Captain Nigel Collingwood & Anor v Irwin Mitchell LLP

MASTER TEVERSON :

1. On 24 June 2025 I handed down remotely my reserved judgment on two applications heard before me on 16 April 2025. A hearing in person to deal with consequential matters was listed before me at 9.30am on 27 June 2025. The principal issue at that hearing was the issue of costs. The form of order reflecting the outcome of the applications was also in dispute. This judgment is on the issue of costs and the form of order reflecting the outcome of the applications.

2. The two applications before me were an application by the Defendant by notice dated 11 December 2024 seeking an order for summary judgment pursuant to CPR 24.2 and/or strike out pursuant to CPR 3.4 on the whole of the Claimants’ claim and an application by notice dated 8 April 2025 by the Claimants for an order adding or substituting Rhealisation LLP as a defendant to these proceedings. The context of the applications was a professional negligence claim brought by the Claimants naming Irwin Mitchell “(formerly “Thomas Eggar LLP”)” as Defendant. I shall for convenience refer to the applications respectively as “the Summary Judgment Application” and “the Amendment Application”. The full background facts are set out in the judgment handed down on 24 June 2025 with the Neutral Citation Number: [2025] EWHC 1570 (Ch) .

3. The Summary Judgment application was advanced by the Defendant on two grounds. The first ground was that the correct defendant to the proceedings was Thomas Eggar LLP (now Rhealisation LLP) and not Irwin Mitchell. The second ground was that the claim was in any event time barred by the date when the claim was issued.

4. For the reasons set out in my judgment, I concluded (1) that it would be wrong to strike out or grant reverse summary judgment on the whole of the claim in favour of the Defendant on the grounds that the claim was statute-barred at the time the claim was issued; (2) that the claim was issued against the wrong defendant; (3) that the court had jurisdiction to substitute Rhealisation LLP as Defendant in place of Irwin Mitchell; (4) that the court should exercise its discretion to permit such a substitution; and (5) that the Claimants had no realistic prospect of claiming that Irwin Mitchell LLP was directly liable in law to them for the alleged professional negligence of Thomas Eggar LLP and accordingly paragraphs 4 and 5 of the Particulars of Claim should be struck out.

5. It was common ground between the parties that the court should exercise its discretion as to costs pursuant to CPR 44.2. CPR 44.2 provides:- “(1)The court has discretion as to- (a)whether costs are payable by one party as to another; (b) the amount of those costs; and (c) when they are to be paid. (2) If the court decides to make an order about costs- (a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order. (3) [not material] (4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including- (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply. (5) The conduct of the parties includes- (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction-Pre-Action Conduct or any relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended its case or a particular allegation or issue; (d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim; and (e) whether a party failed to comply with an order for alternative dispute resolution, or unreasonably failed to engage in alternative dispute resolution. (6) The orders which the court may make under this rule include an order that a party must pay- (a) a proportion of another party’s costs; (b) a stated amount in respect of another party's costs; (c) costs from or until a certain date; (d) costs incurred before proceedings have begun; (e) costs relating to a particular step in the proceedings; (f) costs relating only to a distinct part of the proceedings; and (g) interest on costs from or until a certain date, including a date before judgment. (7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph 6(a) or (c) instead. (8) Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.”

6. On behalf of the Defendant it was submitted that the Defendant, namely, Irwin Mitchell LLP (“Irwin Mitchell”), was the successful party on the Summary Judgment Application. The basis on which the Defendant argued it was the successful party on the Summary Judgment application was that the court found that there was no claim with a real prospect of success against Irwin Mitchell. It was submitted that if the Amendment Application had not been made, as it was, a week before the hearing, the claim, being a claim against Irwin Mitchell, would have been struck out or summary judgment granted.

7. I accept that the Defendant was successful on the issue as to whether Irwin Mitchell was directly liable to the Claimants but I do not accept that it is right to treat the Defendant as the successful party on the Summary Judgment Application. The Defendant did not succeed in having the whole claim struck out or dismissed. In particular, the Defendant did not succeed in having the whole claim struck out or dismissed pre-trial on the ground that it was statute-barred by the time the claim was issued.

8. In my view, looking at the outcome of the Summary Judgment Application as a whole, it is right to treat the Claimants as the successful party. The court did not grant summary judgment or strike out in favour of the Defendant on the claim as a whole. In substance that is what the Defendant was seeking to achieve. I accept that the lateness of the Amendment Application is material to the exercise of my discretion on costs but having attempted and failed to have the whole claim struck out or dismissed I do not accept that it is right to treat the Defendant as the successful party on the Summary Judgment Application.

9. The correct approach within the framework of CPR 44.2 is in my view to treat the Claimants as the successful party on the Summary Judgment Application on the ground that the whole of the underlying claim has not been dismissed or struck out and then to look at all the circumstances in order to decide whether the general rule that the unsuccessful party will be ordered to pay the costs of the successful party should be applied.

