Neutral Citation Number: [2010] EWHC 2679 (Comm)
Case No: FOLIO 309 OF 2008
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 26/10/2010
Before :
THE HON MR JUSTICE COOKE
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Between :

	Greene Wood McLean LLP (in Administration)	Claimant	
	- and -		
	Templeton Insurance Limited	Defendant	
			
	And by additional claim		
			
	(1) Templeton Insurance Limited	Defendant	
	(2) Nellie Beardall	Third Party	
	(3) Peter Cooke	Fourth Party	
	And		
	(1) Green Wood & McLean LLP (in Administration)	Claimant	
	(2) Oliver Campbell	Fifth Party	
	(3) Andrew Prynne	Sixth Party	
	And		
	(1) Greene Wood & McLean LLP (in Administration)	Claimant	
	(2) QBE Insurance (Europe Limited)	Seventh Party	
- - - - - - - - - - - - - - - - - - - - -
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Mr Ronald Walker QC (instructed by CMS Cameron McKenna LLP) for the Claimant
Mr Derek Sweeting QC and Mr Timothy Walker (instructed by Nelsons LLP) for the Defendant
Mr Michael Pooles QC and Amanda Savage (instructed by Withers LLP) for the Fifth and Sixth Parties

Hearing dates: 5-7, 11-14 October 2010 
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Judgment

Mr Justice Cooke : 

Introduction
1.	In this action there are a number of cross claims between the various parties.  The originating claim was made by a firm of solicitors, now in administration (GWM), against Templeton Insurance Limited (Templeton) in relation to a contract between them in which it is alleged that there was an implied term that Templeton would honour an insurance policy to which clients of GWM became parties.  That claim led to a cross claim by Templeton against GWM,  for negligence/breach of duty in respect of other sums it did pay out under the policy to two of GWM’s former clients, following an Arbitration (such claims are made in Templeton’s own name and also in the name of the two clients, by way of subrogated rights). Alternatively GWM and Templeton each seek against the other a contribution under the Civil Liability (Contribution) Act of 1978.  Because allegations of negligence were made against GWM which in its defence relied on the advice of Counsel, two Counsel were also joined in the proceedings by Templeton and the two GWM clients, again alleging negligence, with a resulting cross-claim for outstanding fees.
The Background
2.	The Templeton policy was for After The Event (ATE) cover for GWM clients against the risk of any order for Adverse Costs and any liability for their Own Disbursements in connection with an action brought against the Union of Democratic Mineworkers, its claims handling company Vendside and five firms of solicitors who had acted for those clients in relation to the recovery of compensation from the DTI for respiratory disease and vibration white finger suffered by them as miners.  
3.	At an earlier stage in these proceedings Templeton, an Isle of Man company raised a jurisdictional argument in which it contended that it was unarguable that the term for which GWM contended could be implied into the agreement and that the alternative basis of compensation sought, namely a contribution under the Civil Liability (Contribution) Act 1978, was unsustainable.  Teare J upheld Templeton’s contention on the former argument but not on the latter but the Court of Appeal considered both heads of claim arguable, and may have gone further than that in relation to the latter.  
4.	In 1998 two groups of actions against the British Coal Corporation were tried.  The first was the British Coal Respiratory Disease Litigation which was tried by Turner J (Griffiths v British Coal Corporation) whilst the second was a group of vibration white finger claims (Armstrong v British Coal Corporation [1998] CLY 2842).  The British Coal Corporation was found liable and following these judgments, in 1999 the Department of Trade and Industry set up two compensation schemes to deal with the hundreds of thousands of claims which were expected to be and which were actually made by former miners who had contracted either of these conditions.  Each scheme involved a Claims Handling Arrangement (CHA) between the claimants’ solicitors and the Department of Trade and Industry, for the non-forensic disposal of the claims.  A crucial part of the agreements was the provision that DTI would pay the claimants’ costs, in fixed amounts if the claim succeeded.  If the claim did not succeed, it was agreed that no costs would be sought or recovered by the DTI against the claimant.  The miners would therefore be able to pursue their claims risk free, it being assumed that the costs of any unsuccessful claim (a rare occurrence in fact) would be borne by the solicitors or, in the separately negotiated agreement with the UDM, from that organisation.
5.	As expressed in the judgment of Sir Michael Turner when dismissing an application for a Group Litigation Order (GLO) in circumstances to which I shall later refer, “it is now public knowledge that both the UDM and some of the independent branch unions of the National Union of Mineworkers (NUM) entered into separate agreements with some of their members who brought proceedings in one or other and sometimes both sets of the litigation referred to above.  From the sums awarded under the agreements, certain fixed or percentage sums have been recovered or withheld from the awards of compensation made under them.  There has been considerable pressure raised in the media and elsewhere which has had the objective of forcing the trade unions concerned or solicitors, who have been the vehicle for the recovery of those sums by the union, to disgorge them for the benefit of the claimant himself, the widow or his estate”.
6.	Complaints were made to members of parliament some of whom, in 2004, approached Mr Wynne Edwards for advice as to what could be done.  The MP for Bassetlaw, Mr John Mann, and another MP, Mr Cannon, were at the forefront of seeking redress on behalf of the miners, some of whom were their constituents.  
7.	By the Spring of 2005, Mr Edwards, a partner in GWM, had taken up the baton, with the encouragement of these MPs and was in touch with Templeton, an ATE insurer of some 10 years experience in that field, with a view to obtaining ATE insurance which would enable such Claimant Miners to seek recovery of the deducted sums from the unions, from Vendside or from the solicitors, with the benefit of insurance against any “Adverse Costs” orders and the incurring of their “Own Disbursements”.  GWM itself was prepared to enter into Conditional Fee Agreements (CFAs) with the Claimant Miners so that they would not be liable for their own solicititors’ costs should the claims fail.
8.	The essential feature of each of these miners’ potential claims was that it was individually very small, the largest being about £500.  The average claim of those 69 claimants involved in the GLO application, was £357.50.  As the number of claimants under the CHAs was vast – 500,000 in respect of respiratory disease and a further 170,000 with vibration white finger, the aggregate sums potentially involved were very large.  One hundred and fifty eight thousand claims had been handled by UDM/Vendside, according to their own figures.
9.	It is common ground between the parties that Templeton did agree to provide ATE insurance for potential claimants who would be represented by GWM under CFAs in seeking recovery of the sums deducted from their compensation.  Because of the small amounts involved for each individual and the potentially large number of claimants who might pursue such claims, GWM and the Counsel from whom it took advice all took the view that the claims should be pursued under a GLO and that an application should be made to the court for such an order.  The target defendants selected were UDM and Vendside, four firms of solicitors which had acted for UDM members and an additional firm of solicitors, Raleys who had acted for NUM members (together referred to in this judgment as the GLO Respondents).
10.	The GLO application was issued on 26 October 2005.  Because of his prior involvement in the Miners’ litigation and his continued involvement, post retirement, as the Managing Judge of the respiratory disease litigation and the CHAs brought into being under it, Sir Michael Turner acceded to a request from the co-ordinating Solicitors Group (the CSG) which played a role in ensuring that the CHAs worked effectively.  The request was that he should hear the GLO application, instead of the procedure set out in CPR whereby the Senior Master would do so.  One of the reasons for this was that GWM not only hoped to gain clients for the GLO Application, but, with the encouragement of the MPs to whom I have referred earlier, sought to gain clients under the CHA schemes by transfer from their current solicitors.  The MPs considered that their constituent miners had not received appropriate service from costly solicitors who had either permitted the deductions in question or had procured them and/or had gained additional business by agreeing to do so.  It was thought that in some cases solicitors had taken money for themselves in addition to the tariff fees paid by the DTI under the scheme.  At a hearing on 7 December 2005, Sir Michael Turner held a hearing, attended by the GLO Respondents at which he made extensive directions for the future hearing of the application, which instead of taking the usual half day to a day in fact took 3 days on the 3, 4 and 5 April 2006 and resulted in a written judgment of 18 May 2006 in which he dismissed the application.
11.	Sir Michael Turner, in his judgment, stated that the application was unnecessary, had been pursued aggressively and without proper regard to the rules which applied to group litigation when other procedures were available which would have had the effect of leading to an earlier adjudication of the underlying merits of the claims at a mere fraction of the costs which were incurred.  He held that the application was misconceived and constituted a gross abuse of the system which had been devised for the pursuit of group litigation where there was a valid group litigation issue.  He said there were features present which reflected no credit on those who had been responsible for bringing it before the court.  
12.	In consequence he made an order against the 69 claimants who were party to the application.  When Templeton, as ATE insurers declined to pay the adverse costs awarded against their insureds, the GLO Respondents threatened and took action against some of the Claimant Miners to enforce that order.  They also commenced applications for wasted costs orders against GWM.  Furthermore, GWM had, by this time, incurred liability for disbursements in the shape of counsels’ fees amounting to just over £152,000.
13.	Templeton stated, in a letter to the solicitors acting for the UDM and Vendside that the policy was void ab initio but never wrote to GWM or any of the insureds to the same effect and thereafter, despite many chasing letters, failed to give GWM any clarification of the position.  
14.	Not only were wasted costs applications made by the GLO Respondents but UDM/Vendside obtained interim charging orders on the homes of 27 of the individual GLO Applicants.  A number of the applicants then, via solicitors, Mischon de Reya intimated claims against GWM for negligence breach of duty and breach of contract referring to its “Guarantee to Clients” and to the terms of Sir Michael Turner’s judgment.  In consequence in September and October of 2006 GWM’s E&O Insurers, QBE, by their solicitors, CMS Cameron Mckenna (CMS) became involved and, given the potential for further costs to be incurred and, as it seemed to them, the obvious liability of GWM to the threatened Claimant Miners, negotiated settlements with them and with the GLO Respondents.  The E&O insurers paid the following sums:-
i)	£500,000 to the GLO solicitor respondents in respect of the Claimant Miners’ liability to them under adverse costs order awards by Sir Michael Turner;
ii)	£60,000 to the same GLO Respondents in respect of the costs of their applications for wasted costs orders;
iii)	£500,000 to UDM/Vendside in respect of the Claimant Miners liability to them under the same order of Sir Michael Turner;
iv)	£100,000 in respect of the costs of the wasted costs applications made by UDM/Vendside.  
15.	Additionally GWM made settlements with the Claimant Miners GLO Applicants.  In essence, GWM undertook to hold the applicants harmless against any costs orders made in the proceedings (particularly the order made by Sir Michael Turner on 18 May 2006) and agreed to pay each Applicant £1,000 in respect of any distress and inconvenience suffered.  Under the terms of that agreement each of the GLO Applicants undertook to assign to GWM all his rights and entitlements under the ATE policy with Templeton and all his rights and the benefit of all his causes of action against any of the barristers arising out of their acts or omissions in the conduct of the GLO application.
16.	The settlement agreements were made with the GLO Applicants, in full and final settlement of any liability which GWM might have had to any of these applicants, whether for negligence, breach of contract or breach of any duty arising out of their conduct of the litigation.  The settlements with the GLO Respondents were in full and final settlement of any cause of action or claim whatsoever that any of the GLO Respondents might have against the GLO Applicants and GWM, arising out of or in connection with the GLO application.
17.	Furthermore, as some GLO Applicants had instructed Mischon de Reya to make a claim against GWM, the sum of £40,000 was paid towards their solicitors’ costs.
18.	Pursuant to these Settlement Agreements each GLO Applicant executed a Deed of Assignment assigning to GWM all of his rights under the ATE policy, whilst agreeing to the use of his name in such proceedings as might be required against Templeton.  These assignments were not effective as against Templeton because the ATE policy contained a prohibition on assignment without Templeton’s consent.  It is accepted however that the assignments were effective as between the parties thereto.
19.	At this stage therefore GWM’s E&O insurers QBE were out of pocket in respect of the sums paid to settle GWM’s potential liabilities to their own clients under the Settlement Agreements.  The GLO Applicants’ liabilities under the costs orders made by Sir Michael Turner were thus satisfied by the E&O insurers.  Counsel instructed by GWM were however also out of pocket since GWM was not in a position to pay their fees as disbursements.  Whereas GWM were acting under CFAs for the Miner Claimants, Counsel had been instructed on a conventional basis and were owed fees by GWM.  Although some sums were paid out and an agreement was reached for payment by instalments, GWM was sued in due course and a default judgment was entered against GWM in respect of the sums due.  GWM is in administration.  Both the sums due by way of adverse costs to the GLO Respondents and the disbursements due to Counsel were the subject matter of the Templeton ATE insurance but, as I have already mentioned, Templeton had told one of the GLO Respondents that it had avoided the policy and was not responding to GWM at all throughout this period.
The Arbitration
20.	GWM’s E&O insurers (QBE) by their solicitors CMS wrote to Templeton’s solicitors setting out GWM’s intention to pursue a claim against Templeton in respect of sums due under the policy pursuant to the assignments obtained from the applicants.  Mr Colin Edelman QC was nominated as arbitrator.  Templeton however referred to the provision against assignment in the policy and took a jurisdictional point which resulted in 2 of the GLO Applicants, Beardall and Cooke becoming claimants in the arbitration as well as GWM.  The claim was for indemnity in respect of payment of the GLO Respondents’ costs in the sum of £1 million and indemnity in respect of disbursements in the shape of counsel’s fees.  Those sums totalled in excess of the £1 million limit and the claim therefore was for the policy limit.  In addition interest was sought.
21.	The arbitrator ruled that GWM had no locus to bring arbitration proceedings against Templeton because of the prohibition against assignment in the ATE policy.  He held he had jurisdiction to determine the claims of Beardall and Cooke against Templeton.  The arbitration then proceeded in their names alone. 
22.	In a further award the arbitrator held that Beardall and Cooke had no claim to an indemnity in respect of the order of Sir Michael Turner to pay the adverse costs of the GLO Respondents because those sums had already been paid by GWM in diminution of the GLO Applicants’ loss.  He found that Templeton was entitled to bring into account all the payments made by GWM under the settlement agreements and to treat those payments as having extinguished the GLO Applicants’ loss in respect of their liability under the order of Sir Michael Turner.  He held that the payment had been made by GWM specifically to diminish Beardall and Cooke’s loss and that any further payment to them would not therefore be by way of indemnity.
23.	However in his third award dated 10 October 2008, the arbitrator held that Templeton was liable under the policy to indemnify Beardall and Cooke in respect of their liability to pay counsels’ fees (Own Disbursements).  The fees had not been paid to Counsel but the arbitrator investigated whether or not there was an extant liability on their part to pay counsels’ fees that required indemnity.  He was satisfied that Counsel were still pursuing payment of their fees and made an award in Beardall and Cooke’s favour.  Templeton then paid the sum in question to the solicitors acting for Beardall, Cooke, GWM and QBE (CMS) who passed the sum on to QBE which contends that it is entitled to retain those sums under its rights of subrogation to Beardall and Cooke.  It submits it has no obligation to pay counsel.
GWM’s Claim in this action
24.	In 2008, having failed in the arbitration to secure an indemnity in respect of the adverse costs order, GWM commenced these proceedings.  Paragraphs 5-9 of the Re-amended Particulars of Claim set out GWM’s case which, in so far as it pleaded facts, was established on the evidence of Mr Edwards, whom I found to be an honest, accurate and compelling witness, where he had recollection of the course of events.  He was candid where he had no recall but when he professed to remember matters, I accept his evidence, backed up as it was to some extent by the documents before the court.  Attendance notes were not however Mr Edwards’ forte and as virtually nothing was disclosed by Templeton, there was a dearth of documentation illustrating the relationship, the initiation and the development of the insurance arrangements with Templeton, and GWMs own part in bringing that about.  Templeton did not adduce any direct evidence from those involved in the transaction.  A letter written by Templeton to one of the GLO Respondent solicitors, in 2006 is neither honest nor accurate but as no one appeared to give evidence with any direct knowledge of the transaction, I make my findings based on the documents and Mr Edwards’ evidence in the light of commercial probabilities.
25.	I find that, on a date in late June 2005 Mr Edwards met with Mr Brunswick the managing director of Templeton who agreed to provide ATE insurance in respect of the claims that GWM were proposing to launch on behalf of Claimant Miners.  The level of cover was agreed at £1 million but details of the arrangement had to be finalised by Mr Maule who was Templeton’s underwriting manager and claims manager who was also present at that meeting.  An email from Mr Edwards to Mr Maule with a draft Press Release and an email from Mr Maule to Mr Edwards in reply, both dated 28 June 2005, support Mr Edwards’ evidence about this meeting.  Mr Maule suggested an amendment to the draft Press Release in relation to the premium which was deferred as well as insured”.  On 7 July 2005 Mr Edwards had another meeting with Mr Maule and Mr Brunswick, together with Mr Fresson who was to be the point of contact between Mr Edwards and Templeton.  Templeton required Mr Edwards always to refer matters through Mr Fresson and Mr Fresson kept in close touch with GWM, visiting their offices on at least a weekly basis, throughout the period with which this court is concerned.  
26.	At the meeting on 7 July, Templeton agreed to issue a policy with a £1 million limit at a rate on line of 45% with premium to be deferred but never to be paid by the miners.  An issue arose with regard to the possibility that Thompsons who were solicitors who had acted on behalf of NUM members in the CHAs might be sued.  They were a client of Templeton’s and Templeton was not prepared to offer cover in respect of claims against that firm unless Thompsons refused to settle the issues by ADR.  It was agreed that Templeton would introduce an intermediary who would attempt to persuade Thompsons to settle by ADR but if they refused then Templeton would provide cover in respect of claims against them.  (In fact Thompsons did refuse to mediate and, on Mr Edwards’ evidence, Templeton agreed at a much later stage to issue cover against Thompsons although this never in fact materialised in the shape of a policy because Thompsons managed to persuade Templeton not to go through with that cover).
27.	Following the meeting of 7 July, Mr Edwards drafted documentation to be used in connection with the miners’ claims.  The package consisted of a CFA with GWM, an insurance proposal form, insurance wording based on ATE insurance previously issued by Templeton in other matters where Mr Edwards had obtained such cover from Templeton, and a document headed “the GWM guarantee to clients”.
28.	Mr Edwards’ evidence was that it was always understood and agreed with Templeton that the insurance had to be arranged in such a way that the miners would not be at risk of having to pay any costs or premiums themselves.  This was at the insistence of Mr Mann MP who asked him to prepare a form of guarantee so that his constituents could be reassured that they were not at risk of having to pay anything at all.  A draft of this guarantee dated 13 July 2005 was provided to Mr Maule who asked for it to be amended to make it plain that Templeton would not seek payment of the difference between the actual amount of quoted premium and the amount of any premium which proved to be recoverable from the GLO Respondents, should the claim ultimately succeed but part of the premium be disallowed as damages.  Mr Maule said that he would separately insure the premium risk.  The guarantee was then amended by an addition in paragraph 3(a)(iii) of the form.  On Mr Edwards’ evidence Mr Maule’s amendment and approval of the form of the GWM Guarantee took place shortly after 13 July 2005 and there is no reason to disbelieve that evidence, particularly as the inception date of the ATE Insurance was agreed as 13 July, and an email from Mr Edwards to Counsel on 10 April 2006, before the issues with Templeton had come to the fore supports his evidence.  That email provides a useful virtually contemporary account of the difficulties with Thompsons and the development of the proposal for more cover.  I find that email to be an accurate record.
