![LM-2021-000173 - [2025] EWHC 2645 (Comm)](https://backend.juristeca.com/files/emisores/logo_WAai98v.png){kind=logo}
Conclusions
Does the application satisfy the requirements of CPR 19.2?
CPR 19.2(2) provides that –
“the court may order a person to be added as a new party if –
(a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or
(b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.”
Both Ms Padfield KC and Mr Wood referred me to the Court of Appeal’s decision in In re Pablo Star [2018] 1 WLR 738 as the leading case on CPR 19.2. In that case, Sir Terence Etherton MR (with whom Longmore and Irwin LJJ agreed) approved, at [52], the statement made by Tuckey LJ in In re Blenheim Leisure (Restaurants) Ltd [2000] BCC 554 at 557, as follows:
“the provisions of what are now CPR 19.2(2) ‘are drawn in wide general terms to ensure that parties whose rights may be affected by a particular decision have a right to be heard.’”
The Master of the Rolls went on to say at [60] that:
“In considering whether or not it is desirable to add a new party pursuant to CPR 19.2(2) two lodestars are the policy objective of enabling parties to be heard if their rights may be affected by a decision in the case and the Overriding Objective in CPR Part 1.”
As I have set out above, it is common ground that HDI has an interest in the outcome of these proceedings. There is therefore “an issue involving the new party [HDI] and an existing party [Mr Hanison and MLS] which is connected to the matters in dispute in the proceedings” for the purpose of CPR 19.2(2)(b), namely the Freestanding Tortious Duty issue.
Mr Wood relied on Vatistas v Betta Oceanway Company [2025] EWCA Civ 595 in support of his submission that it is nonetheless not desirable to join a third party who will only be indirectly affected. In that case Males LJ said at [37] that the condition that it be “desirable” for a third party to be joined –
“operates as a control mechanism to ensure that a third party is not permitted to gatecrash proceedings in which he has no legitimate business, where his presence would unduly complicate or add to the cost of the proceedings or where his presence would add nothing because the relevant issues are being contested by the existing parties”.
Ms Padfield submits (in summary) that:
Where there is no conflict of interest between the liability insurer and the insured, the liability insurer may be able to protect its rights through the exercise of a contractual right to control the defence of the claim brought by a third party against the insured.
The insurer’s ability to exercise these rights is, however, limited including by an obligation to act “in good faith in the interest of the assured qua the defendant to insured claims” because the insurer’s contractual right is “to direct the conduct of litigation in his assured’s interest” (Travelers Insurance Company Ltd v XYZ [2019] UKSC 48, [2019] 1 WLR 6075 at [115-116] per Lord Sumption).
An insurer cannot therefore protect its interests by exercising its contractual right to control the insured’s defence of liability proceedings brought by a third party where there is a conflict of interest between the insurer and the insured.
In such circumstances, an insurer is a third party whose rights are directly affected by the liability proceedings against the insured and it is well-established it may be added as a defendant to make submissions in its own interest, not those of the insured.
In support of that last proposition, Ms Padfield cited the following authorities:
Cameron v Liverpool Victoria Insurance Co Ltd [2019] UKSC 6, [2019] 1 WLR 1471. That case concerned s.151 Road Traffic Act 1988 under which a motor vehicle insurer must, subject to the other provisions of s.151, satisfy a judgment obtained by a third party notwithstanding that the insurer may be entitled to avoid or cancel the relevant insurance policy. At [23] Lord Sumption said (Lords Reed, Carnwath, Hodge and Lady Black agreeing) that:
“Given its contingent liability under section 151 of the Road Traffic Act 1988, the insurer no doubt has a sufficient interest to have itself joined to the proceedings in its own right, if it wishes to be. That would authorise the insurer to make submissions in its own interest, including submissions to the effect that the driver was not liable.”
In Wood v Perfection Travel Ltd [1996] IRLR 233, CA, the claimant was injured in a helicopter accident and brought a claim for damages against the owners of the helicopter. The helicopter was insured under a hull liability policy. The insurers wanted to argue that the insured was not liable to the claimant, and that they were not liable to indemnify the insured under the policy because they were entitled to rely on an exclusion clause. They applied to be joined as a second defendant pursuant to RSC O.15 r.6(2). (Although that rule was differently worded to CPR 19.2(2), the Court of Appeal in In re Pablo Star at [52] approved the view that the correct approach to the two provisions is the same.) The Judge gave leave, saying that,
“It is plainly just that the insurers should be able to contest the issue of liability without prejudicing any points that they may wish to take under the insurance policy itself.”