10. In my view, having regard to all the circumstances, this is clearly not a case in which the general rule should apply. The two most relevant circumstances are those relied on by the Defendant in support of its claim to have been the successful party. First, without the late Amendment Application, the underlying claim would have been struck out or dismissed as having been brought against the wrong defendant. Secondly, the Defendant was successful in having struck out those parts of the Particulars of Claim in which the Claimants sought to allege that Irwin Mitchell was directly liable to the Claimants as well as, or in addition to, the alleged professional negligence liability on the part of Thomas Eggar LLP.

11. In my judgment, on the Summary Judgment Application, the order which most fairly does justice between the parties is that there should be no order as to costs. The Defendant, Irwin Mitchell, did not succeed in having the whole claim struck out or dismissed. The argument that the claim should be struck out or dismissed pre-trial on the ground that it was statute-barred failed. This took up a significant amount of time in legal argument at the hearing and a significant number of authorities were cited. On the other hand, the Defendant succeeded in its argument that the wrong party had been sued with the result that the Claimants had to rely on the late Amendment Application in order to defeat the wrong party element of the Summary Judgment Application. The argument that Irwin Mitchell should recover its costs because it was put to the expense of removing itself from the claim would have been more persuasive had Irwin Mitchell limited itself to the wrong party ground.

12. I take a similar approach in relation to the Amendment Application. The Claimants were the successful party in that they were permitted to substitute Rhealisation LLP as Defendant for Irwin Mitchell. There are, however, compelling reasons to disapply the general rule. First, the need for the Amendment Application was brought about by the Claimants failure to notify the Defendant of the intended claim prior to the issue of the claim form or at any time prior to 3 September 2024. Secondly, the need for the Amendment Application arose from a misapprehension on the part of the Claimants, or their professional advisors, that Thomas Eggar LLP had become Irwin Mitchell LLP. Once this mistake was pointed out, the Claimants should have sought permission to substitute Rhealisation LLP as Defendant and not sought to maintain that Irwin Mitchell LLP was or might be directly liable to them.

13. Further, the Amendment Application was not made until 8 April 2025. On 8 April 2025 the Defendant was served with the Amendment Application together with the witness statement of Ms Bond running to 88 paragraphs with 73 pages of exhibits. It was unclear whether the Claimants were seeking the addition of Rhealisation LLP as a Defendant or the substitution of Rhealisation LLP as a Defendant for Irwin Mitchell LLP. In my view, the Defendant did not act unreasonably by contesting the Amendment Application. The lateness of the Amendment Application was part of a consistent pattern on the part of the Claimants of leaving everything until the very last moment.

14. The Claimants have in turn made a number of criticisms of the Defendant’s conduct. These need to be seen in the context of the extreme delay on the part of the Claimants in putting the Defendant on notice of the claim. I do not think it was unreasonable for the Defendant in the circumstances to require service of the claim form and to agree only to a two month extension of time to serve the Particulars of Claim given the delay on the part of the Claimants in notifying the Defendant of a professional negligence claim.

15. In my view, looking at all the circumstances, the Defendant is correct that in relation to the Amendment Application there should be no order for costs.

16. It was drawn to my attention during the hearing on 27 June 2025 by the Claimants that on 8 April 2025 on the same day as serving the Amendment Application and Ms Bond’s witness statement, the Claimants made an offer marked ‘Without prejudice save as to costs’. The Claimants sought Irwin Mitchell’s agreement that Rhealisation LLP be substituted as the Defendant to the proceedings pursuant to CPR 17.1 and 19.4; that the Summary Judgment Application be withdrawn and that there be no order as to the costs of the Summary Judgment Application. Kennedys responded to this offer on 15 April 2025 pointing out that the Summary Judgment Application was made in December 2024 and that only one week before the Summary Judgment Application was due to be heard, they had received the Claimants’ application for substitution accompanied by a 17 page witness statement. They said they had had to focus their efforts on reviewing the application, advising their clients, preparing an updated skeleton argument and preparing an updated bundle for the hearing. They said they had not therefore had the opportunity to engage on a without prejudice save as to costs basis. They said they were however instructed to make a “drop hands” offer to the Claimants.

17. In my view the Claimants’ ‘Without prejudice save as to costs’ offer was made too late and too close to the hearing date for its non-acceptance to have costs consequences. It was made at the same time as service of the Amendment Application. In the case of Part 36 offers, the general rule is that they should be made at least 21 days before the start of a trial. A late offer does not attract the usual Part 36 consequences. In the present case, not only was the Claimants’ without prejudice save as to costs offer made only eight days before the hearing but it was served together with the Amendment Application. The Amendment Application plainly required detailed consideration by the Defendant and its advisors and generated additional work in preparing for the hearing.

18. In relation to the terms of the draft order, I take the view that the order should record that the Summary Judgment Application was dismissed and the Amendment Application allowed on terms that paragraphs 4 and 5 of the Particulars of Claim are struck out. It should then contain directions. I have amended the draft order accordingly.

19. This judgment will be handed down remotely without attendances required at 10am on Friday 18 July 2025. I would be grateful to receive any typographical corrections from counsel in a single email by 4pm on Tuesday 15 July 2025.