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Andrew Coates on a judgment which calls for Shell to bear its own trial costs despite winning a personal injury case. Andrew Coates is a partner at City insurance litigation firm Kennedys.
In a Judgment handed down by Mr Justice Jackson in the Liverpool District Registry on 15 February a successful defendant was ordered to bear its own costs of the action for acting unreasonably by contesting various issues up to trial.
In the case of Riley v Shell (UK) Ltd, the claimant brought an action for personal injury resulting from an incident in July 1992 when he tripped over a ship's rope at a jetty apparently operated by Shell.
In July 1993, in response to the claimant's letter before action, Shell wrote to the claimant's solicitor denying that it was either an occupier of the jetty or that it was responsible for the safe mooring of the ship.
When proceedings were served in 1995, Shell repeated the denials in its defence. It was not until the first day of trial in February this year that the company conceded it was one of the occupiers of the jetty and was responsible for safety on that jetty.
Although Shell won the case on liability, Justice Jackson ordered that there should be no order as to costs. This was because, firstly, a substantial part of these costs were found to relate to the unnecessary involvement of two other defendants and to the contesting of the above issues.
Secondly, according to the judge: "Shell acted unreasonably in contesting these matters and ought to be penalised." And finally, the claimant was a man of modest means, while Shell has substantial resources.
Justice Jackson said: "In the new climate of litigation it does behove parties to investigate carefully and fairly." He said that once it had become clear that Shell's true position was not set out either in correspondence or in the pleadings, a correction should have been made.
The court has sent a clear message that parties to an action and their advisers should not unreasonably maintain allegations or defences. If they do, the court will not be slow to penalise them.