It is not uncommon in multi Defendant cases for a Claimant to need to discontinue against one or more Defendants. However, in the case of BAE Systems Pension Funds Trustees Ltd v Bowmer & Kirkland Ltd  EWHC 1222 (TCC) Mrs Justice Jefford highlighted the issues faced by Claimants and refused the Claimant’s Application for an Order that it should not have to pay the costs of a Defendant it discontinued against or that the remaining Defendants should be liable for those costs.
The Claimant was the freehold owner of a building and was not directly involved in the original construction of the building (a warehouse). Construction took place in 2004, however warranties were given, which operated as deeds, and the limitation period was in 2016. Unfortunately there were certain defects in the building and shortly before the expiry of the limitation period the Claimant issued proceedings against a number of parties involved in the construction. This is common practice for Claimant’s particularly where there are issues with a limitation period being close or where there are concerns regarding the indemnity or insurance position of proposed Defendant’s.
The Claimant made the Application pursuant to CPR Part 38.6 which states that the Claimant will pay the costs of a Defendant against whom he discontinues unless the Court otherwise orders. In this case the Claimant wanted the Court to Order that the costs relating to the discontinued Defendant be paid by the other Defendant in the action.
This case highlights that whilst CPR Part 38.6 states “unless the Court otherwise orders” this in fact is difficult to overcome. In particular Mrs Justice Jefford stated that the Claimant could not be criticised for issuing against multiple Defendants in this case and that at the time of issuing it was unclear as to whether Geortherma (the party to which the Claimant was seeking an alternative costs order to the usual under CPR 38.6) had been involved in the work that the Claimant now believed to be defective. However Mrs Justice Jefford highlighted the fact that when taking the approach that the Claimant had, then they took on the risk that the Proceedings against one or more of those Defendants may transpire to be inappropriate.
Subsequently, Mrs Justice Jefford highlighted in her Judgment that a Claimant simply being reasonable in issuing against a number of Defendants was not a reason for displacing the normal principles in relation to costs. A late-issuing Claimant has to accept the risks in relation to suing a number of Defendants and the potential costs ramifications. As a result the Court refused to order “otherwise” and the Claimant remained liable to pay the costs of the Defendant against whom it had discontinued.
From a practical point of view this case highlights the need for early investigations into potential Defendants. Practitioners must be aware of the potential ramifications however reasonable it may have been at that time to issue against certain Defendants, if a notice of discontinuance is then required then there are going to need to be exceptional circumstances to persuade a Court to order “otherwise” and depart from the usual rules in line with CPR Part 38.6.