29.	On 26 August Mr Edwards sent the documentation in its final form to Mr Brunswick and Mr Fresson asking them to confirm GWM’s authority to bind Templeton by GWM signing on its behalf, if GWM were satisfied that the claim fell within the class of actions envisaged.  That authority was given by telephone either on 26 August or shortly thereafter so that GWM was authorised to bind Templeton to the individual miners as it duly did.    
30.	Paragraph 9 of the Particulars of Claim reads thus:-
“In the premises there was an agreement between the claimant and the defendant that in consideration of the claimant agreeing to act on behalf of the miners under CFAs and writing ATE insurance with the miners on the defendant’s behalf pursuant to which the defendant would be entitled to be paid premiums, the latter would honour its obligations under the policy (the wording of the same being subject to finalisation and subsequently agreed in the form issued by the defendant).”
31.	In a response to a request for further information, GWM said that the obligation incumbent upon Templeton to honour its obligations under the policy was a term to be implied into the agreement.  GWM contends that there can be no doubt as to the existence of a contract between GWM and Templeton because the agreement to issue the policy was made prior to any identified individual claimants having an insurance contract with Templeton.  Moreover Templeton specifically authorised GWM to bind it to such potential claimants and in circumstances where the terms of the GWM guarantee were known to and approved by Templeton, the term in question must be implied as a matter of business efficacy or by reference to the “officious bystander” test.  The GWM guarantee is said to be key to the implication of the term for which GWM contends, when taken in conjunction with the Insurance Policy.

The ATE Insurance Policy
“THIS IS TO CERTIFY that Templeton Insurance Limited (hereinafter referred to as “the Insurers”) agrees in CONSIDERATION of the Premium as specified in the Schedule attached to and forming part of this Policy…
…to insure in accordance with the terms, conditions, exclusions and Limits of Indemnity as hereinafter defined.
NOW WE THE INSURERS hereby agree, to the extent and in the manner herein set out, and subject to the terms, conditions, exclusions and Limit of Indemnity specified in the Schedule, to provide the Insured with an indemnity in respect of Legal Costs payable in the Insured as specified in this Certificate in relation to the Proceedings.
1.		Definitions:		
1.1	Appointed Representative
The solicitor or other appropriately qualified consultant or party appointed to act for the Insured in accordance with Clause 6 and named in the Proposal Form and the Schedule.
1.7	Insured
The parties or group of Claimants jointly and severally liable for Legal Costs in the Proceeedings subscribing to a Group Litigation Order named in the Schedule who have entered into a CFA or CCFA with the Appointed Representative.
1.9	Legal Costs
The Opponent’s Costs and Disbursements and Own Disbursements subject to the Limit of Indemnity specified in the Schedule.
3.		Premium
3.2	If any fact or evidence or other matter is discovered subsequent to the Commencement Date which materially adversely affects or might materially adversely affect the Insured’s prospects of success in the Proceedings or the prospects of any judgment or award in the Proceedings being successfully enforced, then, the Insurers may:
3.2.1	Determine in their sole discretion the increase in the Premium that the Insured shall be obliged to pay, within 7 days of the Insured’s receipt of notification of the same, as a condition of cover under the Policy being maintained, or
3.2.2	Issue a notice to the Insured cancelling forthwith the Policy.
CLAUSE 4 - INSURANCE
The Insured and the Appointed Representative must observe and comply with the terms and conditions of this Policy.  Any terms and conditions of this Policy insofar as they relate to anything to be done or complied with by either the Insured or the Appointed Representative shall be conditions precedent to any liability of the Insurer to make any payment under the Policy.
CLAUSE 5 – EXCLUSIONS
Without prejudice to Clauses 7.5 and 7.6, the Insurers shall not indemnify the Insured in respect of:
5.3	Legal Costs arising from any delay or other default by the Insured during the Proceedings and/or in connection with any order of the Court;
CLAUSE 6 – APPOINTED REPRESENTATIVE
6.1	The Insured is free to choose an Appointed Representative to act in relation to the Proceedings.  The name and address of the Appointed Representative must be notified to Us prior to appointment.  The Appointed Representative shall be appointed in the name of and on behalf of the Insured and the Insured shall not change the Appointed Representative without Our prior written agreement.
6.2	The Appointed Representative must be given all information and assistance required.  This must include a complete and truthful account of the facts of the case and all relevant documentary or other evidence in the Insured’s possession.  The Insured must obtain or execute all documents as may be necessary and attend any meetings or conferences when required.  Failure to comply may invalidate the Certificate.
6.3	The Insured and/or the Appointed Representative shall immediately notify Us of the making of any settlement offer or payment into Court by the Opponent or the discovery of any fact or evidence other matter materially adversely affecting or which might materially adversely affect the Insured’s prospects of success in the Proceedings or the prospect of any judgment or order in the Proceedings being successfully enforced.
CLAUSE 7 – CONDUCT OF THE PROCEEDINGS
7.1	The Insured shall conduct the Proceedings with all due diligence and in as economical a manner as possible consistent with a full pursuit and/or defence of the Proceedings.  The Insured shall in conducting the Proceedings comply with all rules of Court and orders made by the Court and shall follow all reasonable advice given by the Appointed Representative.
7.2	The Insurers shall have direct access to the Appointed Representative at all times and the Insured shall co-operate fully with the Insurers in all respects.  The Insured and the Appointed Representative shall each keep the Insurers fully and continually informed of all material developments.  It is acknowledged and agreed by the Insured that the Appointed Representative’s duty under the Policy to the Insurers shall override all duties of privilege and confidentially owed to the Insured.  
7.3	At the request of the Insurers, the Insured shall instruct the Appointed Representative to produce to the Insurers immediately any documents, information or advice in the Appointed Representative’s possession and further shall give the Appointed Representative such other instructions in relation to the conduct of the Proceedings as the Insurers may require.  Any costs or expenses incurred by the Insured in providing evidence or other information that is reasonably required by the Insurers shall be for the Insured’s own account.
CLAUSE 8 – SETTLEMENT
8.1	Subject always to Clauses 6.3 and 8.2, if any settlement offer or payment into Court is made which is equal to or in excess of a sum which either following a review of the circumstances the Insurers, in their sole discretion, consider is acceptable, or a sum that the Insured has previously agreed with the Insurers as being acceptable, then the Insured must accept the same failing which the Insurers shall have no liability under the Policy.  The Insured will provide at its own costs, if requested by the Insurers, the opinion of Counsel on the acceptability of any settlement offer or payment into court.
8.2	Where the Proceedings are compromised (including by any consent judgment or order) or discontinued or withdrawn by the Insured, the Insurers shall have no liability under the Policy unless they had given their prior written agreement to such compromise or discontinuance or withdrawal.  Where the Proceedings are compromised or discontinued or withdrawn by the Insured with the Insurers’ prior written agreement, then the Insurers shall indemnify the Insured against Legal Costs as defined in this Policy to the same extent as if the compromise or discontinuance had been the final judgment or award in the Proceedings.
CLAUSE 9 -	SUBROGATION
9.1	The Insurers shall be subrogated to the Insured’s rights of recovery in relation to any claim or loss paid or payable under the Policy.  However, the Insurers shall not exercise any such rights against any Director, Officer or employee of the Insured unless the claim or loss has been brought about or contributed to by the dishonest, fraudulent, criminal or malicious act or omission of such Director, Officer or employee.
CLAUSE 10 – NON-DISCLOSURE
10.1	The Insurers shall be entitled to avoid the Policy where there has been non-disclosure or misrepresentation of facts or untrue statements made by the Insured at the inception of this Policy or at any time throughout the course of the Proceedings including without limitation, as a result of the contents of the Proposal Form.
10.2	If the Policy is avoided pursuant to Clause 10.1, the Insurers shall be entitled to recover from the Insured all Legal Costs previously paid out under the Policy and shall have no liability in respect of any other Legal Costs incurred but not paid prior to the date of notification to the Insured by the Insurers of avoidance and the Premium as stated in the Schedule shall have been fully earned.
CLAUSE 11 – ASSIGNMENT
11.1	The Insured’s rights under the Policy may not be assigned without the insurers’ prior written agreement, such agreement not to be unreasonably withheld.
11.2	Subject to Clause 11.1 this Policy shall be for the exclusive benefit of the Insured and that in no event shall anyone other than the Insured have any right of action under this Policy.”

The Contract Claim
32.	It is GWM’s case that applying one or both of the business efficacy and the officious bystander tests results in the implied term.  In agreeing with GWM that the latter would be authorised to bind its clients to contracts of ATE insurance with Templeton and that GWM would give its clients the GWM guarantee, Templeton must be taken to have agreed with GWM that it would meet valid claims under the policy.  This was thus an obligation assumed to GWM and not only to the individual miners.  It is said that by its contract with the Claimant Miners, by virtue of the GWM guarantee, GWM effectively agreed to guarantee Templeton’s performance of its obligation to the miners.  In the pleadings GWM says that its liability under the guarantee in respect of Adverse Costs orders against its clients arose only if Templeton failed to honour its obligations under the ATE policy.  If Templeton defaulted on those obligations, with the consequence that the miners looked to GWM for indemnity (as they were highly likely to do, rather than seeking to proceed against the company outside the jurisdiction to enforce an insurance policy which appeared to be contested) it would, it is said be a strange result if GWM had no contractual claim over against Templeton.  In the Court of Appeal, Longmore LJ observed that “if it were clear that, on GWM paying costs and disbursements for which the miners were liable, GWM were subrogated to the miners’ claims under the policy, it might be unnecessary to imply any term in GWM’s agreement with Templeton that Templeton would meet valid claims.  But Mr Sweeting for Templeton said that no such subrogation existed in the present case [because GWM were discharging their own potential liabilities in negligence rather than seeking to discharge the insurers obligations].  If the existence of subrogation rights is doubtful or if they do not exist at all, that in itself must be a pointer to the necessity of the alleged implied term”.
33.	In my judgment such a term cannot be implied by reference to either of the classic criteria recognised in law for the implication of terms.  Whilst it is clear that there was a contract between GWM and Templeton, inasmuch as Templeton agreed to provide insurance for clients of GWM who wished to take it up and who wished to pursue claims which fell within the ambit of the proposed action and that there was valuable consideration for Templeton’s undertaking, it is hard to see how the implied term alleged can be said either to be necessary as a matter of business efficacy or so obvious that any informed bystander would unhesitatingly reply “of course” if asked about the position.  There is nothing unusual about a solicitor arranging ATE insurance for a client with whom he concludes a CFA.  GWM were given authority to bind Templeton to their clients, if the claim fell within the relevant criteria so that, in that respect, the agreement was similar to that of a “cover holder agreement” as that term is commonly used in the insurance world.  The giving of such authority in the case of ATE cover for multi-party litigation is likewise not unusual.  In such a context there is no need to imply an obligation to the “cover holder” solicitor that the insurer will honour the policy issued to the insured, nor would an officious bystander consider such a term inevitable.  
34.	The arrangement which was put together by GWM for the provision of ATE insurance to its clients is no more and no less than one of the usual arrangements made by solicitors to obtain funding for an action by their clients, for whom they act under a CFA.  It is commonplace for the solicitor to seek ATE insurance for the litigant who then enters into an insurance contract with the ATE insurer on the terms procured by the solicitor.  The insurance policy contains the terms of the insurance and amounts to no more and no less than a contract between the insurer and the insured with the remedies available to each which arise from that.  If the insurer fails to pay, the insured has his rights under the policy which he can pursue.  There is no need for the solicitor to be able to sue in respect of a breach by the insurer.  The insurer itself has remedies of avoidance in the event of non disclosure, misrepresentation or breach of warranty and the insured will have claims over against the solicitor if that is the result of a failure on his part.  Equally, if the solicitor issues cover where he should not, contrary to the authorisation given, the insurer will have a claim against the solicitor.  The structure of this arrangement is clear and requires no further term to be implied by which the insurer owes a duty to the solicitor to honour its policy obligations to the insured.  The policy itself expressly provides in clause 11.2 that, subject to assignment with the insurers’ prior agreement, the policy is to be for the exclusive benefit of the insured and that in no event should anyone other than the insured have any right of action under the policy.
35.	Under the insurance policy GWM were expressed to be “the appointed representative” of the insured, to whom all information and assistance was to be given by the Claimant Miner, including a complete and truthful account of the facts of the case with all relevant documentary or other evidence in his possession.  Provision was made for Templeton to be notified by the insured and/or the Appointed Representative of the making of any settlement offer or payment into court or the discovery of any fact or evidence or other matter materially adversely affecting or which might materially adversely affect the insureds’ prospect of success in the proceedings.  The Appointed Representative was not however party to the policy and so could not be bound by that provision.  The proposal form nonetheless included a declaration by the Appointed Representative that the information set out in it was true to the best of its knowledge and belief and that it was not aware of any other facts affecting the prospects of success.  Further the Appointed Representative irrevocably undertook to keep the insurers informed of all material developments in accordance with the terms of the policy, if a policy was issued.  The proposal form itself made it plain that if all questions were not answered completely and accurately and all information was not disclosed which might affect the insurers’ decision to conclude an ATE policy in favour of the insured, the policy might be invalidated.  There was thus a regulation of the position as between Templeton, GWM and the insured miner.  The parties had thus addressed their minds to these particular aspects and the impact of such matters on the validity of the policy and Templeton’s obligations to pay.  GWM could not, however, by its express terms enforce the policy itself. 
36.	It is said by GWM that the agreement between it and Templeton was originally a bilateral contract for the provision of insurance to GWM’s clients on terms to be finalised but which were sufficiently certain because of the agreement to the indemnity limit of £1 million, the rate on line of 45% and the standard form of ATE wording which Templeton used (subject only to some alteration for group actions).  The date when that Agreement was concluded is unspecified but as pleaded the contract is in place by at latest the giving of authority by Templeton to GWM to bind it to individual miners.  
37.	Because it is said that what makes the critical difference to the ordinary ATE insurance situation here is the GWM guarantee, it is necessary to examine its terms.  
The GWM Guarantee
38.	The document entitled “The GWM Guarantee to clients” reads, so far as relevant, as follows:-
“MINEWORKERS’ GROUP ACTION
Coal Miners Compensation Claims
Against
Solicitors and Claims Handlers
The GWM Guarantee to clients
GWM
No win, no fee, no risk, no cost!
If you lose the case you do not have to pay anything.  If you win you get all of your compensation and you pay nothing.
We, Greene Wood & McLean LLP, confirm to our clients that we will handle their claims in relation to the above matter on the basis that:-
1)	We will undertake the case on the basis of a Conditional Fee Agreement (“CFA”) in terms whereof, if you lose the case you pay us nothing.  If you win the case you pay us an uplifted fee but we will recover this from the other party.  If we do not recover all of our fee or any amount thereof we will write off what we do not recover.
2)	We have obtained a policy of After the Event Litigation Expense Insurance for our clients underwritten by Templeton Insurance Limited a regulated insurer of Douglas Isle of Man’
3)	The policy will cover adverse costs, Own Disbursements and the insurance premium.  In the event that the premium is not recoverable in full from an unsuccessful defendant the unrecoverable portion of the premium is also insured.  Below I set out what the costs implications are – win or lose.
A)  Win:-
…….
B)	Lose:-
(i)	Our costs – we are not paid under the terms of the CFA.  There is no charge to the client.
(ii)	Disbursements – these are recoverable from the insurance policy;
(iii)	Premium – this is recoverable from the insurance policy;
(iv)	Adverse costs – this is recoverable from the insurance policy.”
39.	Templeton submits that there is no contractual warranty given by GWM at all and that all the document amounts to is an exposition of the particular and usual arrangements under which an action undertaken on a CFA backed by ATE insurance operates.  In other words, all the document does is to state the position that there is insurance coverage in respect of adverse costs orders and the incurring of the insured of disbursements.  I do not accept that submission.  This was a real guarantee to GWM’s clients.  It was fundamental to GWM’s hopes of attracting miners as claimants in the proposed action that the miners should not be at risk at all.  The MPs who were pushing for action made this point plain and the point was well known to Templeton as illustrated by Mr Maule’s amendment to the guarantee to make it plain that if part of the premium for the ATE insurance proved not to be recoverable from an unsuccessful defendant, there would be no risk of the claimant having to pay it.
40.	The guarantee is wide in its scope.  At the top, in large letters it says in terms that if the claimant does not win, there will be no fee and no cost.  There is to be no risk to him – “no win, no fee, no risk, no cost!”  In equally large letters the document says that if the miner loses the case he will not have to pay anything.  If he wins the case then he will get all of his compensation without having to pay anything.  Since the allegation being made against the five firms of solicitors, Vendside and the UDM was that they had wrongfully taken part of the miners’ compensation, it was obviously of critical importance for GWM to make it plain that any miner who was to become a claimant would not suffer any deductions from his damages or have to pay any sum out in any respect whatsoever.
41.	Templeton submits that the wording in large letters at the top of the document has to be read in the light of the detailed terms which follow and that the only operative part of the document consists of those detailed terms, whilst what appears above them is merely a general description without real effect.  I cannot accept that submission.  On analysis there is an all embracing promise made by GWM to its clients as a term of its retainer that “no win, no fee, no risk, no cost” is “guaranteed”.  Losing the action will not result in the client paying anything at all.  In addition there are some detailed promises and in particular that, in the eventuality that the action is lost, both disbursements and adverse costs would be recoverable under the ATE insurance.  In the context of no risk to the client, no cost and not having to pay anything, that promise can only mean that  GWM promise that the insurer will pay forthwith on being required to do so.
42.	The “guarantee” must therefore operate regardless of payment under the insurance policy.  The promise was that if the insurance policy did not pay then the client would not have to pay himself.  If the insurer was at fault in not paying, the “guarantee” would operate.  If the insurer was not at fault in not paying, the “guarantee” would still operate.  If there was some misrepresentation or non disclosure by the individual claimant which justified avoidance of the policy, on its face, the GWM guarantee would still operate (and any argument as to implied terms in that guarantee would be very difficult to mount, given the express terms of it and the terms of the insurance proposal form, the declaration by the solicitor as Appointed Representative and the CFA).  Furthermore, if the case was lost and an adverse order for costs was made against the individual claimant, the “guarantee” would operate if the insurance cover proved insufficient, whether in respect of that adverse costs order, the claimants’ Own Disbursements or the total of the two.  The express terms of the “guarantee” make it plain that, win or lose, the miner will pay nothing in any circumstances.  Although it is said by Templeton that the “win” provisions deal expressly with GWM picking up the short fall on Own Disbursements whilst there is no equivalent provision in the “lose” provisions, this takes the matter no further.  The guarantee made at the top of the document is all embracing in its terms.  Moreover in the “win” provisions, it is stated that premium is recoverable from the unsuccessful defendant but if not recovered in full as damages, the unrecoverable portion was said to be insured (which was not the case) and so would not fall to be paid by the miner.  In the “lose” provisions the adverse costs, disbursements and premium were all said to be recoverable from the insurance policy.  These provision assured the miner that he would not have to pay but that all fell within the scope of the general guarantee, expressly stated as “the GWM guarantee to clients” of “no win, no fee, no risk, no cost”.  When the solicitors said that if the case was lost “you do not have to pay anything” that was not a promise simply that there was an insurance policy or that the insurer would pay under the policy but a guarantee that in all circumstances the miner would not have to pay at all.
