Unreasonable insurers in motor claims: Davies v Forrett & Others

The recent case of Davies v Forrett & Others  once again highlighted the unreasonable conduct of some defendant insurance companies. It seems that they are intent to do anything but further the overriding objective. A point emphasised in this judgment.

The issue in the instant case concerned costs of Part 20 proceedings which had been brought by the insurers for the second defendant against the claimant who was a passenger travelling in the second defendant’s vehicle and their insured (the second defendant).

The claimant was seriously injured when the second defendant who had been overtaking other vehicles in front veered off the road and into a tree after the first defendant who was in front pulled out. There was no collision between the two vehicles and the first defendant drove off. The second defendant was also injured. Investigations subsequently revealed that the vehicle that caused the accident belonged to the first defendant, a fact which he disputed throughout. There was, however, compelling evidence against him and he was convicted for driving without due care and attention at the Magistrates court.

According to protocol and this being the most sensible course of action, the claimant first brought a claim against the first defendant, relying on his conviction as proof of negligence. However, the first defendant continued to deny liability and a decision was taken by the claimant to join the second defendant and his insurers as parties to the proceedings. It transpired that the motor policy issued by the second defendant’s insurers, the third defendant did not cover commuting to work and they made a Part 20 claim against him and the claimant seeking a declaration that they had no contractual liability to indemnify him as he had breached a term of the policy. Permission to include the first defendant to the claim was also sought, but declined.

Protracted litigation ensued with costs escalating as would be the norm in such circumstances. Both the claimant’s and the third defendant’s solicitors reminded the first defendant of the mounting costs at every opportunity, but this appeared to fall on deaf ears. Later an application for an interim payment was made by the claimant and succeeded, even though the first defendant still contested liability. The court was content that it was highly likely the claimant’s claim against the first defendant would succeed. Perhaps unsurprisingly, the claimant’s solicitors within a couple of days of this application, made an application for summary judgment. But it seems the court’s finding had little influence on the first defendant’s solicitors, as they continued to dispute liability on his behalf before, finally, less than a week before the hearing they saw sense and consented to judgment and agreed to pay costs of the application. This was three long years after the first defendant’s conviction.

And as was only to be expected in the circumstances, the court ordered the first defendant to pay the majority of the costs associated with the Part 20 proceedings as a non-party under s.51 of the Senior Courts Act 1981 since his conduct had necessitated the issuing of these proceedings. In addition, he was ordered to pay the claimant’s costs of bringing claims against the second and third defendants.

This was a classic case in which the vehicle insurers could have dealt with the claimant’s claim at the outset and then resolved the issue of indemnity between themselves. He was after all an innocent passenger who had no control over the actions of either of them. Insurers must not be blinded to the obvious in order to protect their financial interests. Otherwise, they will continue to learn the hard way.