Case No: HQ12X01829 
Neutral Citation Number: [2016] EWHC 1786 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 19 July 2016 

Before:

THE HONOURABLE MR. JUSTICE PICKEN

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Between:

	CAPE DISTRIBUTION LIMITED 
	
Claimant
	
	- and –
		
	CAPE INTERMEDIATE HOLDINGS PLC	

Defendant
	
and between:

	CAPE INTERMEDIATE HOLDINGS PLC
	
Part 20 Claimant
	
	- and –
		
	AVIVA PLC	

Part 20 Defendant

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Michael Kent QC and Jason Evans-Tovey (instructed by Berrymans Lace Mawer LLP) for the Claimant/Part 20 Defendant
Leigh-Ann Mulcahy QC, Ben Lynch and Martin Ouwehand (instructed by Nabarro LLP) for the Defendant/Part 20 Claimant

Hearing dates: 27, 28, 29 and 30 June 2016

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Judgment
THE HON. MR. JUSTICE PICKEN: 
Introduction
1.	This judgment follows my earlier judgment dealing with certain preliminary issues which I handed down on 17 May 2016 and whose neutral citation number is [2016] EWHC 1119 (QB) (the ‘Preliminary Issues Judgment’). In that judgment, which appears on the BAILII website, I set out at [1] to [4], in summary terms, the relevant background and then, at [17] to [38] I went on to set out the facts which had been agreed for the purposes of the Preliminary Issues trial. In the circumstances, I do not repeat these matters in this judgment. In addition, I adopt the same descriptions and abbreviations in this judgment as I did in the Preliminary Issues Judgment.
2.	The matters with which this further judgment is concerned were identified in paragraph 8 of the order which I made on 31 May 2016, when dealing with certain consequential matters in the wake of the Preliminary Issues Judgment. They are:
(1)	The meaning and effect of section 7(3)(a) of the Civil Liability (Contribution) Act 1978 (the ‘1978 Act’) on CIH’s counterclaims (the ‘1978 Act Issue’).
(2)	Whether the Preliminary Issues Judgment precludes Aviva from pursuing indemnities not only in cases of employees exposed to asbestos after 25 November 1964, which was the date of the Endorsement, but also in cases of ‘straddlers’, namely employees who were exposed to asbestos before 25 November 1964 and also after to some extent as well (the ‘Straddlers Issue’).
(3)	The dates on which the limitation periods start to run for CDL’s claims based on the contractual indemnities and when such claims should be treated as having been made, and so whether any of CDL’s claims are time-barred (the ‘Limitation Issue’).
3.	As will shortly appear, in the event, the 1978 Act Issue was not contentious. The Straddlers Issue and the Limitation Issue, however, remained controversial and were the subject of detailed argument. In addition, a point arose during the latter stages of the hearing which concerns the applicability of CPR 17.2. I address this matter also in this judgment.
4.	I propose to adopt the same approach as I did in relation to the Preliminary Issues Judgment (see [41]), and so to focus on the main points, in circumstances where very many authorities (approaching 70) were cited to me and where I received no fewer than ten sets of written submissions (amounting to just over 200 pages) before, during and after the hearing. If I do not specifically address a particular point, therefore, it does not mean that I have omitted to consider it. 
The 1978 Act Issue
5.	The 1978 Act Issue was raised by Mr Kent QC, on CDL’s and Aviva’s behalf, during the course of the Preliminary Issues trial. It was not, however, a matter which was raised in Mr Kent QC’s and Mr Evans-Tovey’s written submissions leading into that trial. Nor was it a point which was made in CDL’s Defence to CIH’s Counterclaim. Nor was it a matter which was identified as one of the Preliminary Issues. Mr Fenwick QC, on CIH’s behalf, took the position that I should not, therefore, address the issue at that stage. As explained in the Preliminary Issues Judgment at [43], I agreed with Mr Fenwick QC about this. 
6.	The parties subsequently agreed that the matter should be determined by me ahead of the main trial, which is due to take place early next year, along with the other issues identified in the previous paragraph. It is for this reason that on 31 May 2016 I directed that the 1978 Act Issue should be determined along with the Straddlers Issue and the Limitation Issue. As I have indicated, in the event, however, there is agreement between the parties as to the meaning and effect of section 7(3)(a) of the 1978 Act and so as to the 1978 Act Issue. It is agreed, specifically, that, in the light of the Preliminary Issues Judgment coupled with section 7(3)(a), CIH is precluded from claiming a contribution against CDL pursuant to section 1 of the 1978 Act in respect of CIH’s counterclaims which are based on CDL’s own negligence and joint liability in tort to the third party claimants who have claimed against CIH in respect of the “same damage”. I propose, in these circumstances, nonetheless to deal with the 1978 Act Issue not merely for completeness but since it is an issue which I have directed should be determined and so, in my view, it is appropriate that it is properly addressed. 
