LM-2021-000173 - [2025] EWHC 2645 (Comm)

HDI Global Specialty SE (“HDI”) applies to be added as a defendant to this claim brought by Managed Legal Solutions Limited (“MLS”) against Mr Darren Hanison trading as Fortitude Law (Mr Hanison or “Fortitude”) as defendant.

HDI issued a policy of professional indemnity insurance to Fortitude with a limit of indemnity of £2,000,000. It is therefore interested in the outcome of these proceedings. Further, if MLS succeeds in this claim for damages against Fortitude/Mr Hanison and obtains a money judgment against him, and Mr Hanison is then made bankrupt, Mr Hanison’s rights under the policy will transfer to MLS under s.1 of the Third Parties (Rights against Insurers) Act 2010 (the “Third Parties Rights Act”).

The parties agree that the Court should be aware that there is a dispute about coverage under the policy issued by HDI to Mr Hanison and that HDI started a confidential arbitration over that dispute against Mr Hanison. MLS has participated in that arbitration, which has not yet concluded, and which has involved the stay of these proceedings at various points (as recited in court orders in November 2023, January 2024, March 2024 and June 2024).

MLS says that nothing further about the arbitration should be said, given its confidential nature. HDI disagrees. HDI further points out that no application was made to strike out any of the evidence filed on this application or to have this hearing listed in private; indeed, MLS’s reading list for the hearing included both witness statements filed by HDI in support of its application.

Early on in the submissions of Ms Padfield KC (Leading Counsel for HDI) at the hearing, she referred to the arbitration and Mr Wood (Counsel for MLS) referred to the fact that MLS maintained that the arbitration was confidential. It is necessary for this application, listed for half a day on Friday 3 October, to be decided promptly because of an upcoming hearing listed for 21 October 2025. I therefore asked Mr Wood whether I had understood correctly that MLS accepted that HDI has an interest in one of the issues arising in these proceedings (namely the issue identified in HDI’s draft Defence, whether Fortitude owed to MLS, a litigation funder, a freestanding tortious duty (the “Freestanding Tortious Duty issue”)). Mr Wood confirmed that MLS did accept this. I then indicated that it therefore seemed to me there was no need for the parties to refer in any further detail to the arbitration. The hearing proceeded on that basis, although Ms Padfield put on the record HDI’s position that the details of the arbitration could be referred to (because HDI said that material was relevant, it had been put in evidence and no application had been made to exclude it – indeed, MLS had invited the Court to pre-read all the evidence filed - so that it was now artificial for MLS to be saying that the relevant material was private and confidential).

HDI says it wishes to be joined to these proceedings to be heard on the Freestanding Tortious Duty issue. In advancing this application it says that there is a conflict of interest between it and Mr Hanison on this issue because, 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.

HDI’s application is for it to be joined as a second defendant to MLS’s claim and accordingly, in addition to an order to that effect, it seeks directions that (a) MLS file and serve an Amended Claim Form limited to the addition of HDI as a second defendant (as required by CPR 19.4(9)) and (b) HDI file and serve a Defence in the form of the draft exhibited to its evidence in reply on this application. The first paragraph of that draft Defence records that HDI “was added to these proceedings as a Second Defendant … for the purpose of addressing the issue of whether [Fortitude] owed [MLS] a direct duty of care as pleaded by MLS at paragraphs 18A and 20 to 22 and as referred to at paragraph 40 in the context of alleged breach of duty.”