Business Efficacy
43.	In these circumstances I cannot see that it is a necessary concomitant of the GWM guarantee and Templeton’s knowledge and approval of its terms that any obligation was undertaken by Templeton to GWM to honour the policy to indemnify the insureds under the terms of the policy.  I do not consider that either Templeton or GWM would have had in mind the possibility of Templeton not honouring proper claims made under the policy at the time when the original arrangements were concluded and the agreement reached between GWM and Templeton that an ATE policy would be issued.  There is nothing in Mr Edwards’ evidence to suggest this and there is not the slightest hint of any discussion on the subject.  GWM gave a guarantee, considering it was safe to do so because of the terms of the insurance policy, where the limit was considered adequate for the litigation envisaged.  Whilst it doubtless relied upon the existence of the insurance in giving the guarantee, it did not limit its guarantee to the payment of the insurance indemnity but covered all eventualities for any Claimant Miner.  GWM undertook to hold the Claimant Miners harmless in respect of any liability for adverse costs and disbursements in the event of their losing.  The approval of this guarantee by Mr Maule and the authority given to GWM to bind the insurers, within the context of the agreement to provide insurance, does not necessitate the implication of an obligation of Templeton to GWM to honour the policy in favour of the insured Claimant Miner.  Without such a term, the structure is workable with Templeton being bound to its insureds and GWM being bound to its clients in respect of adverse costs orders and Own Disbursements, but on differing terms.  Both the insurance and the guarantee were issued in the full knowledge of the existence of the other and although it was doubtless expected that any Claimant Miner would claim on the insurance and the insurance would pay up, to the limit of the indemnity provided, the GWM guarantee operated across the board to cover the same items without indemnity limit and without reference to the terms of the policy.  
44.	The court will only imply a term on the basis that it is necessary for business efficacy of the contract where, without it the contract would be, in the words of Lord Salmon in Liverpool CC v Irwin [1977] AC 239 “inefficacious, futile and absurd”.  The touchstone is “necessity”, in the sense that the parties must have intended it to be a term of the contract, as the speeches of the other members of the House of Lords make plain.  The law raises an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended that at all events it should have.  Effectively the court implies the term on the ground that without it the contract will not work.  Do the nature and express terms of the contract implicitly require that there be such an obligation?
45.	It cannot be said that the structure of the arrangements concluded between Templeton, GWM and the Claimant Miners is unworkable.  If the miner claims under the insurance first of all, as was undoubtedly the expectation of GWM and Templeton, it would always be a matter for Templeton as to whether or not it was going to pay.  It might have good reasons for not paying: it might have arguable reasons for not paying: it might have bad reasons for not paying.  In any of those situations the Claimant Miners might claim under the GWM guarantee and although it is now accepted that GWM could not be subrogated to the rights of the miners to claim under the insurance policy, GWM is not left without remedy for reasons which appear later in this judgment.  There cannot therefore be said to be any necessity to imply the term as a matter of business efficacy.
The Officious Bystander
46.	The alternative basis for implication of the term is “the officious bystander” test as enunciated in Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206:-  
“Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if while the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress him with a common, “oh, of course””.
47.	The question is therefore whether both parties would, as reasonable men, have agreed to this implied term had it been suggested to them. 
48.	There is a difficulty about the application of this test to the present case in as much as a sophisticated bystander would be required but there are other reasons which militate against the implication of the term.  
i)	Clause 11.2 of the policy, which provides that the policy is for the exclusive benefit of the insured and that in no event should anyone other than the insured have any right of action under the policy is clear in its terms but not determinative of the argument since the claim made by GWM is not a claim under the policy but a claim under a collateral contract to provide the insurance where it is submitted that the term implied is to honour that policy.  
ii)	However, if an officious bystander raised the question either at the meetings in the Isle of Man or at the time when the authority was given by Templeton to GWM to conclude contracts of insurance on its behalf, it is hard to see how Templeton would have accepted that it was under an obligation to GWM, in addition to the insureds, to honour the policy.  What it was agreeing to do was to provide insurance for the benefit of the miners in the usual way that an ATE insurer does, which would enable GWM to seek business under CFAs.  
iii)	Mr Maule’s amendment and approval of the terms of the GWM guarantee in its amended form cannot be seen as anything more than helpfulness on his part in ensuring that the GWM guarantee stated the position correctly with regard to the insurance (although in fact it did not) and could not implicitly amount to an acceptance of a liability to GWM in respect of the policies issued.  
iv)	If Mr Brunswick or Mr Maule had been asked the question by the officious bystander as to whether they were undertaking an obligation to GWM to honour the policies to be issued, I have no doubt that they would have answered in the negative.  
v)	Nor does Mr Edwards, in his evidence in any way suggest that his answer would have been positive.  Whilst I am conscious that, had he dealt with this directly in his statement, Templeton would have criticised the evidence as being self serving, the fact remains that there is nothing in his factual evidence which militates in favour of the implication of a term on this basis in any of the meetings or exchanges which took place between him and Templeton’s representatives.
49.	Moreover, if it had been suggested that the obligation in question was a contractual obligation to pay money, which, if breached, would result in a claim for damages for non-payment under the policy, with such damages being at large, in excess of the limits of the policy, I am clear that the answer would have been a resounding no.
50.	Looked at in the round therefore, in my judgment there is no basis for any contractual term of the kind suggested.  The structure of the contracts militate against it.  There are adequate remedies available to GWM, to which I will refer later in this judgment so that the point made in paragraph 14 of the judgment of the Court of Appeal in this matter by Lord Justice Longmore has less weight than it might in other circumstances.  In the context of a contract between an ATE insurer and a solicitor prior to the conclusion of insurance contracts by the solicitor’s clients: in the context of a contract akin to that of a cover holder whereby authority was given to GWM to enter into contracts of insurance on behalf of Templeton: and in the context of a “guarantee” given by GWM which it voluntarily undertook in the hope of obtaining CFA business, it cannot be said to be necessary to imply a term of the kind alleged.  Nor can the officious bystander test be satisfied.  The arrangements are capable of operating effectively without such an implied obligation and the parties would not, if asked about it, have accepted that such an obligation inevitably arose.
The Judgment of Teare J
51.	When these arguments were put to Teare J at an earlier stage of the proceedings he expressed the matter very succinctly at paragraphs 14-16 of his judgment.  Having heard all the evidence, I am satisfied that he was right in the view he formed:-
“14.	By authorising the Claimant to bind the miners to the ATE insurance the Defendant agreed to be brought into contractual relations with the miners upon the terms of the ATE policy so that the miners had a right to sue the Defendant upon its terms.  By approving the terms of the guarantee of “no win, no fee, no risk” the Defendant agreed that the guarantee may be issued.  It is not necessary, in order to make the contract pleaded in paragraph 8 work, to imply in it a term enforceable by the Claimant that the Defendant would honour its obligations under the policy to the miners.  That is because the Claimant was enabled to give its guarantee to the miners against the Defendant to be indemnified in respect of adverse costs on the terms of the ATE policy to be issued to them.  It is not necessary to imply a term enforceable by the Claimant that the Defendant would honour its obligations under the policy to the miners, although the Claimant might now think that it would have been desirable had there been such a term.
15.	Had an officious bystander suggested to the Claimant and the Defendant that express provision be made for the Defendant to owe a contractual duty to the Claimant that it would meet valid claims under the policy by the miners I do not consider it arguable that both parties would have replied “oh, of course”.  The Claimant might well have replied that such a duty might have its advantages but the Defendant would surely have replied that such a term was unnecessary because the miners would have a right exercisable against the Defendant to be indemnified in respect of costs.  For that reason the miners would not have to bear adverse costs and the Claimant could be confident that, as stated in the “guarantee”, adverse costs could be “recoverable from the insurance policy”.
16.	If the Claimant wished to have a right to sue the Defendant which, as it were, sat in parallel with the right of the miners to sue the Defendant, the Claimant ought to have made express provision for such a term.  Such a term cannot be said to be a necessary or obvious incident of the contract pleaded in paragraph 8 of the Points of Claim.”
Recovery by Operation of Law
52.	In his closing submissions, Mr Ronald Walker QC, on behalf of GWM, developed another line of argument in which he submitted that GWM was entitled to recover from Templeton by operation of a general well established principle of law, based on a line of authority stretching back to the 19th Century.  The principle, as stated by him, was that where a person discharges the indebtedness of another at his request or because he is obliged to do so, he has a claim to be indemnified by that other person.  
53.	Reliance was placed on paragraph 44-112 of Chitty on Contracts 30th Edition Volume 2, which sets out the principle that a surety, who has actually met the liability which he has undertaken to answer for, is entitled to be indemnified by the principal debtor.  If the surety has undertaken liability at the express or implied request of the debtor, the right to indemnity can be said to arise either from an implied actual contract between the surety and the debtor or as part of the law of restitution, because the surety has been compelled by law to discharge the debts of another.  
54.	On the evidence there is no question here of any request by Templeton to GWM to pay the GLO Respondents’ costs or to indemnify the Claimant Miners against those adverse orders for costs.  Reliance is however placed on Mr Maule’s assistance in drafting the GWM Guarantee and amending it to include the section telling miners that any shortfall between the premium charged and that recovered in a successful action would be “insured”.  Whilst I have already found as fact that Mr Maule did redraft the GWM Guarantee in this way and that Mr Edwards’ email of 10 April 2006 is essentially an accurate record of what occurred, this cannot amount to a request to issue the GWM Guarantee itself.  Mr Edwards never suggested that this was the case in his evidence and I can see no basis for implying a request that this document be issued, although it was the clear understanding of Mr Maule at Templeton, that it would be.  Both Mr Edwards and Mr Maule co-operated in putting together a structure which they thought would benefit both GWM and Templeton and enable the Claimant Miners to seek redress in respect of the deductions from their compensation.
55.	Owen v Tate [1976] QB 402 is Court of Appeal authority for the proposition that a right of indemnity is not normally available to a person who has assumed or discharged the liability of another without any antecedent request by that other person, unless there is some practical necessity to do so and it is just and reasonable that he should be indemnified.  The authors of Chitty question how this can be reconciled with the other general principle set out by the Court of Exchequer Chamber in Moule v Garrett (1872) LR 7 Ex 101 to the effect that wherever two persons are liable for the same debt and as between them, one of them is primarily liable, that party is liable to indemnify the other if the other meets the liability.  
56.	Templeton submits that the obligation in restitution, in the absence of any implied or express request, can only arise at the point where payment is made and that the reason for payment here by GWM (by its E&O insurer, QBE) was not related to the discharge of GWM’s or Templeton’s liability.  Templeton submits that the reason for GWM/QBE paying the GLO Respondents’ costs and thereby indemnifying the GLO Applicant Claimant Miners was the negligence and breach of duty on the part of GWM in their conduct of the proceedings.  There is here no question that GWM acted as a volunteer but the basis and motivation for payment by QBE is in issue.  In this context questions of construction of the settlement agreements with the Claimant Miners arise, since Templeton submits that the terms of those agreements are determinative of the basis upon which payment was made.  I shall turn to those in a moment but, as appears later in this judgment, I find that neither GWM nor Counsel were negligent in the conduct of the litigation.  Questions of primary and secondary liability as between GWM and Templeton turn on the construction of the GWM Guarantee in the context of the Templeton ATE insurance policy and the arrangements made between Templeton and GWM.  
57.	GWM were obliged to indemnify the GLO Applicant Claimant Miners by reason of the GWM Guarantee, regardless of any question of negligence on its part, for the reasons I have already given.  Moreover, the terms of the settlements with the GLO Applicant Claimant Miners, notwithstanding Templeton’s submissions to the contrary, were apt to do so.  Those settlements specifically covered claims for breach of contract as well as negligence or other breach of duty arising out of GWM’s conduct of or in connection with the proceedings.  Whilst Templeton says that a payment under the GWM Guarantee is not aptly described as a payment in settlement of a claim for breach of contract, in my judgment, as exemplified in the Mischon de Reya letter before action, the Claimant Miners could and did rely upon the GWM Guarantee as a term of the contract of retainer with GWM.  The letter referred to misrepresentation in the GWM Guarantee and to the GWM Guarantee being a term of the retainer.  
58.	Since the GWM Guarantee provided for “no risk, no cost” to the Claimant Miners, the very existence of charging orders on 27 of such Claimant Miners’ houses and the threat of enforcement of the judgment against all of them can be seen as constituting a breach of contract on the part of GWM.  Since Templeton, the ATE insurers, were not paying, GWM was in breach of its wider promise under the GWM Guarantee of “no risk, no cost” and also of the promise that adverse costs were recoverable under the insurance policy, which had to be taken to mean, when combined with the other terms of the document, that insurers would pay when called on to do so, without the Claimant Miners being called on to do so themselves.  
59.	The Claimant Miners’ position had to be protected by GWM in the absence of payment by Templeton and QBE then acted promptly and sensibly to resolve the position, facing claims against GWM which were unanswerable under the terms of GWM’s retainer and the GWM Guarantee as well as being arguable in negligence.  
60.	In my judgment there is no question that, when the ATE insurance arrangements were made and the GWM Guarantee given, it was expected that the ATE insurance would pay if the insured events occurred and it was this which enabled GWM to give its guarantee to the GWM miners, even though the terms of the guarantee extended beyond the liability of Templeton under the policy, as I have already held.
61.	Insofar as the Claimant Miners were entitled to indemnity under the ATE policy, I have no hesitation in finding that, as between GWM and Templeton, this was the intended primary means of discharging the liability of the Claimant Miners for adverse costs and Own Disbursements, and that GWM’s Guarantee was secondary thereto, being made in reliance thereon, albeit wider in its terms.  Whilst both the ATE policy and the GWM Guarantee were made in the full knowledge of the existence of the other, there cannot be any doubt that the primary liability to the Claimant Miners lay with Templeton and that the parties would, if asked by an officious bystander at the time of making the arrangements, unhesitatingly have agreed that this was the case.
62.	Whilst therefore there was no implied term in the contract between GWM and Templeton that Templeton would honour the policy, it was clearly understood between GWM and Templeton that if the situation arose where adverse costs or Own Disbursements became payable by the Claimant Miners, so that both Templeton and GWM were liable under their respective contracts with the Claimant Miners, the primary liability to them lay with Templeton.
63.	The decision of the Court of Appeal in Brook’s Wharf and Bull Wharf Ltd v Goodman Brothers [1937] 1 KB 534 is very much in point here.  Lord Wright MR, in determining a claim by a warehouseman who had discharged the customs duties on goods belonging to the owners said this:-
“The essence of the rule is that there is a liability for the same debt resting on the plaintiff and the defendant and the plaintiff has been legally compelled to pay, but the defendant gets the benefit of the payment, because his debt is discharged either entirely or pro tanto, whereas the defendant is primarily liable to pay as between himself and the plaintiff.  The case is analogous to that of a payment by a surety which has the effect of discharging the principal’s debt and which, therefore, gives a right of indemnity against the principal.”
64.	He went on to say:-
“The obligation is imposed by the Court simply under the circumstances of the case and on what the Court decides is just and reasonable, having regard to the relationship of the parties.  It is a debt or obligation constituted by the act of the law, apart from any consent or intention of the parties or any privity of contract.
It is true that in the present case there was a contract of bailment between the plaintiffs and the defendants, but there is no suggestion that the obligation in question had ever been contemplated as between them or that they had ever thought about it.  The Court cannot say what they would have agreed if they had considered the matter when the goods were warehoused.  All the Court can say is what they ought as just and reasonable men to have decided as between themselves.  The defendants would be unjustly benefited at the cost of the plaintiffs if the latter, who had received no extra consideration and made no express bargain, should be left out of pocket by having to discharge what was the defendants’ debt.”
65.	Thus the principles set out by Cockburn CJ in Moule v Garrett at page 104 comes into play and apply here so that GWM can recover from Templeton the amount which it paid for which Templeton was primarily liable under the ATE policy, up to the policy limit, less sums paid under the policy:-
“The general proposition applicable to such a case as the present is, that where one person is compelled to pay the damages by the legal default of another, he is entitled to recover from the person by whose default the damage was occasioned, the sum so paid. .. Where the plaintiff has been compelled by law to pay or, being compellable by law, has paid money which the defendant was ultimately liable to pay, so that the latter obtains the benefit of the payment by the discharge of liability: under such circumstances the defendant is held indebted to the plaintiff in the amount.  Whether the liability is put on the ground of an implied contract or of an obligation imposed by law, is a matter of indifference: it is such a duty as the law will enforce.”
66.	The same result is in fact reached under the Civil Liability (Contribution) Act claim for not dissimilar reasons, a matter to which I now turn.
The Claim under the 1978 Act
67.	In paragraph 26 of the Re-amended Particulars of Claim, GWM claims an indemnity in respect of two payments of £500,000 in respect of the adverse costs orders made against the GLO Applicants which it, by its E&O insurers, QBE, discharged by paying the GLO Respondents.  The total amounts to the £1 million limit under the Templeton ATE policy but it will be recalled that Templeton paid the sum of £152,127.86 under the final arbitration award issued by Mr Colin Edelman QC in respect of “Own Disbursements” and it is accepted by GWM that this sum therefore falls to be deducted from any sums due under the policy.
68.	Templeton disputes the contribution claim, submitting that its contractual obligation to indemnify under the insurance policy does not fall within the terms of the 1978 Act as it is not liable for the same damage as GWM.  It also contends that it is not responsible for the damage suffered by the GLO Applicants who incurred liability to meet the adverse costs order made against them in favour of the GLO Respondents, because this was caused by GWM and/or counsels’ negligence.  GWM contends that the point about the same damage has already been determined by the Court of Appeal against Templeton and that Templeton cannot re-open the argument on this.  In any event GWM submits that the Court of Appeal’s decision was plainly right.
69.	The Civil Liability (Contribution) Act 1978 provides as follows:-
“Section 1(1)..any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
Section 1(4)  A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”
Section 1(6):-
“References in this section to a person’s liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage.”
Section 6(1):
“A person is liable in respect of any damage for the purposes of this Act if the person who suffered it (or anyone representing his estate or dependants) is entitled to recover compensation from him in respect of that damage (whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise).”
70.	Templeton submitted that the GLO Applicants did not have a right to claim compensation from Templeton in respect of their liability under the adverse costs orders made against them by Sir Michael Turner.  Instead it is said that they had a right to make a claim on the ATE insurance policy for an indemnity and in the event that Templeton did not indemnify, a right to seek compensation from Templeton by action for breach of contract.  Templeton thus contends that its contractual obligation to indemnify under the insurance policy does not fall within the terms of the 1978 Act.  If the GLO Applicants were to sue Templeton for breach of its obligation to indemnify, the damage suffered by the insured for which it would be seeking compensation would be an economic loss arising from the breach by Templeton of its contractual obligations to indemnify.  That is said not to be the same damage as has been caused to the GLO Applicants by what is alleged to be GWM’s negligence and/or breach of retainer in the conduct of the GLO application which gave rise to the adverse costs orders made against them.
71.	At the outset of this litigation Templeton sought to set aside service out of the jurisdiction on the basis that there was no arguable claim against it under the 1978 Act.  Mr Justice Teare disagreed, as did the Court of Appeal, as appears from paragraphs 21-28 of the judgment of Longmore LJ.  