7.	I set out section 7(3) in the Preliminary Issues Judgment at [42]. For convenience, however, I do so again below:
“The right to recover contribution in accordance with section 1 above supersedes any right, other than an express contractual right, to recover contribution (as distinct from indemnity) otherwise than under this Act in corresponding circumstances,; but nothing in this Act shall affect -
(a)	any express or implied contractual or other right to indemnity; or
(b)	any express contractual provision regulating or excluding contribution;
which would be enforceable apart from this Act (or render enforceable any agreement for indemnity or contribution which would not be enforceable apart from this Act).” 
8.	The issue, in short, is whether, in circumstances where I have decided in the Preliminary Issues Judgment that CDL is entitled to contractual indemnities from CIH under the Sale Agreement, CIH is precluded from bringing its counterclaims against CDL by reason of section 7(3)(a). Specifically, in its Re-Re-Re-Amended Defence to Counterclaim, served after the Preliminary Issues Judgment, CDL contended as follows in paragraph 23:
“In light of the court’s conclusion on the trial of preliminary issues contained in a judgment handed down on 17 May 2016 that the claimant is entitled to an indemnity in respect of the claims which are the subject matter of the claims and counterclaims herein and by virtue of section 7(3)(a) of the 1978 Act the claimant denies that the defendant is entitled to contribution pursuant to section 1 of the 1978 Act alternatively any such counterclaims fail for circuity of action and/or it would not be just and equitable in the light of entitlement to such indemnity for the claimant to be required to make any contribution towards any claims paid in satisfaction of judgments entered or settlements agreed within two years prior to the date of service of the Counterclaim herein or at all where such claims were made by former employees of the claimant or their estates and dependents for damages for asbestos related illness due to asbestos exposure, or for any other any bodily injury or disease, arising out of employees’ employment by the Claimant at the Uxbridge works. The Claimant makes the same qualification to the submission as is made (mutatis mutandis) by the defendant in paragraph 23(d) of its Defence herein.”
9.	The reference in this paragraph to “the court’s conclusion on the trial of the preliminary issues … that the claimant is entitled to an indemnity” is a reference to the answers which I gave in the Preliminary Issues Judgment to Preliminary Issues 3(a) and 3(b), namely:
“In relation to Clause 5 of the Agreement and it being admitted that by Clause 5 CDL and CIH agreed that CDL would account and be entitled to be indemnified against all debts, liabilities and obligations incurred carrying the business until the completion of the sale:
(a)	is CDL entitled to such indemnity in respect of CDL’s own breaches of duty as agent?
(b)	alternatively, is CIH entitled in principle to claim damages from CDL in respect of CDL’s own breaches of duty?”
My answer to Preliminary Issue 3(a) was ‘yes’, whilst my answer to Preliminary Issue 3(b) was ‘no’. The paragraphs in which I dealt with Preliminary Issue 3(a) in the Preliminary Issue Judgment are [87] to [98], whereas I addressed Preliminary Issue 3(b) rather more shortly in a single paragraph ([99]). 
10.	At the Preliminary Issues trial, Mr Kent QC explained that the predecessor to the 1978 Act was the Law Reform (Married Women and Tortfeasors) Act 1935. He referred, in particular, to section 6(1)(c) of that Act which was in the following terms:
“Where damage is suffered by any person as a result of a tort … -
…
(c)	any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought.”
Mr Kent QC submitted that if the 1935 Act were applicable, which it is common ground it is not in the present case (see section 10(2) of the 1978 Act and Lampitt v Poole [1991] 2 QB 545), then, given CDL’s entitlement to a contractual indemnity from CIH under the Sale Agreement, that was, as he put it, “the end of it”. 
