Rare Authority On CPR 19.3: Representative Claim By And On Behalf Of Insurance Companies Is Properly Constituted (Royal & Sun Alliance Insurance Plc And Others v Textainer Group Holdings Ltd And Others)

• Published date: 01 September 2021
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy, Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Gatehouse Chambers
• Author: Mr Phillip Patterson

Royal & Sun Alliance Insurance plc and others v Textainer Group Holdings and others [2021] EWHC 2102 (Comm): Phillip Patterson takes a look at this case in which permission was granted to the insurer, Royal & Sun Alliance (RSA) to bring a representative claim on behalf of a number of other insurers exercising subrogated rights to recoveries from a shipping container leasing company. The claim was properly constituted despite the failure to join an insurer with a common interest in the claim.

What are the practical implications of this case?

This is a fairly rare authority in relation to CPR 19.3. That provision states that:

'where a claimant claims a remedy to which some other person is jointly entitled with him, all persons jointly entitled to the remedy must be parties unless the court orders otherwise.'

This decision has interpreted this provision narrowly as confined to entities who have a joint legal entitlement to a remedy. It does not extend to circumstances in which two or more persons are severally entitled to a remedy and, consequently, have a common interest in the outcome of proceedings. In this latter scenario, the existing claimants have an entitlement to represent the nonparticipant under CPR 19.6 but are not bound to do so. Where they elect not to do so, it is not open to the defendants to argue that the claim is improperly constituted by virtue of CPR 19.3.

What was the background?

The first defendant, (Textainer) and its subsidiaries (the second to eleventh defendants) are in the business of leasing intermodal containers. They entered into a range of insurance policies which represented an excess of loss insurance programme. That programme provided the defendants with indemnities against specified types of loss relating to marine containers. As a whole, it constituted the Primary Policy, issued by seven insurers led by RSA, subject to a sum insured of:

• US$5m in excess of the Assured's Retention
• a First Excess Policy, issued by RSA and XL, subject to a sum insured of US$5m in excess of the limits of the Primary Policy
• a Second Excess Policy, issued by RSA and TT Club, subject to a sum insured of US$5m in excess of the limits of the First Excess Policy
• a Third Excess Policy, issued by IGI and HDI, subject to a sum insure of US$25m in excess of the limits of the Second Excess Policy a Fourth Excess Policy, issued by XL, subject to a sum insured of US$10m in excess of the limits of the Third Excess Policy, and
• a Fifth Excess Policy, issued...