HLB Kidsons (a firm) v Lloyds Underwriters (Policy No 621/PKID00101) & Ors [2007] EWHC 2699 (Comm) (22 November 2007)

HLB Kidsons (a firm) v Lloyds Underwriters (Policy No 621/PKID00101) & Ors [2007] EWHC 2699 (Comm) (22 November 2007)

The notification made by Kidsons was effective to notify procedural difficulties affecting Discounted Option Schemes generally, not just the two specific cases, but not the wider range of tax avoidance products. Underwriters were the overall successful party and are entitled to their costs, subject to a deduction for discrete issues abandoned by Underwriters. Interest on costs is awarded at base rate plus 1%. Kidsons must make an interim payment of £1.2 million on account of costs. Camerons and Millers are liable for a capped proportion of Underwriters' costs only if Kidsons defaults, limited to additional costs caused by their participation.

Citation
[2007] EWHC 2699 (Comm)
Parties
Claimant: HLB Kidsons (A Firm); Defendants: Lloyds Underwriters subscribing to Lloyds Policy No 621/PKID00101 & Others
Jurisdiction
England and Wales
Judgment Date
22 November 2007
Procedural Posture
Commercial Court Post Judgment Ruling / Post Judgment Matters Including Costs
Outcome
Costs order in favour of Underwriters, with deductions; interim payment ordered; conditional third party costs liability for Camerons and Millers.
Legal Topics
Notification of Circumstances Under Insurance Policies, Costs Orders, Interest on Costs, Interim Payments, Third Party Costs Liability
Insurance Law Civil Procedure Notification of Circumstances Under Insurance Policies Costs Orders Interest on Costs Interim Payments Third Party Costs Liability

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Parties

HLB Kidsons (A Firm)

Claimant

Lloyds Underwriters subscribing to Lloyds Policy No 621/PKID00101 & Others

Defendants

Procedural Posture

Commercial Court Post Judgment Ruling / Post Judgment Matters Including Costs

Legal Issues

  1. 1 Scope of notification under insurance policy for Discounted Option Schemes (DOS)
  2. 2 Whether notification was effective as to all procedural difficulties or only specific cases
  3. 3 Entitlement to costs and basis of assessment

Ratio Decidendi

The notification made by Kidsons was effective to notify procedural difficulties affecting Discounted Option Schemes generally, not just the two specific cases, but not the wider range of tax avoidance products. Underwriters were the overall successful party and are entitled to their costs, subject to a deduction for discrete issues abandoned by Underwriters. Interest on costs is awarded at base rate plus 1%. Kidsons must make an interim payment of £1.2 million on account of costs. Camerons and Millers are liable for a capped proportion of Underwriters' costs only if Kidsons defaults, limited to additional costs caused by their participation.

Court Disposition

Costs order in favour of Underwriters, with deductions; interim payment ordered; conditional third party costs liability for Camerons and Millers.

Orders

  • Kidsons to pay Underwriters' costs on the standard basis, subject to a deduction of £225,000 for discrete issues.
  • Interest on costs at 1% above base rate from date of payment until judgment.