72.	As was pointed out in that judgment, the basis of the liability does not matter for the purposes of the Act but the damage for which both GWM and Templeton are liable has to be “the same damage”.  Longmore LJ said this in paragraph 22:-
“In the present case the damage for which GWM are liable is the liability of the miners to pay the costs of the respondents to the GLO application and the disbursements which the miners have had to pay in respect of their own application.  This liability arises as a result of GWM’s undertaking to their clients (the miners) that they would not themselves be liable for such costs.  The damage for which the insurers are liable is the loss to the miners in consequence of their failure to honour the ATE policy which covered the miners in respect of their liability to pay the costs of the successful respondents to the GLO and disbursements which they were liable to pay.  That seems to me to be the same damage as that for which GWM are liable and potential liability under section 1 of the 1978 Act must therefore follow.”
73.	Lord Justice Longmore then went on to recite Templeton’s submissions that this was an incorrect analysis and its contention that GWM’s true liability was a liability in negligence to the miners for having pursued a hopeless application.  Templeton relied upon the sums paid in settlement of wasted costs’ applications and the sums paid to settle potential claims from the miners by paying them £1,000 each for distress and inconvenience.  The Lord Justice pointed out that the reality was that GWM had undertaken to the miners that they would not have to bear any expense of the litigation and the fact that they may also have been negligent and that negligence exposed the miners to the claims for adverse costs was nothing to the point because of that promise.  Whether the liability on the GLO Applicants to pay the adverse costs orders of Sir Michael Turner was caused by negligence or breach of duty on the part of GWM, GWM had promised that the miners would not be exposed to liability for those costs under the GWM guarantee.  That indemnity under the GWM guarantee in respect of the adverse costs order operated in respect of the self-same damage suffered by the GLO Applicants as Templeton’s indemnity under the ATE insurance policy.  Templeton had bound itself to pay any adverse costs order made against the GLO Applicants and the disbursements incurred by those applicants in the event of non recovery from the GLO Respondents.  Those were the self same items upon which the GWM guarantee operated and moreover, even if Templeton was correct in saying that this was brought about by the negligence or breach of duty of GWM, it is the self same damage which resulted from GWM’s default.
74.	The Court of Appeal referred to the authorities relied on by Mr Derek Sweeting QC who appeared then for Templeton, as he has in this action, and in particular to the decision of the House of Lords in Royal Brompton NHS Trust v Hammond [2002] 1 WLR 1397, where emphasis was placed on the need to identify the essence of the claim or potential claim in considering the question of the same damage.  The Court of Appeal found that the authorities referred to were all distinguishable and Lord Justice Longmore concluded in paragraph 27 that “in the present case, for the reasons given, the damage is not just substantially or materially similar.  It is, in fact, the same damage.”  The other members of the court agreed.
75.	What is clear from the terms of the judgment is that, whereas the court found that there was a serious issue to be tried on GWM’s claim in contract, when it turned to the 1978 Act claim, it found in terms that GWM’s claim was in respect of “the same damage” for which it was alleged that Templeton was liable and for which, absent any defence put forward by Templeton under the policy, as is now the position, it plainly was liable.  That decision of the Court of Appeal is binding upon me and, as GWM submit, in my judgment, is plainly right in any event.  
76.	In the Royal Brompton case, Lord Bingham set out three questions which fall to be decided in the context of the Act.  1) What damage has A suffered?  2) Is B liable to A in respect of that damage?  3) Is C also liable to A in respect of that damage or some of it?  He emphasised the point that what was required was a common liability to A on the part of B and C and not independent liabilities for separate matters.  Reference was later made to the decision of David Steel J in Bovis Construction Ltd v Commercial Union Assurance Co plc [2001] 1 LLR 416.  In that case the Judge decided that the liability of a builder for defective work was not in respect of the same damage as that covered by an insurance company’s liability under the policy of insurance.  The Judge said it was a misconception to describe the liabilities as being “in respect of the same damage” as the damage inflicted by the builder was a defective building susceptible to flooding damage and consequential loss of rent whereas the only damage the insurance company could inflict would be a refusal to pay on the policy which caused financial loss.  Applying Lord Bingham’s tests, the Judge was held to be correct.  In the present case therefore, if GWM was liable in damages for negligence, it would be for causing the GLO Applicants to incur liability for adverse costs and Own Disbursements whereas the damage incurred by any breach by Templeton would be for failure to indemnify against that liability. The damage in the one case would be for causing economic loss, whilst the damage in the other would be for failure to indemnify against that economic loss.
77.	The critical difference here, however, is the existence of the GWM Guarantee. Both the ATE insurance and the GWM Guarantee cover the same potential economic loss to the Claimant Miners, namely their liability for adverse costs and Own Disbursements.  Furthermore it is, as Longmore LJ held, clear that, since Templeton’s liability to indemnify was the primary liability and  GWM’s the secondary liability, with GWM promising that Templeton would pay,  Templeton’s failure to pay the GLO Respondents’ costs and the miners own disbursements rendered GWM in breach of its contractual obligation to the miners under the GWM Guarantee.  The damage suffered by the miners  from Templeton’s failure to honour their obligations under the ATE policy was the same damage as that resulting from GWM’s breach of its promises  and it was Templeton’s failure to pay which caused the very damage for which GWM was liable. 
78.	Mr Colin Edelman QC in his award found that the sums paid by GWM to the GLO Respondents in respect of the GLO Applicants’ liability under the adverse costs orders were sums paid in diminution of the loss suffered by them so that there was no loss in respect of these matters to be claimed under the insurance policy.  GWM had indemnified the GLO Applicants against the very liability which was covered by the ATE policy, so absent negligence and breach of duty on the part of GWM, the damage is plainly the same damage.
79.	The Claimant Miners had a claim against GWM under the terms of the GWM Guarantee.  If GWM had breached its duties of care, in contract and tort to the Claimant Miners in the handling of the GLO application, other considerations come into play.  If its negligence was the cause of the adverse costs order (by way of example), in the absence of the GWM Guarantee, Templeton would have been bound to pay under the ATE insurance, but could have utilised the Claimant Miners’ subrogated rights to pursue GWM in respect of that negligence.  The existence of the GWM Guarantee would not affect that right, though in addition, the GWM Guarantee would give rise to a potential claim under the 1978 Act.  The same would hold true in respect of Own Disbursements.  The end result of either claim ought to be the same, depending upon the responsibility for and contribution to the damage in question.    
80.	If Templeton had no responsibility for the damage in question because it was entirely caused by GWM’s negligence then Templeton would have a complete defence to a contribution claim (made in respect of the same damage under the ATE policy and the GWM guarantee) under the 1978 Act as well as being able to claim damages in respect of its subrogated rights.
81.	The same distinction that Templeton puts forward in relation to damage resulting from negligence and a failure to pay under an insurance policy holds good under the Act in respect of the barristers who have been joined in the action by Templeton to claim a contribution, if the GLO Applicant Claimant Miners’ liability for adverse costs or Own Disbursements was caused in part or in whole by the barristers’ breach of duty.  However, in indemnifying Beardall and Cooke, two of the GLO Applicants against their liability for Own Disbursements, Templeton would have been subrogated to the rights of Beardall and Cooke to sue the barristers for any negligence on their part, if they had not, by the time that such a payment was made, long since assigned their rights under the causes of action against the barristers to GWM who had, in the settlement agreement with them, undertaken to hold them harmless against any further adverse costs orders, having already settled Beardall and Cooke’s liability for those costs orders by paying the GLO Respondents in accordance with the settlement agreement reached by GWM’s E&O insurers with those respondents.
82.	Templeton nonetheless claims against GWM in respect of the amounts it paid out to Beardall and Cooke for their Own Disbursements and cross claims against GWM any amount which might be awarded in favour of GWM under GWM’s claims against it. Beardall and Cooke also claim against GWM and the barristers for breach of duty to them. Templeton also contends that Counsel owed it a direct duty of care in respect of their conduct of the GLO application and claims the same losses that it claims against GWM.
83.	As appears later in this judgment, I find that neither GWM nor Counsel were negligent in any way in the pursuit or handling of the GLO application.  In the absence of any breach of duty on their part, the contest arises only under the 1978 Act arises in the context of the Templeton ATE insurance policy and the GWM Guarantee.  I have already found that the parties envisaged that the Templeton ATE insurance policy would constitute the primary liability and I find, as did Longmore LJ, that it was the failure to pay on the part of Templeton which led to QBE paying out under the GWM Guarantee, on behalf of GWM.  
84.	As between Templeton and GWM, 100% of the responsibility for the liability therefore rests with Templeton to the extent that there is a common liability between them.  That common liability arises in respect of the settlement of the adverse costs orders which in itself amounts to £1 million, regardless of the other items and in respect of Own Disbursements which Templeton have already paid in the sum of £152,127.86.  Both were liable to the GLO Applicants in respect of their liability for those amounts. It is accepted that Templeton cannot be liable under the 1978 Act for more than the indemnity limit, namely £1 million, together with any interest thereon and that the sum paid in respect of Own Disbursements falls to be deducted from that.  Subject to that, the balance remaining must be 100% the responsibility of Templeton and GWM is entitled to recover accordingly.
Damages for Breach of the Implied Term
85.	Before going on to deal with Templeton’s claims against GWM and Counsel for breach of duty I should, in passing, deal with the issue of damages which would have arisen had I found that Templeton was in breach of the implied term for which GWM contended.  As this was a collateral contract to the insurance policy itself, in principle I see no reason why GWM could not recover monies in respect of Templeton’s failure to honour the policy, which exceed the policy limits.  Provided that the damages in question fall within the ordinary rules of recoverability for breaches of contract, as being within the contemplation of the parties at the time when the contract was made, sums above and beyond that limit could be recovered.  The special circumstances which are required when one party claims against another for that other party’s failure to pay the claimant are not required in this case.  Although this is a claim for damages for failure to pay money, it is not a claim for damages for failure to pay money to the claimant.
86.	The heads of damage claimed included not only the £1 million paid in respect of the GLO Respondents’ costs of the GLO application but also £160,000 in respect of the wasted costs applications brought by them, £47,000 in respect of the Claimant Miners who instructed Mischon de Reya to pursue their claims against GWM, £69,000 in respect of distress and inconvenience paid by GWM to each of the GLO Applicant Claimant Miners and £204,000 approximately in respect of QBE’s own costs in dealing with all these matters.  
87.	The question arises as to whether each and every one of these heads of damages was caused by Templeton’s failure to pay.  Templeton submits, without any evidence, that some of these figures came about because of delay on the part of GWM in paying out under the GWM Guarantee because it sought to enter into settlement agreements which would preserve or improve its position against Templeton itself.  None of this was put to Mr Maguire whose statement was accepted in evidence by Templeton, who did not require him to attend for cross-examination on it.  In it he says that he negotiated settlements with both the miners and the GLO Respondents as expeditiously as he could and on the best terms that he could negotiate.  There is no reason to disbelieve that.  He took the view, as set out in his statement, that GWM probably had no defence to a claim by the miners, having regard to the terms of the GWM Guarantee and, in the absence of any confirmation of indemnity from Templeton, considered it necessary to proceed to settle the various claims as expeditiously as possible.  In order to avoid further escalation of costs, whether by the GLO Respondents by way of enforcement proceedings and the pursuit of their wasted costs applications, or by Mischon de Reya, as well as to avoid extra distress to the miners, settlements were negotiated and concluded.
88.	Although Mr Maguire regarded the total of £1 million in respect of the costs orders as high, he felt it was “not manifestly excessive and that we should agree to settle for this sum to dispose of the litigation”.  In relation to the wasted cost applications, he pointed out in his statement that GWM faced the obvious difficulty that they would be heard by Sir Michael Turner himself and, having regard to the trenchant views which he expressed in his judgment, the applications would be difficult to resist, although he thought that any wasted costs orders that he might make would be appealable.  Again he considered it was in the insurers best interests to settle these issues before yet further costs were incurred.
89.	At paragraph 14 of his statement Mr Maguire refers to the breakdown of QBE’s own costs of £204,967.92.  On his instructions the total was broken down by a costs draftsman into 3 parts.  The first part was the costs of dealing with the potential claims of the GLO Applicant Claimant Miners against GWM (but not any complaints to the Consumer Complaints Service) amounting to £80,127.00 including VAT.  The second part dealt with the costs of dealing with the GLO Respondents’ costs claims and enforcement of them and amounted to £61,611.89 inclusive of VAT, whilst the third part set out the costs of dealing with the Respondents’ wasted costs applications and amounted to £63,229.03 including VAT.
90.	In my judgment it is plain that, had Templeton honoured the insurance policy and paid out when called upon to do so, on receipt of the adverse costs order, the GLO Applicant Claimant Miners would never have been subjected to the enforcement proceedings that they were and the necessity for GWM’s E&O insurers, QBE, and their solicitors CMS to become involved would not have arisen.  The £1 million indemnity limit would have been utilised fully in paying the GLO Respondents’ costs however, subject only to some deduction since the costs would have been paid earlier than they actually were pursuant to the settlement agreement.  There would have been no claims from the GLO Applicants via Mischon de Reya nor any distress or inconvenience payments to the miners if Templeton had fulfilled its obligations.  It is not however clear that there would not have been wasted costs applications brought by the GLO Respondents, although the incentive to do this was undoubtedly increased by the failure of Templeton to pay and there is evidence in the hearings before Sir Michael Turner that the applications were taken out with a view to “encouraging” Templeton to pay.
91.	It is pointed out by Templeton that the terms of the CFAs limited the liability of GWM for breach of duty in the sum of £1 million “for any one matter or transaction or series of connected or associated matters or transactions”.  It is not suggested that this term would be unenforceable and it is therefore submitted on behalf of Templeton that any damages beyond this level would have been outside the contemplation of the parties when concluding the contract between GWM and Templeton with the implied term for which GWM contended. 
92.	In my view, the applications for wasted costs and the costs associated therewith, whether incurred by the GLO Respondents or by QBE would not have been within the contemplation of the parties at the time of entering into the arrangements between GWM and Templeton.  These therefore would be irrecoverable.  The other matters however were not only directly caused but, in my judgment, are exactly the sort of heads of damage that might well be expected in the event of a failure by Templeton to pay under the policy.
93.	I do not consider that the CFA limit of £1 million assists Templeton’s argument.  It is trite law that it is the nature of the damage suffered which is relevant when considering what is within the contemplation of the parties.  The quantum of the damage may be outwith the parties’ expectations but this does not serve to provide a limit on liability for the defendant.  No claim was pursued in respect of any failure on the part of GWM or QBE to mitigate damage and in those circumstances, subject only to the elements which relate to wasted costs, I would have found all the other heads of damage recoverable for Templeton’s breach, if there had been an implied term of the kind alleged by GWM.

Templeton’s Claim against GWM and Counsel for Breach of Duty
94.	The first issue here is whether or not GWM and/or Counsel owed a duty of care to Templeton.  In paragraph 9 of the Re-re-Amended Defence and Additional Claim it is alleged that GWM owed a duty to Templeton to advise upon the form and nature of any proposed proceedings which were to be the subject of ATE insurance and to conduct such proceedings with the care and skill to be expected of a reasonably competent solicitor and/or in accordance with the express terms of the policy.  
95.	One of the reasons that this direct duty is alleged and reliance is not placed simply upon GWM’s and Counsel’s duty to the GLO Applicants, to whose rights in respect of Own Disbursements, Templeton was subrogated, is doubtless because the GLO Applicants, including Beardall and Cooke, who do pursue such claims, assigned their rights against Counsel to GWM, before Templeton paid under the Arbitration Award.
96.	It is alleged that it would be just and reasonable to impose such a duty because GWM was in a direct and proximate relationship with Templeton by reason of GWM’s appointment as Appointed Representative of the insured miners, because Templeton necessarily relied upon GWM to advise upon and conduct the proceedings and because the foreseeable consequence of a failure by GWM to observe the terms of the policy and/or to advise upon or conduct the proceedings with care and skill was that the defendant might be exposed to a liability to indemnify the insured in respect of adverse costs and Own Disbursements which it would otherwise not have incurred.  Much the same points are made in alleging a duty on Counsel to advise not only the GLO Applicants but also Templeton upon the form and nature of any proposed proceedings which were to be the subject of a ATE insurance, to advise upon and conduct such proceedings with the skill and care to be expected of reasonably competent Counsel and, if any matters arose that materially affected the prospects of success of the GLO application, to advise of that and as to the prospects of success of the proposed application.  As Counsel were instructed on behalf of the GLO Applicants including Beardall and Cooke, it is said that Templeton necessarily relied, as did GWM, upon Counsel to advise upon the form and nature of any proposed proceedings and to advise upon and conduct such proceedings.
97.	Templeton also contends that, if there was a contract between GWM and Templeton to the effect alleged by GWM, then that contract included implied contractual duties to the same effect as that alleged to arise as a matter of common law in tort. 
98.	There can be and is no doubt about the existence of a duty on the part of GWM and Counsel to the GLO Applicants but it is denied that any similar duties of the kind alleged by Templeton was owed to it.
99.	Templeton decided for itself whether or not to grant ATE insurance in respect of the projected claim which was, on the evidence of Mr Edwards and by reference to the documents, always seen as a claim to be pursued under a GLO. No other way was seen as feasible. Templeton agreed to insure this risk without seeking the advice of GWM or Counsel on the prospects of success. It evaluated that risk and fixed the premium accordingly, albeit it did so, as Mr Wells of Templeton effectively accepted, by “flying by the seat of the pants”. Neither GWM nor Counsel were retained by Templeton to advise it on the merits of the GLO Application or the claim and were not asked to do so. 
100.	The evidence of Mr Edwards, which I accept, was that, when he raised the subject Mr Brunswick said he knew about the miners’ grievances and immediately told Mr Maule that they would provide cover.  This was to be contrasted with two other cases where Mr Edwards had obtained cover from Templeton for multi-party litigation, where Templeton had required Mr Edwards to obtain an opinion from Counsel in each case as to the prospects of success before he would undertake the risk.  In the case of the miners the rate on line was agreed at the same level as for these pieces of multi-party litigation but without any advice being sought from GWM or Counsel as to the prospects of success, it being fully understood that a GLO application was considered to be the way forward.
101.	The question then arises as to whether there is anything in the arrangements made between GWM and Templeton or in the ATE Policy terms which militates in favour of duties owed by GWM or Counsel to Templeton.
102.	Templeton gave GWM authority to bind it to ATE cover of individual miners if their claims fell within the ambit of the policy terms.  It is plainly arguable that GWM owed a duty of care in relation to the making of that assessment but that duty is not in issue, because there is no suggestion of any failure on GWM’s part in that regard. That was however a duty undertaken by GWM towards Templeton.
103.	It is clear from the terms of clause 12 and clause 6 of the insurance policy that GWM was the Appointed Representative of the insured - “the Appointed Representative shall be appointed in the name of and on behalf of the Insured and the Insured shall not change the Appointed Representative without our prior written agreement”.  That Appointed Representative was however given responsibilities by the terms of the policy.
104.	As referred to above, the insurance proposal form was not only to be completed jointly by the insured and the Appointed Representative and signed by both of them, but it also included a declaration by the Appointed Representative to the effect that the information set out in the form was true to the best of its knowledge and belief and that it was not aware of other facts affecting the insureds’ prospects of success in the proceedings.  Moreover there was an irrevocable undertaking on the part of the Appointed Representative to keep the insurers informed of all material developments in accordance with the terms of the policy. These are the duties which arise prior to the insurance with any individual insured, because of the obligations expressly undertaken by GWM towards Templeton.