The Court of Appeal endorsed that conclusion, saying that they
“consider[ed] that justice requires that the insurers should be permitted to take that course which will enable them to challenge both their assured’s liability to the plaintiff and their liability to their assured.”
In KR v Royal & Sun Alliance plc [2006] EWHC 48 (QB), [2006] Lloyd’s Rep IR 327, third party claimants claimed against an insurer after a transfer of rights pursuant to s.1 Third Parties (Rights against Insurers) Act 1930. The judgment records at [5] that in relation to an earlier liability trial before Connell J (“the company” being the insured):
“The company had gone into voluntary liquidation on 6 March 1997, did not attend during the trial before Connell J and took no part in the litigation. The insurer attended and actively took part in the trial as described by Connell J in para 3 of his judgment.
… in due course solicitors (for the insurer) … gave notice to the claimants’ solicitors of a potential conflict of interest arising out of an exception clause in the contract of insurance which they had entered into with (the company). As a result (the insurer) might be entitled to refuse to indemnify (the company) against any judgment entered against them in these claims. Accordingly (the insurer) was added as second defendant and it has contested each claim through leading and junior counsel. It has advanced no positive case, save in the claim by JS, but equally has made few concessions and has required each claimant to prove their claim.”
Addressing these authorities on behalf of MLS:
Mr Wood pointed out that Cameron v Liverpool Victoria was not a case concerning an application to join an insurer but to join a third party, and noted that s.151 of the Road Traffic Act 1988 meant that it was common for insurers to be joined as defendants to claims by third parties relating to road traffic accidents but that was a different statutory and factual context, and that in such cases the insurer was usually joined at the outset, or soon after the outset, of proceedings.
Mr Wood pointed out that in Perfection Travel, the insurer applied for joinder very promptly and in circumstances where the insured was taking no part. The court permitted the joinder of the insurer because it found the plaintiffs and the insurers were “the true protagonists”. Here, Mr Wood says, the true protagonist is Mr Hanison: MLS is seeking judgment against him and not against HDI.
As to KR v Royal & Sun Alliance, Mr Wood submitted that the judgment reported is not the judgment on the joinder application and that it is unclear from the report when or how the insurers came to be joined, but that they seemed to have joined more or less from the outset, there was nothing to suggest their joinder was not by consent, and (Mr Wood said) the insurer did not advance a positive case. (In fact, the report records the Judge saying that the insurer had not advanced a positive case “save in the claim by JS”.) Mr Wood submitted this case is different because HDI is seeking to be joined because Mr Hanison has been debarred from defending.
Despite the points rightly made by Mr Wood, these authorities (in particular, Wood v Perfection Travel) show that there is jurisdiction in an appropriate case to add an insurer to the liability proceedings against the insured, to make submissions in the insurer’s own interest where there is a conflict of interest between the interests of the insurer and the insured.
There is no dispute that HDI has an interest in the Freestanding Tortious Duty issue. It is clear that that issue will not be contested in these proceedings unless HDI is joined. Mr Hanison has been debarred from defending and, unless HDI is joined, MLS will only have to discharge the burden on it to prove its case at an uncontested hearing. Applying the approach set out in In re Pablo Star, it is therefore “desirable” to join HDI to enable it to be heard on the Freestanding Tortious Duty issue, unless there are factors relevant to the overriding objective which sufficiently weigh against its joinder.
Mr Wood submits that the manner and timing of HDI’s proposed joinder mean that it is not “desirable” to add HDI. He made eight points in his skeleton in support of this submission.
Delay
First, Mr Wood says that HDI has delayed in making this application. I have summarised the procedural chronology above. Mr Wood says that HDI’s reliance on the debarring order made against Fortitude (which HDI learnt of shortly before issuing this application) is a red herring for the purpose of explaining why this application is being made so late in the proceedings because the Freestanding Tortious Duty issue has been in play since October 2023 (at the latest) when the relevant amendment was made to the Particulars of Claim, and that there is therefore no proper basis for HDI delaying making this application until June 2025.
Ms Padfield says that the debarring of Mr Hanison/Fortitude is the relevant trigger for the making of this application. It was HDI learning of the November 2024 order providing that Mr Hanison be debarred unless he provided an address for service that led to the 17 February 2025 letter from HDI’s solicitors asking MLS’s solicitors if he had in fact been debarred, and once HDI learnt of the current position (by the telephone conversation of 2 June 2025), it notified MLS within 2 days of its intention to make this application.
