19 February 2019
Liability insurers’ exposure to s51 non-party costs orders: Various Claimants v AIG (Europe) Limited  EWHC 34 (QB)
In what circumstances is a liability insurer, standing behind a defendant to litigation, vulnerable to a non-party costs order in the claimant’s favour under section 51 of the Senior Courts Act 1981? In May of 2018, the Court of Appeal considered that question in respect of a standard product liability policy: Travelers Insurance v XYZ  EWCA Civ 1099;  Lloyd’s Rep 636. In Various Claimants v AIG (Europe) Limited  EWHC 34, Foskett J ordered a professional indemnity insurer, issuing a primary layer ‘Minimum Terms’ policy to the law firm, Giambrone & Law, to pay 50% of the Claimants’ costs pursuant to section 51. The Judge’s decision is considered by Jamie Smith QC of 4 New Square.