105.	This direct undertaking given by GWM in the proposal form to keep the insurers informed of all material developments in accordance with the terms of the policy is part of the contractual arrangements between GWM and Templeton whereby Templeton did agree to provide insurance to GWM’s future clients and authorised GWM to bind it to insurance contracts with such clients.  This is an express obligation which was undertaken by GWM and one which, for reasons which appear subsequently, it fulfilled by keeping Mr Fresson informed on a weekly, if not daily basis throughout the period between August 2005 and May 2006.
106.	As to the other terms of the policy, they, on their face bind the parties to it, namely the insureds and the insurer, but not anyone else.
i)	 By clause 6.3, the insured agreed that he and/the Appointed Representative should immediately notify Templeton of the discovery of any fact or evidence or other matter materially adversely affecting or which might materially adversely affect the insureds’ prospect of success in the proceedings. It is significant that the parties provided for this express obligation but for none other to rest upon GWM, vis a vis Templeton.
ii)	Under clause 7.1 of the policy the insured was required to conduct proceedings with all due diligence and in as economical a manner as possible consistent with a full pursuit of the proceedings.  The insured agreed to comply with all rules of court and orders made by the court and to follow all reasonable advice given by the Appointed Representative.
iii)	Clause 7.2 provided that the insurers should have direct access to the Appointed Representative at all times and that the insured should co-operate fully with the insurers in all respects.  The insured and the Appointed Representative should each keep the insurers fully and continually informed of all material developments regardless of any questions of privilege or confidentiality owed by the Appointed Representative to the insured.  
iv)	Clause 7.3 provided that “at the request of the insurers, the insured shall instruct the Appointed Representative to produce to the insurers any documents, information or advice in the Appointed Representative’s possession and further shall give the Appointed Representative such other instructions in relation to the conduct of the proceedings as the insurers may require”.
107.	No one contends that GWM was a party to the insurance policy, with the result that any terms in that policy which provide that the Appointed Representative is to do something can only place an obligation upon the insured to procure or ensure that the Appointed Representative does what the policy requires.  The GLO Applicants could therefore be liable to the insurers for any breach of the policy by their Appointed Representative, GWM..
108.	GWM were the solicitors to the Claimant Miners, acting on their behalf, whether any were identified or not, in obtaining the ATE insurance for them.  GWM was also acting on its own behalf in the hope of creating business and profits for itself by concluding CFAs with the GLO Applicants and pursuing successful claims for them.  GWM was the Appointed Representative under the policy to act for the GLO Applicants.  GWM owed duties to the GLO Applicants as their solicitors not only to advise them in relation to the proceedings and to conduct the litigation on their behalf with due skill and care but also to advise them in relation to the ATE insurance which it had obtained on their behalf.  GWM therefore was acting for the GLO Applicants in connection with the ATE policy and, apart from the authorisation given to it to issue policies of insurance on behalf of Templeton it had no express obligations towards Templeton, apart from the duty undertaken in the proposal form, which tallied with the obligations of the GLO Applicants under the policy, to keep Templeton informed of any adverse developments in the proceedings.
109.	The interests of the GLO Applicants and Templeton could plainly become adverse, in the event that Templeton sought to increase the premium or cancel the policy under the terms of clause 3.2 of that policy in the event of matters emerging which materially adversely affected the insured’s prospect of success in the proceedings.  Equally, under clause 10, the insurers were entitled to avoid the policy if there was non- disclosure or misrepresentation of facts or untrue statements made by the insured at the inception of the policy or at any time throughout the course of the proceedings.  Such avoidance on the face of the policy entitled the insurers to recover from the insured all the legal costs previously paid out under the policy whilst the premium was stated to have been fully earned.
110.	Furthermore, clause 8 required the insured to accept any sum in settlement of their claims which Templeton, in its sole discretion, considered acceptable, whether or not the insured, their solicitors or Counsel considered that offer acceptable.  Furthermore, any compromise, discontinuance or withdrawal of proceedings by the insured without the prior written agreement of Templeton gave rise to no liability of Templeton under the policy by reason of clause 8.2.
111.	In these circumstances, if GWM were to owe the duties to Templeton for which Templeton contends, it could find itself with a conflict of interest.  This could not arise at common law but only by express agreement.  Because GWM acted as the GLO Applicants’ solicitors, it could not lawfully accept duties to third parties which were in conflict with the duties it owed to its clients, without their informed consent.
112.	Moreover, the structure of the arrangements militates against the imposition of any such duty because the direct proximate relationship is one which arises because of GWM’s position in acting on behalf of its clients.  It could not be just and reasonable to impose such a duty in such circumstances with the possibility of creating a conflict of interest for GWM.
113.	Under the terms of the policy, the duty to conduct proceedings diligently and economically rested upon the insured under clause 7, as did the obligation to instruct GWM in accordance with Templeton’s requirements if any.  Templeton itself had no power to give direct instructions to GWM because GWM did not act for them.  
114.	Under clause 4 of the policy, observance of the terms and conditions of it was to be a condition precedent to any liability of Templeton to make payment under it.  That obligation rested upon the insured under the policy who was bound also to procure that the solicitors also complied.  Similarly, clause 5.3 provided for an exclusion from indemnity in respect of legal costs arising from any delay or other default by the insured during the proceedings and/or in connection with any order of the court.  
115.	What emerges plainly from the provisions of the policy is that Templeton had rights against the GLO Applicants in relation to the grant of an indemnity under the policy in the event of failure by the GLO Applicants or their solicitors to observe the terms of the policy.  There was therefore no need for any duty to be owed directly by GWM to Templeton because adequate redress for Templeton appeared in the policy terms.
116.	Moreover, should payment be made under the policy, Templeton would be subrogated to the rights of the GLO Applicants, with an express provision to this effect in clause 9 so that it would be in a position to sue GWM in the name of the GLO Applicants if GWM had failed in its duties in a manner which caused loss.
117.	Although therefore it was undoubtedly foreseeable that if GWM failed to conduct the proceedings with due care and skill, an adverse costs order might be made against the GLO Applicants which would result in a prima facie claim under the ATE insurance, Templeton had remedies under the policy itself against the GLO Applicants in such circumstances and, even if it paid out, was in a position to pursue GWM in the name of the GLO Applicants by reason of its subrogated rights.  Any direct duty owed by GWM to Templeton would create potential conflicts of interest for GWM with its duties to its own clients and the fact that there was an express undertaking in the proposal form is a clear indication of the absence of any other duties owed to Templeton when acting as solicitors to its own clients.  In these circumstances it cannot be fair, just and reasonable to impose the duty of care to Templeton which is alleged by it, upon GWM.
118.	Nor can Templeton’s reliance on its contract with GWM yield any different result. Whilst its argument would have been strengthened, had I found there to be an implied of the kind for which GWM contended, namely that Templeton would honour the insurance policy with the Claimant Miners, the reasons given above, which apply to the imposition of a duty of care in tort are equally applicable to the imposition of such a claim in contract. Whilst the imposition of a duty of care would give rise to some reciprocity in these circumstances, I cannot see that there is, given the structure of the arrangements between the parties, any room for such a duty to be implied, whether or not GWM’s claim for an alleged implied term is upheld. In the absence of such an implied term in GWM’s favour, even the reciprocity argument disappears.
Counsel’s Duty of Care
119.	It is common ground that the solicitors owed a duty of care to the Claimant Miners who instructed them and that Counsel owed a similar duty of care to them in advising and conducting the GLO application and litigation.  Once again Templeton alleges a direct duty of care owed by Counsel to Templeton which is denied.  No general form of retainer is alleged so that it is a general duty of care in tort which is said to arise.  This argument faces even greater difficulties than the submission that GWM owed a duty of care to Templeton.  
120.	The problem of potential conflict of interest is just as acute here as it is for GWM.  The existing duties owed by Counsel to the Claimant Miners militate against the existence of any duty owed to a party whose interests could readily become adverse.
121.	It is unnecessary for such a duty of care to be imposed because an ATE insurer must be taken to be capable of protecting its own interests and to take such advice as it wishes in relation to its own position, whether that turns out to be favourable to or adverse to the interests of the insured.
122.	The general structure is once again clear.  The barristers owed duties of care to the insured whilst the insured owed the insurer a duty to inform the insurer of any advice given in whatever terms may have been agreed in the insurance policy itself.  I have already referred to the relevant terms of the policy, as set out earlier in this judgment, which placed obligations upon the GLO Applicant Claimant Miners and to the proposal form and other arrangements which placed particular duties on GWM.  There is no suggestion anywhere in the package of documents submitted to the insurers at the end of August 2005 of any duty owed by Counsel to the insurers at all.  Express duties rest upon the insured in relation to the conduct of proceedings under clause 7 including the obligation to follow all reasonable advice given by GWM and providing for the insurers to have direct access to GWM.  The Claimant Miners were obliged to keep Templeton informed of all material developments and to procure that GWM did so also.
123.	Under clause 8 the Claimant Miners were obliged, at their own cost, if requested by the insurers to provide an opinion of Counsel on the acceptability of any settlement offer or payment into court but beyond that, there is no reference to the position of Counsel in the ATE insurance policy.  It is worth noting also, at this stage, that the insurance policy was to indemnify the Claimant Miners against Own Disbursements, which here essentially meant their own counsels’ fees. 
124.	The barristers here, initially Mr Stephen Powles QC and Mr Oliver Campbell, and subsequently Mr Andrew Prynne QC were never given any direct instructions by Templeton at any time.  Nor does it appear that Templeton ever asked GWM to procure advice from Counsel for them save in two particular respects.  The evidence of Mr Andrew Prynne QC is that he was informed that GWM needed a written opinion to give to their ATE insurers in relation to the validity of the underlying claims against Raleys.  This resulted in a short written opinion by Mr Andrew Prynne QC and Mr Campbell dated 1st February 2006.  In March 2006 Mr Edwards was seeking to obtain additional insurance cover from Templeton because the limit of indemnity of £1 million by then was plainly insufficient and the question arose as to whether or not Templeton could issue more than one policy with a £1 million limit in respect of claims against different defendants.  That appeared to be a possibility, provided that the claims were not consolidated.  On 29 March 2006 Mr Campbell produced a note for Templeton in which he expressed the view that the claims were unlikely to be consolidated since that would have been impractical, although he took the view that some of the claims might well be stayed since the court was likely to want to determine the validity of the UDM/Vendside agreement as the first issue.  It was very much in the Claimant Miners’ interest for GWM to obtain counsel’s advice on these matters for furnishing to Templeton.
125.	In relation to the overall merits of the claim or the GLO application, Templeton never sought such advice and, until production of the ATE policy around 13 March 2006, shortly before the GLO application hearing on 3 April, Counsel did not know the terms of the ATE policy nor the terms of any reporting obligations owed by GWM to Templeton.  
126.	As set out above, when an ATE insurer agrees to provide such insurance, it is a matter for that insurer to assess the risk it is undertaking.  If it wishes to take legal advice on it it is able to do so.  Templeton chose to agree insurance without making such enquiries in the present case and chose to do so on the basis that a GLO was to be sought.  There was therefore no reason for Counsel at any time to consider that Templeton needed any direct advice from them.  Counsel were in regular contact with Mr Edwards, Mr Evans and Mr Kostenko of GWM and, apart from enquiries about the existence and terms of policy coverage, which became a matter of acute concern between December 2005 and April 2006 in the context of making the GLO application, Counsel had no cause to consider the ATE insurers’ position in the context of their retainer from GWM.  
127.	I can see therefore no basis for any duty of care owed by Counsel to Templeton for all the reasons given in relation to the position of GWM and for the additional reasons that appear here.
The Alleged Negligence of GWM and Counsel
128.	There is no issue as to the appropriate criteria to be applied in determining whether solicitors or Counsel were negligent or in breach of duty.  Regard must be had to any contractual obligation to ascertain what was the scope of the duty but a solicitor is required to exercise reasonable care and skill in the performance of his functions and the standard to be applied is that of the reasonably competent solicitor.  The test is what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession.  A number of general obligations can be spelt out for the solicitor – 1) to be skilful and careful: 2) to advise his client on all matters relevant to his retainer so far as may be reasonably necessary: 3) to protect the interests of his client: 4) to carry out his instructions by all proper means: 5) to consult with his clients in all questions of doubt which do not fall within the express or implied discretion left to him: 6) to keep his client informed to such an extent as may be reasonably necessary, according to the same criteria (see Jackson & Powell on Professional Liability at paragraph 11-082).  A solicitor is not expected to be faultless in his judgment or to possess encyclopaedic knowledge of the law and, in determining whether the solicitor has exercised reasonable skill and care, he should be judged in the light of the circumstances at the time.  Actions or advice may with the benefit of hindsight be shown to have been wrong “but hindsight is no touchstone of negligence”.
129.	In Regent Leisuretime Ltd v Skerrett [2006] EWCA Civ 1184, the Court of Appeal had cause to consider the position where solicitors were sued for negligence alleging that they had been at fault in failing to advise on and institute proceedings before a cause of action became statute barred.  They had relied upon the advice of Counsel that the claims in question were unsustainable.  In that decision of the Court of Appeal, Sir Peter Gibson with whom the other members of the court agreed, referred to the first instance judge’s summary of the law without suggesting that it was in any way deficient.  The summary was as follows:-
“1.	Generally a solicitor is entitled to rely upon the advice of properly instructed counsel. 
2.		However he must not rely on such advice without exercising his own independent judgment.
3.		If he thinks the advice is obviously wrong, he must reject it.
4.		The more specialist the field, the more reasonable it is likely to be for the solicitor to accept and act on counsel’s advice.”
130.	The position here is that the three Counsel instructed to act were all Counsel with extensive experience in the handling of multi-party litigation.  Each had experience of personal injury, product liability and health and safety claims.  Mr Andrew Prynne QC had particular experience of large scale product group action litigation.  Insofar as any Counsel could be expected to have the expertise necessary for the launching of group litigation and an application for a GLO, these Counsel plainly had the required competence, although GLOs could not by any means be said to be common in 2005-06.  Mr Edwards was a solicitor with GWM without any specialist knowledge of group litigation or applications for a GLO and relied upon the advice of Counsel in relation to this.  Whilst he formed the view very early on that a GLO was the appropriate way to proceed, his evidence, which I accept, was that he would have accepted the advice of Counsel that it was not an appropriate way to proceed, had they so advised.  The position in relation to this action differed from that in relation to the two other multi-party actions in which he was involved where Mr Stephen Powles QC advised him that neither was suitable for a GLO.  He accepted that advice on each occasion.
131.	The evidence is that at all times Counsel considered that a GLO application was an appropriate application to make and that the litigation could only proceed if such an order was made.  Events since the failure of the application have demonstrated that there was no other way of proceeding.  Of the two individual cases which were being pursued at the time in County Courts as small claims (one of which was later transferred from the Small Claims Track to the Fast Track) one, Young, seems to have disappeared without trace.  The other, Strydom, was a case being pursued where actual claims handling work had taken place and where the Unfair Terms in Consumer Contracts Regulations did not apply and therefore fell into a rather different category from the vast majority of the cases for which the GLO was intended.  
132.	Decisions of the Solicitors Disciplinary Tribunal against Solicitors in the firms of Beresfords, Raleys and Ashton Morton Slack in 2008-09 and against Solicitors in Wake Smith early this year reveal failures on the part of these Solicitors to observe the Solicitors Practice Rules and Codes in relation to the NUM agreements and the UDM/Vendside agreements which were the subject matter of the intended GLOs.  Some solicitors were suspended and others struck off whilst others were fined.  In mitigation some had entered into agreements with individual miners to repay the sums which had been deducted under these agreements by the unions as well as other sums which the solicitors had put into their own pockets.  There has however been no recovery through any civil action to which any party could point me.  Given the huge number of individual cases where such deductions were made, the grievance about which the MPs complained has, it would appear, largely remained unaddressed, with many miners deprived of compensation which they should, it may be thought, rightfully have received.  Such amounts are small on an individual basis but amount in aggregate to a large sum.
133.	The evidence of Mr Edwards, Mr Andrew Prynne QC and Mr Campbell was all to the same effect.  Each considered that a GLO application was the only way in which Claimant Miners could obtain recovery from the UDM/Vendside or from the firms of solicitors targeted as GLO Respondents.  Those firms of solicitors were picked out as firms which had handled a large number of claims or were, in the MPs’ minds, guilty of particularly grave misdemeanours in the context of depriving miners of elements of their compensation.  Although Sir Michael Turner ordered disclosure of individual cases by these solicitors prior to the service of the generic points of claim by the GLO Applicants, before ruling on the GLO application itself, the underlying arrangements between the solicitors and UDM/Vendside and between Raleys and the NUM would not appear in any individual file if there were global arrangements between the solicitors and the unions of the kind which were suspected and which, to an extent, have come to light in these Solicitors’ Disciplinary Tribunal proceedings.
134.	In the generic Particulars of Claim which were drafted by Mr Campbell and vetted by Mr Andrew Prynne QC the GLO Applicants set out the claims they were able to make on the basis of the limited discovery given.  The first paragraph drew attention to the absence of disclosure from Wake Smith, from the UDM and very limited disclosure from Vendside.  Two versions of the Vendside agreement were pleaded, although it became apparent that there were in fact five versions into which miners had entered at one time or another.  
135.	The generic particulars pleaded implied terms of the retainer between the Solicitor Respondents and the Claimant Miners for whom they acted.  These amounted to obligations to act in good faith, to act in the client’s best interests, to inform of any potential conflict of interest, to act with reasonable care and skill, to provide advice as to the funding of the claim, to act in accordance with the Solicitors Practice Rules and not to accept instructions from a client in breach of the Solicitors Introduction and Referral Code, without the consent of the client to that breach.  Similarly implied duties were alleged against Vendside to act in good faith, in the client’s best interests, with reasonable care and skill and to provide advice as to funding.
136.	It was alleged that UDM/Vendside misrepresented the position to the Claimant Miners and acted outside the terms of their contracts by claiming and obtaining payments from the claimants’ compensation from the DTI.  The UDM and Vendside did not incur or generate any costs in pursuing the claimants’ claims apart from the costs which they recovered from the DTI under the tariff scheme and did not provide any valuable consideration to the Claimant Miners in return for the payment to them of the sums taken from their compensation payments.  Where Vendside had not referred the claim to a solicitor, it also breached its duty by failing to advise the Claimant Miners that the agreement was not enforceable and that they were under no obligation to pay the fee to Vendside.  Vendside failed to give adequate advice as to how the claim could be funded, namely by telling them that representation could have been obtained for the purpose of bringing the claim without having to cede any payment out of the compensation received.  Furthermore, in respect of agreements made after the commencement date of the Unfair Terms in Consumer Contracts Regulations 1999, the term in the Vendside agreement which required the Claimant Miner to make a payment was said to be unenforceable under Regulation 8(1) and was unfair.
137.	As against the solicitors, it was alleged that they had failed to give proper advice to the Claimant Miners as to how the claims were being or could be funded and thereby failed to act in the claimants’ best interests.  They had failed to advise that the costs of a successful claim were to be met by the DTI under the tariff scheme and that even if the claim was unsuccessful there would be no liability to pay the DTI’s costs.  They also failed to give any advice to the Claimant Miners as to the proper interpretation, enforceability or lawfulness of the Vendside/UDM agreement.  They also failed to advise the Claimant Miners to seek independent and impartial legal advice as to the lawfulness and effect of those agreements.  It was pleaded furthermore that the solicitors had entered into an agreement or arrangement with the UDM or the NUM to collect a fee under an agreement the union had with the Claimant Miners which the solicitors knew or ought to have known was not enforceable which gave rise to a conflict or potential conflict between the interests of the unions and the Claimant Miners.
