The Issues

The defendant, Mr Leighton Jones, was co-tenant with Ms Gibson and they brought a claim for disrepair against their landlord, Mr Francis, who then counterclaimed for rent arrears.

Mr Jones & Ms Gibson’s Solicitor obtained ATE Insurance from the claimant, ARAG Plc, for Ms Gibson only.

Following judgment of their housing disrepair claim, The defendant and Ms Gibson were ordered to pay their landlord's costs which were eventually agreed at £40,000.

The Solicitor submitted a claim on the ATE policy however they then ceased acting for both Mr Jones and Ms Gibson, who subsequently instructed Robertson’s Solicitors.

The claimant paid Mr Francis’ costs on 20 March 2019 and on or around the same date, they also paid £1,200 to a firm of costs lawyers who they had instructed.

On 14 June 2019 proceedings commenced and the claimant was claiming a contribution from the defendant of one half of the costs (£20,000) and one half of the costs draftsman’s fee (£600 inc of VAT).

HHJ Keyser QC determined that there were three issues to be considered:

1. “Did the facts give to Ms Gibson a cause of action for a contribution from the defendant?”
2. “…Is a claim on that cause of action barred by limitation of time?”
3. “ If a claim for contribution is not statute-barred, is the claimant entitled to bring the claim?”

Held

1. It was held that the agreed facts do give Ms Gibson a cause of action for a contribution from the defendant. They were joint debtors in respect of the costs liability and accordingly there is a common law right to contribution to the extent that Ms Gibson paid more than one half of the debt.  The claim for contribution of one half of the costs lawyers’ bill however fails at this first point. The claimant (ARAG) instructed the cost lawyers and incurred the bill of £1,200, which they paid. The instruction was not given jointly and even if the defendant benefited from the work of the costs lawyers he is not under any obligation to share the bill.
    
2. Judge Keyser held that the claim for contribution in this case lies at common law and is not subject to the limitation period in section 10 of the 1980 Act (which the defendant tried to argue).
    
3. The court order of 17 March 2016 imposed on Ms Gibson and the defendant a joint and several liability to pay to Mr Francis £40,000 for his costs. By making payment to Mr Francis the claimant discharged Ms Gibson's liability. Therefore, Ms Gibson has paid the entire £40,000 and should be entitled to recover £20,000 from the defendant. Because she discharged the costs liability by means of an insurance policy, the insurer, the claimant, is entitled to recover one half of the costs paid to Mr Francis.
   
   HHJ Keyser QC concluded that the claimant is entitled to bring a claim by subrogation for one half of the costs paid. Judgement for £20,000.
   
   The Defendant then sought damages of £20,000 from his original Solicitor due to their negligence of not naming him on the ATE Insurance certificate.

The full judgement can be found here

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