Given that HDI also rely on the conflict of interest between Mr Hanison and HDI in relation to this issue – as set out above, HDI says that if MLS succeeds on any issue(s) and obtains a money judgment against Mr Hanison, then it is in Mr Hanison’s interest for those issues to include the Freestanding Tortious Duty issue, because he is then likely to be entitled to an indemnity under the insurance policy, whereas it is in HDI’s interest for MLS to fail on the Freestanding Tortious Duty issue in any event, because HDI is then unlikely to have to indemnify Mr Hanison – I asked Ms Padfield why the debarring order was relevant, because that conflict has been in existence for as long as the Freestanding Tortious Duty issue has been in play in the proceedings. Mr Wood’s submission on this point was that HDI had effectively manufactured a conflict of interest to put itself in a better position that Mr Hanison/Fortitude.
Ms Padfield’s answer to that question was that the fact of Mr Hanison being debarred was what made the difference, because the Freestanding Tortious Duty issue was in fact being defended until Mr Hanison stopped defending the claim.
HDI is right to say that although there is a conflict between the interests of Mr Hanison and HDI in the terms HDI identify, there was no conflict which required HDI to be separately represented while Mr Hanison was maintaining his defence of the claim. There is no reason to believe that he would have stopped maintaining any part of his pleaded case if he had continued to take part in the proceedings: his Amended Defence contained a denial of the existence of the Freestanding Tortious Duty. There was no suggestion in argument that there would have come a point in the proceedings, if Mr Hanison had continued to defend the claim, when he would have stopped denying that particular allegation. It seems to me that no such argument could have been advanced because the conflict identified is not of the type that would give rise to such an opportunity.
Thus MLS is right to say that it is not (or at least not only) the conflict of interest between HDI and Mr Hanison that makes this application necessary to protect HDI’s interest; if it were, the application would have been made at an earlier stage in the proceedings. However, that supports HDI’s case that the fact that Mr Hanison is no longer defending MLS’s claim at all makes a relevant difference.
I therefore accept HDI’s submission that, for the purposes of the delay argument made by MLS, the debarring of Mr Hanison/Fortitude from defending the claim is the relevant trigger.
I also accept HDI’s submission that in all the relevant circumstances, the timing of HDI’s application does not make HDI’s joinder “undesirable”. HDI’s solicitors wrote on 17 February 2025 to MLS’s solicitors asking for information as to whether Mr Hanison/Fortitude had been debarred; whether MLS had applied, or intended to apply, for a trial date; and what MLS’s intentions were in relation to these proceedings and the coverage arbitration if Mr Hanison was no longer defending this claim. HDI’s solicitors received no answer to that letter (and chasing correspondence) until their telephone call to MLS’s solicitors on 2 June 2025, at which point they also learned that MLS’s solicitors had (since receiving HDI’s correspondence) applied for a trial date. HDI applied promptly at that point for joinder, and it was as a result of listing issues that the application was not heard until Friday 3 October 2025. MLS has thus been aware since (at least) 17 February 2025 that HDI were trying to follow the course of these proceedings and MLS decided to take the steps it did (including applying for the forthcoming hearing) in light of that knowledge.
HDI should not be in a materially stronger position than its insured
Mr Wood submits that HDI should not be joined because by its joinder it seeks to avoid the adverse consequences of the debarring order made against Mr Hanison/Fortitude. Given that it is common ground that HDI has an interest of its own in the Freestanding Tortious Duty issue, it does not seem to me that this provides a reason why HDI should not now be joined to defend that issue. Some of the points made on this issue are really points going to the delay argument I have addressed above.
I consider the submission that HDI is not the “real party interested” in the claim because Mr Hanison still has a real interest is not correct because of the conflict of interest that exists between Mr Hanison and HDI in this situation over the Freestanding Tortious Duty issue. Mr Wood submits that the facts of the Vatistas case, where joinder was permitted because the existing parties both sought a declaration a debt was due from one to the other, in circumstances where the economic consequences would be visited solely on the proposed new party, are as far removed as they could be from the facts of this case. I do not consider that that is correct: here, if HDI takes no part in the proceedings, it is in the interests of MLS and Mr Hanison (albeit he is currently taking no part) for the Freestanding Tortious Duty issue to be decided against Mr Hanison if the claim generally is being decided against him. It is certainly in the interests of MLS for that issue to be decided against Mr Hanison, in circumstances where the consequences of that decision will be visited on HDI.
The facts of Wood v Perfection Travel are also relevantly similar to the facts here, because there the insurer was joined because, were it otherwise, its insured would make no attempt to defend the claim and the claimant would obtain judgment in default. Here, although the claim was for some time defended, Mr Hanison is not now defending (and has been debarred from doing so), and if HDI is not joined, the Court will not hear argument from any opposing party on MLS’s claim on the Freestanding Tortious Duty issue.