138.	Breaches of Rule 9(1) of the Solicitors Practice Rules 1990 and section 23 of the Solicitors Introduction and Referral Code 1990 were also alleged.  These occurred when the solicitor defendants entered into arrangements with the UDM, Vendside or the NUM for the introduction of clients where UDM, Vendside and the NUM were to receive contingency fees, amounting to the deduction made from compensation if the claim proved successful and/or by the provision of what amounted to a referral fee to the unions in the shape of the deductions made from the compensation and paid to them.
139.	Whilst there were specific allegations made against specific firms of solicitors, there were, in these circumstances, a number of issues which were common to the claims which the GLO Applicants wished to pursue. 
140.	It can be seen from the terms of the Solicitors’ Disciplinary Tribunal decisions that the claims against the solicitors appear to have had a good arguable basis in fact and those against the unions/Vendside on their face raised arguable issues both of fact and law.  The arrangements between the solicitors and the unions cried out for investigation as the miners’ MPs were saying.  
141.	It is not necessary to explore in detail the course which the GLO application took but the following are the key features.  
142.	From June 2005 onwards GWM was seeking to bring proceedings as soon as possible with CFAs and ATE insurance.  GWM was under pressure from the MPs to do so and to tie the commencement of proceedings in with press publicity which would encourage claimants to come forward.  Mr Edwards considered the claims to be good.  GWM was keen to be the lead solicitors in handling what Mr Edwards considered would be a huge number of claims running into many thousands.  GWM was also motivated by the hope that, in addition to individual miners instructing GWM to recover the deductions from compensation made, miners would also transfer ongoing claims under the CHAs from the “offending” solicitors to GWM.  There can be no doubt that GWM was so keen to institute proceedings that it did not observe all the usual pre-action protocols nor obtain the necessary information from clients, nor obtain an insurance policy at this early stage.  It was only after consulting Mr Stephen Powles QC and Mr Campbell that appropriate letters before action were sent and sufficient information obtained to launch the GLO application on a proper footing.  
143.	It does not matter whether or not Mr Powles advised that a GLO application was appropriate at the end of June because, as soon as Mr Campbell got involved, he considered the position, required Mr Edwards to obtain further information and came to the view that a GLO application was the right way in which to proceed, whilst seeking to get as much information as possible and to encourage GWM to bring as many claimants on board as possible.  In his statement he describes the steps which he took including drafting letters before action in July and a draft witness statement from Mr Edwards which included a statement that an ATE insurance policy had been obtained, which was what Mr Edwards told him.  Mr Powles approved the draft witness statement in July but on Mr Campbell’s say so, no application was issued whilst exchanges of correspondence took place with potential respondents.  From the outset some of the respondents’ solicitors were saying that there was an insufficient cohort of potential claimants to apply for a GLO and making the same points that they were later to make at the directions hearing in December and hearing in April 2006.
144.	On 5 July 2005 there was a special review hearing of the Respiratory Disease Litigation, held by Sir Michael Turner.  The transcript of that hearing was made available to Mr Campbell who saw from it that there were recognised to be serious issues as to the lawfulness of the Vendside agreement with the miners and as to the conduct of many of the solicitors who had acted on behalf of those miners.  Counsel for the Law Society made it clear that the lawfulness of the Vendside agreement might not be the be all and end all of the solicitors’ professional duties and stated that the Law Society had a concern as to whether solicitors were acting in breach of Rule 9 of the Solicitors’ Practice Rules.  GWM then exchanged correspondence with Sir Michael Turner who replied to say that the legality of the agreements between UDM, Vendside and any other claims handling organisations was not a matter of interest in the litigation of which he was the managing judge.  He said that was a matter for the Law Society to investigate and possibly litigate with interested solicitors.  No one however took any steps to have the issue relating to the Vendside agreement resolved.
145.	On 4 August Mr Powles and Mr Campbell produced a written note of Advice in which it was recognised that issuing civil claims against solicitors might result in a stay of complaints to the Law Society but that, if the individuals wished to pursue claims against UDM or Vendside, it would not, in practical terms, be possible to do so without joining the solicitors as parties.  They did not consider it sensible for the claimants to issue proceedings against Vendside or the UDM without joining the solicitors firms as defendants nor for the claimants to apply only to the Law Society.  They advised that what was required was good case management under a GLO.  It was preferable to apply for this rather than letting matters develop in an unstructured way, whatever orders resulted from that application.  At no time thereafter did Mr Campbell ever take any different view about the appropriateness of a GLO.  Nor did Mr Andrew Prynne QC when he was instructed in November 2005.  
146.	Throughout August and September Mr Campbell continued to advise on the obtaining of evidence and on the exchanges of correspondence with potential respondents.  GWM were trying to “drum up” clients and were optimistic of finding thousands out of 670,000 miners, former miners or relatives of miners who had made claims under the DTI schemes.  Over 150,000 of those had been dealt with by Vendside.  
147.	Following a meeting on 19 October between GWM and Mr Campbell at which the identity of the Solicitor Respondents was discussed, the GLO application was issued on 26 October.  The decision was taken not to join the NUM but Raleys, solicitors who had acted for NUM members, were included.  The NUM could not have been joined at that stage in Mr Campbell’s view because he had insufficient information properly to formulate and particularise a claim against the individual branches and had not been able to write letters before action.  Special consideration was given to the position of Raleys in a telephone conversation between Mr Campbell and Mr Edwards on 25 October.  Mr Edwards was keen to include them but not the NUM in an application which otherwise covered the UDM/Vendside and solicitors who had acted for their members.  Mr Campbell expressed reservations but did not think the decision wrong.  At a later stage in the proceedings both Mr Campbell and Mr Andrew Prynne QC came to the view that Raleys were an appropriate party to be included and that the case against them was particularly strong in as much as cases had been referred to Raleys before any agreement with the NUM was signed.  Miners had entered into contracts with Raleys permitting Raleys to deduct a sum of money from compensation in order to make a payment to the NUM in circumstances where there were other solicitors in Yorkshire eager to represent miners without making any deduction from the compensation because the tariff costs were sufficient for solicitors to make a good profit under the CHAs.  Raleys had a conflict of interest as they had a close relationship with the NUM and were receiving referrals from them.  This has since been established by the Solicitors’ Disciplinary Tribunal.  
148.	Mr Campbell identified what he considered to be common issues in the claims against Raleys and the claims against the other solicitor Respondents as well as overlapping issues between the claims against the UDM/Vendside and the solicitors who received instructions from them.  
149.	On 27 October Mr Campbell attended a brief ex parte hearing before Master Turner, the then Senior Master, at his request so that Mr Campbell could explain the nature of the application.  CPR 19 required applications to be made to the Senior Master for him to make directions for the parties to provide dates to avoid and time estimates for a hearing before him to determine whether or not there should be a GLO.  However by a letter dated 11 November Master Turner wrote to the parties saying that Sir Michael Turner had directed that the application for a GLO be made to him.  It appears that he did so at the instigation of the Claimants Solicitors Group, which liaised with Sir Michael Turner over the CHA system and had an interest in protecting it and their business from what they presumably perceived as the predations of GWM.
150.	When Mr Andrew Prynne QC was instructed in November there was a joint consultation in which practical matters were discussed in relation to the forthcoming hearing.  
151.	A directions hearing then took place on 7 December 2005 which lasted until 7 pm that evening.  Sir Michael gave detailed directions at that hearing and I accept the evidence of Mr Campbell and Mr Andrew Prynne QC that nothing he said and nothing which took place on that day suggested that the application was doomed to fail, although it was plain that there was heavy opposition from all the GLO Respondents.
152.	Included amongst Sir Michael’s directions was an order that the GLO Applicants were to state whether or not they were prepared to disclose the ATE insurance policy or as a minimum to provide the information required by paragraph 19.4 of the Practice Direction.  He also required each of the solicitor respondents to disclose from the files of each Applicant who had indicated a claim against that Respondent the documents to which such Applicant would be entitled on the basis of a signed request for his or her file and to disclose whether they had been requested by the union or Vendside to make deductions from awards of compensation for each such applicant.  The GLO Applicants were then to serve generic Particulars of Claim by close of business on 20 January and to particularise in a schedule each of the claims made by each of the 69 applicants so that each Respondent was aware of the particular basis upon which liability was alleged against it.  
153.	Although formally neutral, the Law Society, by Counsel present at that hearing, made it plain that the asserted grievances of the claimants had to be aired and resolved and that the GLO appeared to it to be an appropriate method of procedure.
154.	The directions of Sir Michael required GWM and Counsel to do a lot of work in producing generic Particulars of Claim and detailed schedules in respect of  each of the 69 claimants.  These were the subject of discussion between Counsel and solicitors in December where for the first time Counsel were told that an ATE policy had not yet been issued, even though Mr Edwards’ statement had said that a policy had been obtained.  Mr Andrew Prynne QC told Mr Edwards that he’d been reckless in issuing the application without an issued policy.  The reasons which lay behind Templeton’s failure to issue the policy despite having agreed to do so back in June/July/August 2005 remain obscure but appear to have related to the fact that Thompsons, a firm of solicitors who had acted for the NUM, was a client of Templetons and was making representations to it not to get involved in this action.  
155.	On 15 November Mr Maule of Templeton had written to Mr Edwards to say that Templeton’s position was compromised by virtue of a conflict of interest in relation to Thompsons and that Templeton could have no further involvement in the risk.  Mr Fresson however secured the retraction of this by 23 November though, despite Thompsons’ failure to enter into mediation, Templeton was now saying that it would not give cover for a claim against Thompsons.  By the time of the directions hearing in December Templeton had issued no formal record of cover.  The Order made at that hearing required the GLO Applicants to state whether they were prepared to disclose the policy.
156.	On 14 December, following the hearing and a conference with Counsel thereafter, Mr Fresson informed Mr Edwards that the insurance documentation was being issued.  On 15 December Mr Brunswick wrote to Mr Edwards asking him to accept the letter as confirmation that cover was in place and stating that Templeton was in the process of issuing the relevant policy documentation.  In consequence on 16 December Mr Edwards confirmed to Sir Michael that the GLO Applicants would disclose details of the cover in the course of the next week.  On 21 December GWM was pressing Mr Fresson for action on this front and on 22 December Mr Edwards was pressing Mr Maule for at least a cover note.  By a reply of that day Mr Maule was saying that he would fax a summary of the cover either that afternoon or first thing the next day and he did so that evening by sending a summary of insurance cover in the shape of the schedule to the policy referring to the insured as Hobson & Others and/or CMCA members with the opponent specified as the UDM and Others.  In the email he stated that he was unable to furnish GWM with a policy wording at this stage as their existing wordings did not cater for group litigation but hoped to do so by 31 December.  This appears a lame excuse as the insurance wording finally produced differed only in very small respects from the standard form ATE insurance wording which Mr Edwards had seen and utilised in July and August of 2005.
157.	The disclosure of this insurance information to the GLO Respondents gave rise to a series of questions about the terms of the ATE policy in January of 2006 which went on until the hearing of the GLO application itself on 3, 4 and 5 April.
158.	In the meantime further consideration was given to the issue of Raleys and the NUM.  It is plain from Mr Andrew Prynne QC’s evidence and the notes of consultations that consideration was given to the very issues which came to dominate the hearing in April.  The view was again taken that Raleys should be pursued but the NUM should not.  The question of proportionality had loomed large in the submissions made at the December hearing by the GLO Respondents.  Great emphasis was placed upon the size of the claims, the number of the Applicants and the costs of the Respondents.  The difficulty in introducing yet further Respondents was the increase in costs which would result without necessarily a sufficiently large increase in the number of Applicants.  Counsel were unaware of the Thompsons problem at that stage and the potential impact in relation to the NUM, though it appeared likely that Raleys might themselves bring in the NUM.  GWM appeared only to have a relatively small number of clients who wished to pursue a claim against the NUM and to bring them in to the GLO application at that stage would further complicate the application and add to its expense.  It was on 1 February 2006 that Counsel prepared a joint brief opinion on the substantive merits of the prospective claim against Raleys.  This was prepared at the request of Mr Edwards for Templeton.
159.	It was on 13 March that GWM and Counsel finally received a copy of the ATE policy and schedule issued by Templeton.  An order had been made for its disclosure by 10 March but Templeton had failed to oblige.  On 17 March UDM and Vendside issued a further application seeking other documents relating to the ATE policy and its issue because of various questions which arose in relation to its terms, which were in part inconsistent and because of the references to the premium being insured.
160.	At this time Mr Edwards was trying to obtain increased cover from Templeton and on his evidence obtained an agreement in principle from Templeton to provide initially £4 million worth of cover and, because of the terms of the existing schedule which referred to two potential Respondents or classes of Respondents, latterly, to £3 million of cover in 3 different policies.  It was in this context that Mr Campbell was asked to produce an advice for Templeton dated 29 March about the unlikelihood of consolidation of the claims.  
161.	Over the weekend of 1/2 April, Mr Andrew Prynne QC produced an aide memoire for his opening submissions to Sir Michael Turner at the hearing scheduled for the Monday.  He addressed the court on the Monday on the basis of this note, which sought to cover all the objections raised by the GLO Respondents.  
162.	At the earlier directions hearing in December the position papers of the GLO Respondents had raised a number of issues.  The primary points made were as follows.  First, the application was said to be premature as there were insufficient applicants with claims of insufficient value to justify the costs of a GLO.  There was the suggestion of a necessary threshold number.  Secondly, the GLO application was said to be inadequately particularised in as much as the common issues of fact or law had not been sufficiently identified for group litigation.  Thirdly, it was suggested that a preliminary hearing would be required to determine the enforceability of the Vendside/NUM agreements with the miners.  Fourthly, reservations were expressed as to the cost effectiveness of the litigation.  Fifthly, the question was raised as to payment of the GLO Respondents’ costs in the event that they were successful.  Concern was also expressed by the Law Society as to why the NUM had not been made a respondent.
163.	Two claims concerning the enforceability of the Vendside agreement were stayed as a result of the GLO application.  The first of these was the claim where Vendside was suing Mrs Young for payment of its fee in the Worksop County Court.  The second was Mr Strydom’s claim against Vendside for the return of a fee in the Mansfield County Court.
164.	At the December hearing Sir Michael Turner had also ordered the GLO Applicants to state whether they would be joining any other unions (NUM was in the judge’s mind) and whether they had any objection to issues between the Applicants and the Non Solicitor Respondents being tried before the issues between the applicants and the solicitors.  GWM thereafter confirmed that the NUM were not to be joined and that they did not oppose the union/Vendside agreement issues being heard first.
165.	At the 3 day hearing in April the GLO Respondents put in position papers raising the same points as before with the following additions.  First, it was said that in the light of agreement that the issues against the non solicitor respondents be tried first, there was no need for the solicitors to be made party to the GLO application.  Secondly it was said that UDM and Vendside had adequate assets to meet any claims, particularly given the low value of the GLO Applicants’ claims in total.  There were then 69 applicants with a total of £23,755.77 worth of claims.  Nearly 1,500 miners had however intimated they wished to bring claims falling within the proposed GLO issues and GWM’s expectation was that, if the GLO order was made, thousands more claimants would join in court regulated proceedings.  The Respondents estimated their costs of the GLO application alone as something in excess of £700,000 and they queried the adequacy of the ATE insurance with its £1 million limit, as well as its terms.  They pointed out the joinder of Raleys in the action but not the NUM.
166.	The criticisms made by the respondents were reflected in the judgment of Sir Michael Turner dated 18 May 2006.  He held that the GLO application was misconceived and constituted a gross abuse of the system which had been devised for the pursuit of group litigation where there was a valid group litigation issue.  He said that the application had been pursued in a manner that was heavy handed and inept and that there were features present which reflected no credit on those who had been responsible for bringing it before the court.  He determined that the primary issue was as to the legality or enforceability of agreements made between the UDM and individual claimants under which claimants agreed to pay to that union a proportion of the compensation awarded to them under one or more of the CHAs.  He then drew attention to the fact that the NUM had not been joined but there was a claim against Raleys who acted solely for the NUM Yorkshire and Lancashire areas.  He regarded this as a “glaring anomaly” in as much as the NUM area branches would be primarily liable to any Claimant Miners if sued and he decided that the failure to join such branches threw doubt on the practicality of the GLO application.  
167.	He held that the issues raised were not suitable for a GLO and in particular pointed to the fact that if claims succeeded against the unions and the claimants recovered from that source, there would be no loss to be claimed against the solicitors.  He held also that, if the claim failed against the union there would again be no loss suffered to claim from the solicitors.  He said that there were individual matters which arose with regard to the different solicitors and that the arrangements involving Raleys were different to those involving the UDM/Vendside and the UDM miners’ solicitors.  Misrepresentation claims were made which made the claims facts sensitive.
168.	The judge stated that GWM had failed to consider whether any other order might be more appropriate than a GLO and said it was not a proportionate way of determining the issues because it was not cost effective in the light of the gross imbalance between the costs incurred and to be incurred and the value of the claims.  He considered that what lay at the heart of all the cases was whether there was valuable consideration for the making of the agreements between the unions and the claimants, whatever form they took.  Once that issue had been determined in favour of a claimant, all the rest of the potential claims would, he said, have been settled by the unions concerned.  In his judgment there was no reason why this issue could not have been decided in a single or at most two or three test cases heard at the same time as or immediately one after the other.
169.	The judge was also highly critical of the applicants’ insurance position since questions had been raised in response to the disclosure of the policy, relating essentially to the premium.  It was unclear, so it was said, whether the premium was to be payable by the Claimant Miners, whether it was deferred, waived or insured in some way.  Having at first said that it was “insured”, Templeton ultimately sent a confirmation on 3 April saying that payment of the premium was deferred and that Templeton had made its own arrangements to cover the eventuality that the premium was not recovered from the GLO Respondents but that it was not prepared to disclose those arrangements.  The statement confirmed that if the applicants were successful in their claims they would be obliged to pay the premium, though they would seek to recover it from the Respondents.  If they were unsuccessful in their claims Templeton would decide how and whether they would seek to recover the premium.  In a further “confirmation” Templeton, on 6 April, stated that it had not effected insurance or reinsurance for the purposes of insuring the premium payable under the ATE policy. The different statements made by Templeton with regard to the ATE policy and premium payable gave rise to much criticism and some uncertainty as to the true position.
170.	In his judgment Sir Michael Turner said the court had been left in doubt with regard to the true scope of cover which existed and whether or not any liability for the premium rested on the individual claimants and what the extent of cover available was to meet the Respondents’ costs if the claim succeeded against the unions but failed against the solicitors.  He was concerned about the recoverability of the premium if the action succeeded and stated that questions arose as to whether the fact that the insured (the individual applicant) never came under any liability meant that the policy was void for uncertainty and the arrangements between the applicants’ solicitors and insurers were unlawful because they were champertous.
