Coshott v Schmierer

In the case of Coshott v Schmierer, the plaintiff sought to recover costs from the defendant following a judgment in the District Court. The defendant, who had been successful in the District Court, had been defended by solicitors acting on behalf of an insurer. After the defendant’s company was wound up, the solicitors filed a bill of costs for assessment. The plaintiff obtained a copy of the insurance policy and discovered that the successful defendant was not insured under the policy. The basis for the insurer taking over the conduct of the proceedings could only be pursuant to the insurance contract, and since the defendant company itself had incurred no costs, an indemnity of costs order was not required. The insurer was considered a volunteer.

The court was required to decide whether the insurer, having taken over the defence of the defendant, was entitled to recover costs from the plaintiff. The central issue was whether the insurer, having not insured the defendant, could claim the costs as a volunteer. The court held that the insurer, by defending the proceedings without an insurance contract in place, was acting as a volunteer. Consequently, the insurer could not claim costs from the plaintiff.

The court reasoned that the insurer's basis for taking over the conduct of the proceedings was through an insurance contract which did not cover the defendant. Since the defendant company had not incurred any costs, an indemnity of costs order was unnecessary. The court concluded that the insurer, having acted as a volunteer, was not entitled to recover costs from the plaintiff. Therefore, the assessment of the solicitors' bill of costs was stayed.

The court ordered that the assessment of the solicitors' bill of costs be stayed. The insurer, having acted as a volunteer without an insurance contract covering the defendant, was not entitled to recover costs from the plaintiff. This decision highlighted the importance of the insurer's contractual obligations and the consequences of acting without proper coverage.