Not unfair for HDI to be in no better position than Fortitude
Mr Wood submits that there is “nothing unfair about HDI being put in no better position than Fortitude, so far as the claim is concerned”. That seems to me to be wrong given (a) MLS’s acceptance that HDI has an interest in the Freestanding Tortious Duty issue and (b) the fact that, as matters now stand (following the debarring order), HDI is in a clear position of conflict with Mr Hanison/Fortitude over that issue. Mr Wood’s written and oral submissions on this argument focused on the terms of the insurance policy are, it seems to me, inconsistent with MLS’s acceptance (recorded above) that HDI has an interest in the Freestanding Tortious Duty issue, or at least fail to give sufficient weight to that fact. Mr Hanison/Fortitude has been debarred (following the withdrawal of his solicitors) by reason of his failure to comply with court orders. HDI has not failed to comply with court orders and if it is otherwise appropriate for it to be joined, it seems to me it would therefore be unfair for it to be in no better position than Mr Hanison/Fortitude.
An insurer can in an appropriate case step into the insured’s shoes
Mr Wood submitted in his skeleton that an insurer was permitted to step into the shoes of its insured in appropriate circumstances. Given that HDI must have known of Fortitude’s lack of engagement with its solicitors since at least October 2024, he submitted that it should not at this late stage be permitted to broaden the scope of the matters in issue and, if it had wanted to run any of the arguments pleaded by Fortitude, it ought to have explained why the debarring order should be lifted in respect of those arguments.
I have addressed above (a) the delay argument and (b) why it is not unfair for HDI not to be subject to the debarring order made against Mr Hanison/Fortitude. In light of my decision on those issues, it seems to me that it is appropriate for HDI now to be permitted to plead a defence on the Freestanding Tortious Duty issue, something which it has provided in draft to MLS and filed in its evidence in support of this application.
The only criticism of the draft Defence made by MLS was that it was said (in MLS’s skeleton) that HDI had not adequately defined the issue which it wished the Court to resolve. This submission was not advanced orally and it seems to me that, in its draft Defence, HDI has adequately identified the issue on which it wishes to defend MLS’s claim.
HDI is in fact making common cause with its insured
The fifth argument advanced in MLS’s skeleton is that HDI is, while cherry-picking the arguments it wishes to make, nonetheless making common cause with its insured. For the reasons set out above in relation to the conflict of interest which now clearly exists between HDI and Mr Hanison/Fortitude on the Freestanding Tortious Duty issue, and the reasons under the previous sub-heading (iv) above, I do not consider that this argument is a reason which weighs against joinder.
Would set a dangerous precedent to permit an insurer to be joined in these circumstances
Mr Wood submitted that it would set a dangerous precedent to allow HDI to be joined in these circumstances. It does not seem to me that that is correct. This is an unusual situation, in particular because (a) Mr Hanison/Fortitude was defending the claim (including defending the issue in which HDI is interested) but has now been debarred from defending, and (b) it is common ground that HDI has an interest in the outcome of these proceedings which will not be advanced unless it is joined.
Serious conceptual difficulties in navigating HDI’s participation and how it might affect findings in relation to Fortitude
Contrary to MLS’s submissions, HDI’s joinder as second defendant would not raise serious conceptual difficulties: (a) HDI has pleaded its case on the issue on which it wishes to make submissions and (b) it is not debarred from defending the claim on that issue, MLS has not suggested on this application that the effect of the debarring order is that HDI is debarred by reason of that order, and nor is that position unfair, for the reasons set out above.
Overriding Objective supports MLS’s argument that joinder should be refused
I accept that this application involves consideration of the overriding objective and that the result of a decision to join HDI as a second defendant will be to make it impossible to retain the hearing date fixed for MLS’s application. For the reasons set out above in relation to MLS’s argument about delay, I do not consider that in all the circumstances of this case, including MLS’s decision to proceed to list that hearing in circumstances where it was aware of HDI’s interest in the current status of the proceedings and had failed to reply to HDI’s correspondence asking what the current position in the proceedings was, that is a factor which means the application should be refused.
For all the reasons set out above, HDI’s application to join the proceedings as a second defendant is granted, and I will direct that (a) MLS file and serve an Amended Claim Form limited to the addition of HDI as a Second Defendant and (b) HDI file and serve a Defence in the form of the draft served on MLS on 14 July 2025 in the form of an exhibit to Mr Glassey’s second witness statement.