171.	He summarised the position in the following way:-
“71.	For the reasons discussed during the course of, and summarised in, this section of the judgment, this application fails and must be dismissed.  In summary, they are as follows:
1.		The court has not been persuaded that any, or any serious thought, was given to alternative means of adjudication of the underlying claims.  This feature would hold good even if there were no other means available.  Test actions and consolidation of the actions are two possibilities available for adjudication on the essential dispute.  It has not been demonstrated that either method was either inappropriate or inaccessible.  The reasons for rejection of the second alternative are nothing to do with the intrinsic merits of this procedure, but due to the extraneous circumstances of the insurance position in respect to the insurers involved and the solicitors Thompsons.  [Nothing said in this judgment is any reflection adverse to this firm which has been at the forefront in assisting the court in the resolution of the claims in the main proceedings, known as Griffiths v British Coal Corporation.]
2.		No group litigation issue has been sufficiently or precisely identified.  Even if it had, there is no justification for the inclusion of any of the solicitor Respondents in this application, since it has been accepted that in the first instance, at least, the action should proceed only against the non-solicitor Respondents, UDM/Vendside.  If the claims succeed against the union or its claims handlers, there is no reasonable likelihood of solicitors coming under any liability to the individual claimant, who will recover from UDM, or not at all.
3.		The claims made against Raleys have no natural affinity with the claims made against the other solicitor Respondents.  The only unifying feature is that all Respondents are solicitors and all claimants are miners or ex-miners.  This is plainly insufficient to a GLO support.  The agreements made between individual claimants and the unions were in different form, being, as they were, made between different parties occupying different positions with regard to each other.  Raleys acted as agents for the Yorkshire and Lancashire areas of the NUM in making the agreements with the individual claimants.  In any event, the primary liability must be that of the union, on the assumption that claims will lie.  It is inevitable that Raleys would issue third party proceedings against the union were the action to be brought only against them.  But this leaves open the position of the other sections of the NUM which in other parts of the United Kingdom “used” Thompsons as their panel solicitors.
4.		There are other unions and independent sections of unions who are not involved in the present application, which if it had validity ought to have been joined.  The Applicants’ solicitors have stated openly that it is not their intention to proceed against any other non-union entity.
5.		The gross imbalance between the costs incurred and to be incurred and the sums to be recovered.  On any costs benefit approach the court must reject the Group Litigation approach as a just means of resolving the dispute.
6.		Resolution of the validity and enforceability of the contract between the claimants and the UDM and the damages, if any, is a fact sensitive enquiry which a decision in the contractual issue alone cannot decide.
7.		The lack of any certainty about the sufficiency of the ATE insurance in terms of amount of cover and its enforceability.”
172.	The Judge awarded indemnity costs against the GLO Applicants and ordered an interim payment in the sum of £600,000 “to force the insurers’ hands”. On 23 May Brooke North, acting for the UDM/Vendside, wrote to Templeton seeking confirmation that the ATE policy would pay the adverse costs order. Without notifying GWM or the GLO Applicants, Templeton replied on 25 May to say that the policy was void ab initio. This was a stance which was not maintained in the Arbitration, but between May and December, Templeton failed to respond to letters from GWM and to say what its position was. Arbitration proceedings were commenced in January by QBE which had in the meantime concluded the Settlement Agreements to which I have referred earlier in this Judgment. Mr Wells on more than one occasion said that Templeton’s conduct could not be described as “Templeton’s proudest moment”, which in my view was a considerable understatement.   
173.	The claims of negligence against GWM and counsel, made by Templeton, are essentially based upon Sir Michael’s judgment.  It is not for me to criticise the judgment of a highly experienced Judge but, having examined the criticisms, I have however come to the clear view that, despite the failure of the GLO application, competent solicitors and competent Counsel experienced in the area of group litigation could justifiably take the view that a GLO was an appropriate way of proceeding and indeed was the only way in which the miners’ claims could reasonably and properly be dealt with by the courts.  Throughout their evidence, Mr Edwards, Mr Campbell and Mr Andrew Prynne QC maintained that not only was their position a justifiable one to hold but that they were right in considering that a GLO was the appropriate procedure and that Sir Michael Turner’s decision was wrong.  
174.	Mr Andrew Prynne QC prepared an aide memoire in writing which he presented to the judge in support of his application for permission to appeal which, unsurprisingly, was refused.  Following the hearing Mr Edwards, Mr Prynne, Mr Campbell thought an appeal was appropriate, notwithstanding the “case management” nature of the decision and the discretionary element involved.  In late May, shortly after the judgment had been delivered, Mr Edwards met with Mr Maule and Mr Fresson and discussed the decision and the question of an appeal.  On Mr Edwards’ evidence, which I accept, the position at the conclusion of the meeting was that Templeton had said it would meet the claim for adverse costs and provide cover for an appeal.  Instead of doing so however, without notifying GWM, it wrote the letter to Brooke North, who acted for the UDM/Vendside saying it had avoided the policy.  Counsel had not been paid their fees and declined to do any further work without payment and in the absence of any funding available, no appeal could be pursued.  
175.	There is nothing in the point that GWM and/or Counsel should have advised Templeton that alternative procedures to a GLO were available to pursue the claim, quite apart from the fact that Templeton accepted the risk on its own assessment of the merits of the claim being advanced by way of a GLO. There is equally nothing in the point that they should have kept Templeton informed of the extent of opposition to the GLO Application, of the grounds of it and the huge build up of costs in the process. Mr Fresson was the appointed conduit for information and he was on the telephone to Mr Edwards virtually every day and was in GWM’s office at least once a week. He was kept fully up to date with material developments and was in regular touch with Templeton in the Isle of Man. The requirement, of which Mr Maule was well aware, for increased policy coverage arose because of these problems and Mr Edwards visited the Isle of Man in the new year to talk about issues directly. Advice to the individual Claimant Miners was not required or appropriate, as long as proper steps were taken in the litigation.
176.	Whilst GWM undoubtedly was anxious to initiate the GLO application and thought to do so without appropriate exchanges of correspondence with the targeted defendants, Mr Campbell rightly slowed the process down and insisted that appropriate letters before action and consideration of the responses took place before the GLO application was issued on 26 October 2005.  Notwithstanding Sir Michael Turner’s views as expressed in his judgment, it is clear to me that proper consideration was given as to whether or not a GLO was the appropriate way forward before issuing the application and what the alternatives were.  These matters were further reconsidered throughout and in particular following the December hearing.  Mr Andrew Prynne QC’s submissions specifically dealt with the question of consolidation which was not a practical possibility and with a representative action which was not apt either as each claimant had his own claim.  
177.	Test cases were not appropriate outside the terms of a GLO because of the need to consider the facts of a sufficient number of cases in order to decide what would be appropriate test cases.  Appropriate sample cases could only be selected from a group, once the group had been identified.  In other words a sufficient number of cases had to be grouped together in order to find those which could be litigated in order to resolve all the main issues for the balance.  Moreover, the great advantage of a GLO, with proper organisation, would be that a lead test case would be binding on the others in the group or sub-group concerned.  Strydom, for the reasons already given, was not an appropriate case, and without transfer to the High Court would not have been of any use as a precedent in any event.
178.	The key question here however was always going to be the issue of funding.  GWM and Counsel always took the view that there was no possibility of obtaining funding for own costs or cover against adverse costs for unitary test cases.  The idea that any ATE insurer or funder would have been interested in supporting an individual claim worth £200-500, involving the complexities which arose here and the consequent legal costs, was, to their mind, absurd.  There was no realistic premium which could make such a risk worthwhile.  They were entirely correct in this view as was demonstrated by Templeton’s confirmation during the hearing, when specifically asked the question and by the fact that no such cases have in fact been heard (other than Strydom).  Legal aid was not available for unitary cases of that size or type and would not be available if there was an alternative source of funding in the shape of an ATE policy, as there was.  Moreover, the existence of ATE insurance redounded to the benefit of the GLO Respondents, should the claims fail, since they could recover their costs in such a situation whereas they would not have been able to do so if legal aid had been granted.  
179.	All these points which were made by Counsel at the time appear to me to have great weight and, with respect to paragraph 1 of the summary and conclusions of Sir Michael, in my judgment are effective to counteract the points he made in that paragraph.  It may be noted that Sir Michael appears there and elsewhere in the course of the proceedings to have been protective of the CHAs schemes and those involved, optimistically thinking, perhaps, that the Vendside fee was justifiable and that solicitors would not be capable of the actions to which the Solicitors Disciplinary Tribunals have referred.  
180.	It is equally hard to see how paragraph 2 of the judge’s summary and conclusions can be justified inasmuch as he stated that no group litigation issues had been sufficiently identified.  There were common issues in relation to the enforceability of the UDM/Vendside agreement and common issues as between the solicitors who had failed to give proper advice in relation to those agreements, whether they were enforceable or not.  Moreover the arrangements made between the solicitors and the unions/Vendside which underlay the individual claims meant that the claims against the union/Vendside on the one hand and against the solicitors on the other were inextricably linked.  Although by the time the matter was pleaded, there were no claims of conspiracy or inducement to breach of contract on the part of the unions, the generic Particulars of Claim set out the breaches by the solicitors of the practice rules and codes relating to the payment of contingency fees and referral payments.  The underlying unlawfulness of those arrangements with the inherent conflict of interest involved, both on the part of the solicitors and at least arguably Vendside could be said to vitiate the individual agreements and to render them unenforceable, as well as giving rise to a claim against the solicitors.  The claims against the solicitors, as Mr Campbell said in evidence, in fact, appeared stronger than the claims against the Unions/Vendside. The agreements, whether enforceable or not, ought never to have been made because of the breaches of the Solicitors’ Rules and Codes of Conduct.
181.	The generic Particulars of Claim identified several clear common issues including the enforceability of the Vendside agreements, the nature and scope of the duty owed by the solicitor respondents to a claimant to give advice as to the funding of his claim, whether the solicitors ought to have advised that it was not necessary to pay a proportion of their compensation to the union and whether the solicitors were acting in breach of their duties under the Solicitors’ Practice Rules and Referral Code.
182.	There were reasons to include the solicitors as respondents, regardless of the acceptance by the GLO Applicants’ Counsel that it would be appropriate for a decision to be taken on the enforceability of the UDM/Vendside agreement as the first issue. On that the solicitors would almost certainly wish to be heard, particularly given the express interest shown in this by the Law Society, which made its concerns known to the judge about the position of the solicitors in these arrangements.  
183.	The learned Judge said that if the claim succeeded against the Union or its claims handlers there was no reasonable likelihood of solicitors coming under any liability to the individual claimants who would recover from UDM or not at all.  The GLO Applicants through their Counsel maintained that there were serious doubts as to whether the UDM/Vendside would have sufficient funds to meet the claims of a substantial group of claimants.  Although Sir Michael found that there was evidence that UDM would be able to satisfy any judgment entered in respect of the specific claims thus far advanced and that, as at 31 December 2004, the UDM had a surplus of £1.5 million and Vendside had cash of £3.7 million and assets exceeding liabilities in excess of £6.6 million, there was no up to date information on their financial position and the GLO Applicants had found it impossible to obtain such.  Vendside had dealt with over 150,000 claims under the CHAs and there were approximately 670,000 claims in total.  If, as GWM and the MPs anticipated, there would have been an influx of claimants had a GLO been made, Vendside’s funds, when account was taken of costs, could readily have proved insufficient.  In dealing with the application for the GLO, Vendside/UDM said they had incurred costs of over £430,000, a figure which is hard to credit but which no doubt reflected the 9 consultations with Leading Counsel which must have included some advice on the merits of the claims.  
184.	In the summer of 2005, moreover, The Times had been reporting that various officials of the UDM and directors of Vendside were being investigated in relation to a large scale fraud in relation to their handling of the claims under the CHAs.  Mr Mann MP confirmed the existence of that investigation and there was therefore reason for concern that the UDM and Vendside might have very limited assets by the conclusion of a trial.  
185.	It was true to say that, if the claims had succeeded against UDM/Vendside  and they were good for the money, there would then be no loss to be recouped from the solicitor respondents.  If however the claim had failed against the Union/Vendside there was still the point to be taken about the unlawfulness of the solicitors’ conduct and their failure to advise about the dubious nature of the Vendside agreement.  The point was particularly strong against Raleys who had been involved with the Claimant Miners before they concluded an agreement with the NUM, but also operated in respect of solicitors who had received instructions after a UDM/Vendside agreement had been concluded by a miner, because of the antecedent underlying global arrangements.  
186.	Moreover, it could properly be said that the GLO claimants were entitled to decide whom to sue.  One of the problems in recruiting claimants for the proposed litigation was the loyalty which the mining community felt towards its unions and its distrust of lawyers.  GWM had attempted to recruit by means of advertising and roadshows in the mining communities but, to their disappointment, had signed up less than 1,500 miners at the time of the April hearing.  There was a reluctance on the part of miners to get involved with a further firm of solicitors and to sue their own union or union claims handling company.  Had however there been a group litigation order where applicants could target the solicitors who had handled their claims, rather than the union to which they felt affinity, claimants might well have flocked to join in a court regulated action where there was no risk to them, as GWM anticipated and hoped.
187.	Whilst therefore Sir Michael was right to identify a prime issue as the enforceability of the UDM/Vendside agreement in its various forms (of which five were known) and that this would be a good starting point, there was still scope for claims to be made against solicitors in a context where a Claimant Miner was entitled to choose his defendants and might well have wished to make a claim exclusively against his solicitors as opposed to his union.  It could validly be said that the only way in which such matters could be regulated was by way of a GLO, with differing groups or sub-groups.  
188.	To suggest as Sir Michael did in paragraph 3 of his summary and conclusions that the claims made against Raleys had no natural affinity with the claims made against the other solicitor respondents and that the only unifying feature was that all respondents were solicitors and all claimants were miners or ex miners is, to my mind, something of an understatement.  Whilst it is true to say that the NUM agreements and the UDM/Vendside agreements took different forms, the common underlying feature was the provision for deduction from the miners’ compensation of sums, said to be for claims handling purposes or the like, in a situation where the DTI was paying all the costs of these successful claims.  Moreover, for the reasons I have already given, the claim against Raleys was stronger than the claims against the other solicitors because Raleys had been instructed prior to the conclusion of the Claimant Miners’ agreement with the NUM branch in question.  Claims against Raleys alone might well have been a separate sub group in the group litigation.
189.	In paragraph 4 of his conclusions, Sir Michael drew attention to the fact that neither the NUM nor NACODS had been joined into the action.  In fact, the NUM consisted of various different branches round the country, so that joining the NUM meant in fact joining a number of additional defendants.  The decision had been taken not to do so after December when the point had been raised because of the arguments of proportionality which had also been raised at the December hearing.  Yet more Respondents would have resulted in increased costs on their part, as compared with the total claims and the aggregate limit of the ATE insurance cover.  
190.	It was in paragraph 5 of his conclusions that Sir Michael drew attention to the gross imbalance between the costs incurred and to be incurred and the sums to be recovered.  In holding that, on any cost benefit approach, the court should reject the idea of a GLO, it could be said that he failed to take account of the fact that disproportionality worked in both directions as Mr Andrew Prynne QC pointed out in his evidence.  The view of Mr Edwards, as expressed in his evidence and supported by the evidence of Counsel before me was that the GLO Respondents were effectively “churning”, with a view to increasing costs as much as possible, in order to demonstrate both the disproportionality of the claims to the costs and the inadequacy of the ATE insurance.  Given the size of some of the bills submitted by the GLO Respondents’ solicitors for their work in connection with the GLO application, this view is understandable.  Whether or not that was the case, it is plain that the GLO Respondents took the view that money was worth spending in relation to this matter in order to stifle the claims.  This is only explicable on the basis that there was perceived to be a potentially significant exposure on the part of the GLO Respondents in relation to a large number of potential claims of this kind.  The object was plainly to drive the GLO Applicants from the judgment seat and to prevent the determination of the issues which had been raised.  By successfully resisting the GLO, this objective was achieved. 
191.	In paragraph 6 of his summary and conclusions Sir Michael held that the resolution of the validity and enforceability of the contract between the claimants and the UDM and the damages suffered was a fact sensitive enquiry which a decision on the contractual issue alone could not decide.  The fact sensitive nature of the enquiry was said to depend upon the allegations of misrepresentations by the union and/or Vendside that the union/Vendside was providing valuable assistance to the Claimant Miners in recovering compensation whereas in fact it was doing nothing at all.  By the time of the April hearing the GLO Applicants were focusing on a generic misrepresentation in the UDM/Vendside agreement itself which would have obviated the need for any fact sensitive investigation in to the circumstances in which each and every Applicant who made a claim had come to conclude an agreement with the UDM/Vendside.  The misrepresentation was said to have become a term of the agreement.  Whilst reliance, on its face, provided a fact sensitive issue depending upon the evidence of each claimant, the reality would be that, if lead cases were run under the aegis of the GLO, the point would be determined on factual evidence in those lead cases.  Once that was done, experience of GLOs suggests that it would not be hard to evaluate the position with regard to the remaining cases and that there would be a tendency for them to fall into line in one way or another.
192.	The final paragraph of the summary and conclusions drew attention to the uncertainty about the sufficiency of the ATE insurance in terms of the amount of cover and its enforceability.  Although I have not set out in detail in this judgment all the difficulties which arose in relation to the ATE insurance policy, it is clear that all the difficulties which arose are attributable to Templeton and its own decision making and administrative processes.   Following requests to disclose the policy, an application seeking disclosure was issued on 21 February 2006.  In order to avoid a hearing GWM consented to an order requiring disclosure by 10 March which resulted in the issue as subsequent disclosure of the policy wording on 13 March.
193.	Issues still remained because of the terms relating to premium, as I have indicated above.  There had in fact been a decision by the Senior Costs Judge on 27 May 2005 in which he held that the fact that insurers waived the right to a premium did not make the insurance unenforceable or the premium irrecoverable from the losing party.  This was not of course a Court of Appeal decision though the principle was later affirmed by the Court of Appeal.  Sir Michael was therefore perhaps being cautious in expressing his concerns about the champertous nature of the policy and it could not seriously be doubted that there was £1 million worth of cover.  It could not be said that there was more than that although Mr Edwards, in his evidence, was clear that he had reached agreement with Templeton on £3 million worth of cover in March 2006 and there were emails to support that contention, but no commitment in writing from Templeton to that effect.  During the course of the hearing, further information was obtained from Templeton in purported clarification of the position but which served only to confirm Sir Michael’s suspicions that what had been said earlier was either inaccurate or unreliable and what was now being said could not necessarily be taken at face value.
194.	I conclude that the stance taken by GWM, Mr Campbell and Mr Andrew Prynne QC in relation to the seeking of a GLO was justifiable.  The fact that the application failed and that the judge was critical of their approach is not determinative.  Not only could competent solicitors and Counsel have taken the view that they did but it can be seen now, arguably, to have been a correct view.  The effect of Sir Michael’s decision was that the matters in issue were never properly heard and only now are being considered in the limited context of Solicitors’ Disciplinary Tribunal decisions which do not directly result in compensation to the large number of potential Claimant Miners.  
