The High Court has ordered Fiona McAleenan to pay AIG (Europe) Limited 20% of the costs of proceedings in which her claim against the insurer was dismissed.
In a costs judgment delivered on 16 July 2010, Ms Justice Finlay Geoghegan said the defendant had a prima facie entitlement to costs as the successful party. But she found that three issues pursued by AIG in its defence had significantly increased the evidence, legal submissions, complexity and length of the hearing, and that Ms McAleenan had succeeded on those issues.
AIG had argued that Ms McAleenan was a partner of Mr Lynn, that the insurance policy was a joint policy, and that it could avoid the policy against her because of alleged fraudulent non-disclosure by Mr Lynn. The judge said AIG was unsuccessful on all three points.
Ms McAleenan’s counsel argued that those issues took up most of the hearing and sought no order as to costs. AIG disputed that account of the hearing time. Its counsel said the hearing lasted nine days, with about three days spent on submissions and six on evidence, much of which would also have been required for the issues AIG won.
The judge said the costs decision had to account for the contribution of the issues on which Ms McAleenan succeeded, while also recognising AIG’s success in defending the claim. She noted that some evidence related to more than one issue and that she had not reached a conclusion on residual issues, including alleged non-disclosure of potential claims arising from multiple undertakings.
Rather than make separate costs orders issue by issue, the judge assessed that the issues on which Ms McAleenan succeeded had probably contributed 40% to the overall complexity and length of the proceedings, and therefore to their costs. She directed that AIG could recover 60% of its costs, with Ms McAleenan entitled to an offset of 40%. The resulting single order requires her to pay AIG 20% of the proceedings’ costs, to be taxed if the parties cannot agree the amount.
The costs judgment followed an earlier judgment on 6 May 2010 dismissing Ms McAleenan’s claim. It did not alter that dismissal.