HLB Kidsons (a firm) v Lloyds Underwriters (Policy No 621/PKID00101) & Ors

HLB Kidsons (a firm) v Lloyds Underwriters (Policy No 621/PKID00101) & Ors

The notification under the insurance policy was valid and covered all claims arising out of procedural difficulties exemplified by the two DOS cases, not just those cases themselves, but not the entire range of tax avoidance products. Underwriters were the overall successful party and entitled to their costs, subject to deductions for discrete abandoned issues. Indemnity costs were not justified. Interest on costs is awarded at base rate plus 1%. An interim payment of £1.2 million on account of costs is ordered. Camerons and Millers are liable for Underwriters’ costs only to the extent of additional costs caused by their participation, and only if Kidsons defaults, subject to a cap.

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 Insurance Dispute / Post Judgment Ruling on Costs and Clarification of Judgment
Outcome
Costs orders made; clarification of judgment; interim payment ordered; conditional costs liability for co-defendants.
Legal Topics
Notification of Circumstances Under Insurance Policy, Costs Orders, Interest on Costs, Indemnity Costs, Interim Payments, Third Party Costs Liability
Insurance Law Civil Procedure Notification of Circumstances Under Insurance Policy Costs Orders Interest on Costs Indemnity 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 Insurance Dispute / Post Judgment Ruling on Costs and Clarification of Judgment

Legal Issues

  1. 1 Clarification of scope of valid notification under insurance policy
  2. 2 Determination of costs liability between parties
  3. 3 Basis for indemnity costs

Ratio Decidendi

The notification under the insurance policy was valid and covered all claims arising out of procedural difficulties exemplified by the two DOS cases, not just those cases themselves, but not the entire range of tax avoidance products. Underwriters were the overall successful party and entitled to their costs, subject to deductions for discrete abandoned issues. Indemnity costs were not justified. Interest on costs is awarded at base rate plus 1%. An interim payment of £1.2 million on account of costs is ordered. Camerons and Millers are liable for Underwriters’ costs only to the extent of additional costs caused by their participation, and only if Kidsons defaults, subject to a cap.

Court Disposition

Costs orders made; clarification of judgment; interim payment ordered; conditional costs liability for co-defendants.

Orders

  • Kidsons to pay Underwriters’ costs on the standard basis, less £225,000 for discrete issues.
  • No indemnity costs awarded.