195.	Sir Michael was rightly concerned about the number of potential claimants and the size of the claims but the fact remains that the only way in which redress could properly be obtained, if the claims were justified, was by means of a group litigation order.  GWM considered that the numbers would swell enormously if the GLO was made.  Whether that was a correct view is hard to decide but it was a not unreasonable view to take.  It was a matter for the judge to decide whether or not to delay the granting of a GLO to see what numbers of claimants might emerge but there does seem to have been every likelihood of an increase if the GLO had been made, though how great that increase would be is a matter for speculation.  The effect of Sir Michael’s orders in December was to increase the costs of the GLO application on all sides, where costs were plainly a factor of some importance in the context of the size of claims being pursued by any individual.  Group litigation presents problems of its own and the way in which any judge handles such matters pre and post the making of a GLO is a matter of discretionary case management, as is the decision on the GLO application itself.  An appeal against any order of Sir Michael would have faced difficulties but whether such an appeal would have succeeded is not the point when judging whether or not GWM and Counsel were negligent in pursuing the application.  The fundamental question as to how the Claimant Miners were to obtain redress without a GLO remains unanswered.  Whatever the difficulties, GWM and Counsel took the justifiable view that the only way of pursuing this matter was by GLO and the decisions taken in the course of the application by GWM and Counsel cannot be seen as breaching their duty of care to their clients.  The difficulties with the insurance policy are attributable to Templeton, albeit that Mr Edwards should not have sworn a statement in the form that he did without a policy document in hand, although at that stage he had no reason to believe that there was any difficulty with Templeton which would prevent a policy being issued.  Any early failures on GWM’s part to observe protocols were remedied by Mr Campbell’s advice and assistance. 
196.	Mr Edwards of GWM was entitled to rely on Counsel as he did and, apart from not informing Counsel of the difficulties with the insurance position until very late, is not open to criticism for his conduct after the initial stages when he allowed his enthusiasm for a GLO to result in inadequate letters being sent to GLO Respondents.  He was disappointed with the numbers obtained by the time of the April hearing but both he and Counsel took the view that there were sufficient numbers to justify a GLO particularly given his view and that of Mr Mann that many more claimants would emerge from the woodwork once the GLO had been granted.  The joinder of Raleys but not NUM in the action, whilst the subject of earlier discussion was endorsed by Counsel and at all stages after the involvement of Mr Campbell and Mr Andrew Prynne QC, GWM followed their advice in all material respects.  
197.	Equally I can find no basis for criticism of Counsel in their advice or handling of this GLO application.  Whilst it was suggested in cross-examination that the position could and should have been reviewed at the December hearing, relying upon Sir Michael Turner’s remarks in his judgment that the application could be seen to be doomed to fail at that point, the evidence of Mr Edwards, Mr Campbell and Mr Andrew Prynne QC was that no such impression was given at that hearing and the directions which were made suggested the contrary.  In reality, as both of the two Counsel said in evidence, there was no option but to continue if there was to be any prospect of the Claimant Miners making a recovery.  An abandonment of any claim against solicitors or of any claim at that point would have resulted in a costs sanction which would have eaten into the £1 million cover and presented a real problem in resurrecting any subsequent claim against such parties should it subsequently prove necessary or desirable.  Counsels’ view that test cases could and should be found in the context of a GLO was a sensible view to take.
198.	At the hearing on 3 April 2006 Mr Andrew Prynne QC accepted that the claims against the solicitors were academic if the UDM/Vendside agreement or NUM agreements were found to be enforceable.  On reflection, he thought he should not have made that concession and both he and Mr Campbell had  had further thoughts since the hearing as to how the claims against solicitors could be progressed in such circumstances, though those matters were not pleaded.  Both Counsel now considered that it would have been possible to pursue the claims against solicitors on the basis of the underlying antecedent unlawful arrangements which they had made with the unions/Vendside.  But for such arrangements, the subsequent individual agreements might never have been concluded, even if in reality they turned out to be enforceable as between UDM/Vendside and the individual miner.  Moreover, disclosure of the arrangements would have strengthened the Applicants’ position as can be seen from the Solicitors’ Disciplinary Tribunal decisions and enabled further causes of action to be pleaded.
199.	Had this point been made at the time, it would have fortified the GLO application but, given the terms of Sir Michael’s judgment, would not have carried the day and at no point was it ever suggested to either Counsel that the concession was negligently made.  
200.	It is significant that notwithstanding the position in which Mr Edwards now finds himself – unable to practise as a solicitor – and his reliance upon Counsel, he, in his evidence, went out of his way to say that he had no criticism of the way in which they had carried out their job, save in two minor immaterial respects.  GWM never joined Counsel in the action, despite the assignment of any cause of action that the GLO Applicants had against them.
201.	In my judgment neither GWM nor Counsel were negligent.
Conclusions
202.	In circumstances where I have found that there was no negligence on the part of GWM or counsel, there is no factual basis upon which any claim by Templeton could run against them, regardless of the existence of any duty owed directly to Templeton, which I have also rejected. Nor could they be liable to Beardall or Cooke. (Neither Beardall nor Cooke could have any claim against Counsel in any event, as they had assigned all rights against them to GWM who did not make any allegations against them). 
203.	Equally, neither GWM nor Counsel were responsible in law for the liabilities of the Miners to adverse costs orders or to pay own disbursements so that no claim against them could run under the Civil Liability (Contribution) Act, even if it had been theoretically possible to seek such a contribution. 
204.	As between Templeton and GWM (and its E&O insurers QBE) for the reasons given above, I can see no basis upon which Templeton could make recovery from GWM of the sums paid out to Cooke and Beardall in respect of Own Disbursements.   Templeton are however liable to GWM in the sum of £1 million, less the principal figure paid out in respect of Own Disbursements for two reasons. 
i)	First because GWM discharged Templeton’s primarily liability to the GLO Applicants under the ATE policy; 
ii)	Secondly, because the primary responsibility for the GLO Applicants’ loss was that of Templeton and it is just and equitable that Templeton should pay the whole of the liability for adverse costs and Own Disbursements, up to the policy limit.  
iii)	Interest will run on the sums due.
205.	 The overall effect of this is that Templeton’s overall liability equates to the ATE policy limit together with interest to run thereon to compensate GWM/ QBE which discharged its liabilities and has been kept out of money which is due. Beyond that, QBE as GWM’s E&O insurers will have to bear the costs of the failed GLO Application and its consequences, subject to the point which arises in the next paragraph of this judgment.  
206.	For the reasons which appear in an addendum to this judgment I do not feel able to decide the issues which arise in relation to counsels’ fees.  CMS, on recovery of the sum of £152,127.86 from Templeton under the arbitration award in respect of Own Disbursements, apparently paid that sum to the E&O insurers, QBE, on their instructions.  I do not feel able to make any determination of the position without giving CMS and the Administrator of GWM the opportunity to be heard on this point and giving QBE the opportunity to consider the tentative conclusions which I have reached, as expressed in the addendum.  The other parties may also wish to consider these conclusions and make any further submissions required in the light of them.  I suggest that these matters be dealt with at a hearing either before or immediately following the handing down of this judgment, which is currently scheduled for Tuesday 26 October.
207.	Subject to this point, the parties should be able to agree the orders which flow from the judgment, in relation to principal sums, interest and costs but if they cannot I will, of course, determine any issues which arise.
208.	So far as costs are concerned, subject to any special circumstances of which I am not aware, it appears to me that costs must follow the event and that Templeton are liable to each of the other parties for their costs subject only to a question of a small discount in relation to GWM’s failed claim on the implied term.

Addendum 1
Counsels’ Claim for Fees
209.	As at the date of Sir Michael Turner’s judgment, 18 May 2006, some fees had been paid by GWM to Mr Campbell but not to other Counsel.  Mr Andrew Prynne QC made an application to Sir Michael Turner for leave to appeal based upon grounds that were set out in summary form in writing but permission to appeal was denied.  Thereafter Counsel were not prepared to do further work until some payment had been made.
210.	In June/July 2006 there was agreement to payment by instalments but only one instalment was paid.  In addition to sums owing to Mr Andrew Prynne QC and Mr Campbell, there were further sums owing to three more junior barristers who had worked on the schedules for the Generic Particulars of Claim.  Whereas Mr Andrew Prynne QC had been told that he was to be paid on a normal basis with the rendering of monthly fee notes which were in fact sent, significant sums of money were due.  
211.	In October 2006 solicitors were instructed to bring proceedings against GWM in respect of the unpaid fees and a default judgment was obtained in March 2007 but agreement was reached not to enforce it upon the basis of a repayment plan concluded with GWM.  A cheque was received in April which was apportioned amongst the five barristers but no further instalments were paid.  Mr Edwards was repeatedly asking for more time to pay as he expected the firm to receive a large amount in respect of other litigation but the firm was officially closed on 30 September 2007.  It is now apparently in liquidation. GWM owes Mr Campbell the sum of £24,027.09 and Mr Andrew Prynne QC the sum of £41,734.95 plus interest both before and after judgment.  
212.	It will be recalled that, by virtue of one of Mr Colin Edelmann QC’s arbitration awards, Templeton paid a sum slightly in excess of £175,000 (including interest) to CMS in respect of its liability to indemnify two Claimant Miners, Cooke and Beardall, in respect of their liability for Own Disbursements.  The arbitrator found that under the terms of the arrangement between Beardall and Cooke on the one hand and GWM on the other, the former were liable to the latter for Counsels’ fees under the terms of the CFAs.  It does not appear that Templeton argued in the arbitration that there was no liability at all by virtue of the GWM Guarantee.  
213.	By virtue of the GWM Guarantee, it was a term of GWM’s retainer that the miners would never have to pay anything – “no fee, no risk, no cost”, that disbursements would be paid by the insurers and that adverse costs would also be paid by those insurers.  There nonetheless remained a notional liability on Beardall and Cooke to GWM under the CFAs, subject to the counterclaim under the guarantee.  Although there would be a defence to such a liability there was still a liability which justified the need for indemnity in the arbitration with Templeton.  
214.	The effect of the GWM guarantee and liability thereunder to Beardall and Cooke was that QBE were obliged to indemnify GWM against loss and damage suffered by them equating to that liability to Beardall and Cooke and other Claimant Miners in respect of their liability for disbursements, but QBE did not need to do so, because of the payment by Templeton under the Award.
215.	QBE were also liable to indemnify GWM and did so in respect of its liability to indemnify the GLO Applicant Claimant Miners in respect of Adverse Costs orders.  In doing so QBE was subrogated to GWM’s right, if any, against any other party.  Hence any GWM recovery in relation to Adverse Costs whether by operation of law or under the 1978 Act, will inure to QBE’s benefit.
216.	QBE did not indemnify GWM against its liability to Counsel for disbursements and since this was a trading debt of GWM, that would not have been covered under the policy in any event.  QBE is therefore not subrogated to any rights of GWM in respect of disbursements.    
217.	Issues arise however in relation to the conclusion by GWM of 3 settlement agreements with Claimant Miners.  
i)	On 22 September 2006, GWM entered into a settlement agreement with Cooke which was conditional upon reaching a subsequent settlement with the GLO Respondents.  Under the terms of that agreement, GWM undertook to hold Cooke harmless against any liability for the costs order of Sir Michael Turner of 18 May 2006 and any further costs orders in those proceedings.  GWM also agreed to pay £1,000 to Cooke for the distress and inconvenience caused to him by their conduct of the proceedings.  In consideration of this Cooke agreed to assign all his rights under the insurance policy with Templeton in the form of the assignment set out in Annex 1 to the agreement.  He further agreed to assign all rights and benefit in any cause of action which he might have against the barristers who had acted in the proceedings in the form set out in Annex 2.  This agreement was expressed to be “in full and final settlement of any cause of action or claim whether for negligence, breach of contract or other breach of duty arising out of the solicitors’ conduct of the proceedings.  By the assignment set out in Annex 1, it was agreed that in consideration of GWM agreeing to discharge the liability of Cooke under the costs orders (i.e. adverse costs) Cooke assigned all his rights under the policy and agreed to GWM pursuing in its name such proceedings as it considered necessary to recover sums due under the policy from Templeton.
ii)	GWM concluded a settlement agreement with 40 Claimant Miners represented by Mishcon de Reya on 2 November 2006.  This was not conditional upon settlement with the GLO Respondents since such settlements had been concluded on 26 September and 10 October of that year.  Under the terms of this settlement agreement with the 40 Claimant Miners, GWM undertook to hold them harmless against liability for further costs orders in the proceedings and agreed to pay £40,000 in respect of their costs of instructing Mishcon de Reya as well as the £1,000 per claimant for distress and inconvenience.  In return the miners agreed assignments in the forms of Annex 1 and Annex 2, which were in all material respects identical to those in the Cooke agreement.  Once again the agreement was expressed to be in full and final settlement and used the same form of words as appeared in the Cooke settlement.
iii)	A further settlement was reached on 2 November 2006 with Beardall which was in all material respects identical to that reached with the 40 Mishcon de Reya Claimant Miners.
218.	What appears from these 3 settlement agreements is that GWM did not undertake any obligation in respect of disbursements or counsels’ fees.  They neither agreed to pay them nor undertook to hold the GLO Applicant Claimant Miners harmless against them.  What is noticeable about the claims made by these GLO Applicants against GWM is that they were made in respect of adverse costs orders.  Mishcon de Reya who acted for 40 Claimant Miners, 29 of whom were on the end of charging orders obtained by the UDM and Vendside in an attempt to enforce the adverse costs order, wrote 2 letters of 6 July and 11 July 2006 making claims in respect of the adverse costs orders.  A formal protocol letter before action of 11 July 2006 referred to bringing a claim against GWM for professional negligence, misrepresentation and breach of contract.  In that letter reference was made to the promise made by GWM to its clients in the GWM Guarantee in relation to adverse costs.  Reliance was placed upon the words which appear at the top and upon the terms of paragraph 3.b(iv).  The letter relied upon misrepresentation in the GWM Guarantee and breach of the contract of retainer between GWM and its clients in the shape of the GWM Guarantee.  No reference at any time was made to the question of counsels’ disbursements and, needless to say, GWM never sought to obtain monies from their clients in respect of its own liabilities to counsel.
219.	In my judgment, since GWM did not undertake any obligation to the miners in respect of counsels’ fees, whether to pay them or to hold the Claimant Miners harmless against any obligation to pay them and no claimant miner ever suggested that GWM had a liability to the miners in respect of counsels’ fees, QBE never settled any liability of GWM in respect of them.  The position never arose because GWM never made a claim against its clients for such monies and the clients never responded with a counterclaim stating that there was no liability on them because of the terms of the GWM Guarantee or because of any breach of contract, negligence or duty on GWM’s part.  If no liability of GWM was settled in respect of counsels’ fees, there can be no question of QBE, ever being subrogated to any rights in respect of those fees.
220.	Nonetheless there was an express assignment by the Claimant Miners of their right to sue Templeton under the policy in respect of their liability to pay GWM counsels’ fees.
221.	When CMS instituted arbitration in the name of GWM against Templeton, it was met with the argument that the assignments were invalid because of the policy terms so that GWM could not proceed against Templeton under the arbitration clause in the policy.  In consequence CMS then utilised the names of Beardall and Cooke in the arbitration to proceed against Templeton and were able to recover the principal sum of Counsels’ fees (with interest) from Templeton in the name of these two Claimant Miners.  It will be recalled that QBE was unable to recover in respect of adverse costs because the arbitrator held that sums paid under the settlement agreement were paid in diminution of the loss suffered by Beardall and Cooke and in fact extinguished their liability for adverse costs.
222.	CMS therefore recovered Own Disbursements in the shape of Counsels’ fees in the names of Beardall and Cooke and although the assignment was ineffective for the purpose of the ATE policy, it was effective as between Beardall, Cooke and GWM so that GWM were equitable assignees entitled to the proceeds of the arbitration, as between themselves, Beardall and Cooke.
223.	When Templeton then paid sums out under the arbitration award with interest to CMS, the solicitors received the money in their capacity as solicitors for GWM (and nominally Beardall and Cooke).  When, as solicitors they were acting on the instructions of QBE, they owed duties to both QBE and GWM in accordance with the well known principles set out in Groom v Crocker [1939] 1 KB 194.  In fact, they must be taken to have been acting both for QBE and GWM as joint clients, since otherwise they were not authorised to make the claim in the arbitration in the name of Beardall and Cooke for Own Disbursements.
224.	In these circumstances the money, once recovered from Templeton by way of Own Disbursements, was money held by the solicitors to the order of GWM.  It appears that in fact it was paid, under advice, to QBE.
225.	If the solicitors had paid the money to GWM instead of QBE, the money would have been paid to the Administrators of GWM who are now its liquidators and are apparently willing to pay over the outstanding sums to Counsel, if received.  Had the money been paid to GWM in the ordinary course of its business by its clients, the money would have gone into client account and, in accordance with settled principle, as set out in Cordery on Solicitors at paragraph 1516, it would have been received with the irrevocable authority to use it to discharge any liability for counsels’ fees.  Similarly, it seems to me that, any recovery made from insurers under an assignment from clients must be received on the same basis.  The client would not be able to call for the money because his irrevocable authority had been given for its use for payment to counsel.
226.	That does not however per se mean that money received in this way is impressed with a trust.  The money would have been received with a professional obligation on the part of the solicitors to pay Counsel and with no obligation to return the money to the clients, by virtue of their assignment of policy right to GWM as well as any irrevocable authority.  Whilst the money was received, notionally, by the insured, the GLO Applicant Claimant Miners, in order to pay GWM and GWM owed money to Counsel in respect of their fees, I cannot see that, without more, Counsel could be said to have any proprietary interest in the money itself.  GWM in ordinary circumstances would have a professional obligation to pay Counsel as well as a contractual one.  
227.	The effect of the decisions of the Court of Appeal in Re Harrington Motor Co Ltd [1928] 1 Ch 105 and Re Hood’s Trustees [1928] 1 Ch 793 is that, where an insured under a liability policy becomes bankrupt or goes into liquidation, sums payable under a liability policy in respect of the insured’s liability to a third party are payable to the insured and not to the third party.  The third party has no proprietary claim and no privity of contract with the liability insurer and can make no direct claim for the monies as a matter of common law.  It was the purpose of the Third Parties (Rights against Insurers) Act 1930 to remedy this situation by providing for a statutory right on the part of the injured party to claim directly against the insurer in the circumstances specified in the Act.  In the present case however the insured is a solicitor governed by particular professional obligations and solicitor account rules, although it was in administration and is now in liquidation.
228.	In the current situation however, not only is GWM in liquidation but Counsel have obtained a judgment against GWM and their rights to payment have merged in the judgment.  What they are left with is the right to enforce the judgment against any assets of GWM which, being in liquidation, is presumably paying only a certain percentage in the pound.
229.	In my judgment the money which has been received by QBE ought rightfully to have been received by the Administrator of GWM but there is an unaddressed issue as to how that money should be dealt with once in the hands QBE or of the Administrator.  I am not prepared to make any orders in relation to this without giving the Administrator of GWM and CMS an opportunity to be heard, should they so wish and QBE, should there be any disagreement between QBE and CMS.  If I am right however in the conclusions that I have provisionally formed, the money which was paid to QBE by way of Own Disbursements ought all to have been paid to GWM and it is a matter for the Administrator and the application of principles of law relating to solicitors in administration/ liquidation to these facts which would then determine whether or not the outstanding fees owed to Counsel fell to be paid directly to them or whether all the sums received became available to GWM’s creditors as part of its general assets.
230.	It may be that agreement can be reached between the parties on this aspect or that submissions can be made in writing or that a further hearing will be required.  I invite the parties to let me know before I hand down the balance of this judgment what the position is, so that some resolution can be achieved.