expose that claimant to
punishment by way of an unfavourable costs order if the court decides that the joinder of the unsuccessful defendants was unreasonable.
The practitioner may therefore be well advised to exercise caution when offering advice as to the joinder of a potential co-defendant where the merits of doing so
are unclear. This is particularly the case where the prospects of the claimant succeeding against that party are difficult to quantify because of the lack of
information available at the material time.
A County Court judgment of 20 September 2013, Sims v Carruthers, provides authority which addresses advisors’ potential concerns. The facts centred on the
claimant’s husband and his pilot, Mr Leigh, represented by the second defendant, being involved in a fatal collision between their light aircraft and an aircraft
piloted by the first defendant. The second defendant had originally applied to join a third defendant to proceedings, only to decide against doing so, after which the
claimant could not at the material time insist on disclosure of the second defendant’s report to determine whether it was reasonable for the claimant to join the
third defendant. Ultimately the claimant’s solicitors erred on the side of caution in joining the third defendant to the action (even though this could have exposed
the claimant to potential costs implications where joining the third defendant was deemed to be unreasonable on the facts).
The judge decided that, despite it becoming apparent that there was no evidence of liability attaching to the third defendant, at the time the second defendant
discontinued its action against the third defendant, it had been reasonable for the claimant to have joined the third defendant under the circumstances. The judge
therefore set aside the district judge’s order, instead making a Sanderson order in favour of the claimant, against the unsuccessful second defendant (for the
successful first defendant’s costs), as well as ordering that the unsuccessful party pay the claimant’s costs of pursuing the third defendant. It is a highly important
judgment from the practitioner’s point of view since it recognises that advisors should, where reasonable, err on the side of caution by joining several defendants to
proceedings. In such a way, they are able both to avoid injustice to their client as well as to protect themselves against optimistic allegations of negligence.
One defendant had put the blame on another defendant
(1) the successful defendant was sued in the alternative to the unsuccessful defendant;
(2) the causes of action relied on against the defendants were connected with each other;
(3) the claimant’s conduct in joining and pursuing a claim against the successful defendant was reasonable; and
(4) one defendant had put the blame on another defendant.
• Was there an (objectively) arguable claim? (This is likely to be influenced by the fact that at the stage of considering this question, the claimant will
inevitably have failed against the successful defendant.)
• Did the claimant gain some additional advantage by joining defendants beyond the foundation defendant? (If so, it suggests that doing so was a reasonable
course of action.)
• Did one defendant blame another?
• Has the claimant been successful, and, if so, to what extent?](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)