11.	In their written submissions for the purposes of the hearing which has resulted in this judgment Mr Kent QC and Mr Evans-Tovey elaborated on this submission. They submitted that, in stipulating that “no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought”, the 1935 Act was expressly dealing with the inter-action between, as they put it, (i) a contractual indemnity in favour of tortfeasor A from tortfeasor B and (ii) the right of tortfeasor B to a statutory contribution from tortfeasor A as well as (iii) the right of tortfeasor A to a statutory contribution from tortfeasor B. More particularly, Mr Kent QC and Mr Evans-Tovey explained, while section 6(1)(c) creates a general right to contribution between tortfeasors liable in respect of the same damage, that same section makes it clear that where an indemnity exists between tortfeasors, the indemnifier’s right to a statutory contribution is excluded, whereas in contrast, although the tortfeasor (tortfeasor A) with an indemnity in its favour would have almost invariably sued on the indemnity, section 6(1)(c) did not abolish the right of that tortfeasor (tortfeasor A) to a statutory contribution from the indemnifier (tortfeasor B).  
12.	It was Mr Kent QC’s and Mr Evans-Tovey’s submission that the position is the same under the 1978 Act by virtue of section 7(3)(a). They suggested, as Mr Kent QC had done at the Preliminary Issues trial, that the position under section 7(3)(a) is essentially the same as it was under section 6(1)(c) of the 1935 Act. They referred in this regard to the fact that the Law Commission’s main recommendation in its Law of Contract Report on Contribution (Law Com. No. 79), which was published in 1977 and which was to result in the enactment of the 1978 Act, was to extend the right of contribution to cases where persons were liable for the “same damage” not only in tort but in other respects also, such as breach of contract, and that there was no intention on the part of the Law Commission otherwise to change the existing law. In particular, clause 3(1) of the draft Bill presented by the Law Commission contained identical wording to that used in section 6(1)(c) as follows:
“no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought”.
Furthermore, I was informed that the explanatory notes to the draft Bill confirm that clause 3(1) was intended merely to reproduce the predecessor provision. In the event, however, but apparently without any accompanying intention to depart from what had been the previous position since there seems to have been no discussion concerning the change, when the 1978 Act came to be drafted, different wording was used in section 7(3). 
13.	In these circumstances, it was Mr Kent QC’s and Mr Evans-Tovey’s submission that since I have decided that CDL is entitled to an indemnity under the Sale Agreement, then, CIH’s counterclaim under the 1978 Act essentially drops away. Specifically, in their written submissions they submitted that section 7(3) does three things: first, it provides that the statutory right to a contribution supersedes all other rights to a contribution, save an express contractual one; secondly, through the express carve-out expressed in the bracketed words “as distinct from indemnity”, it provides that the statutory right to a contribution also does not supersede a contractual right to an indemnity; and thirdly, by its reference to nothing in the 1978 Act affecting “any express or implied contractual … right to indemnity”, it provides that, where there is a contractual indemnity (as opposed to a contractual contribution), any statutory contribution in favour of the beneficiary of the indemnity does not supersede (so as to reduce) the indemnity in favour of the beneficiary directly, or indirectly, for example, by reason of any correlating statutory contribution in favour of the indemnifier being effective by way of a cross-claim or set-off. In essence, as Mr Kent QC put it when making his oral submissions at the Preliminary Issues trial, “if you have a right to indemnity from another party which is an enforceable right then you don’t lose part of it by having a proportion clawed back under the 1978 Act, so that is clearly preserving that position”.
14.	In support of this stance, Mr Kent QC and Mr Evans-Tovey relied on Royal Bank of Scotland v Sandstone Properties Limited [1998] 2 BCLC 429, a case in which it was assumed that the bank and stockbrokers had both acted negligently in relation to certain share certificates and that their separate negligent acts had caused the same damage to the bank. Although the stockbrokers were liable to indemnify the bank under a common law implied indemnity, they sought to reduce the extent of that liability by arguing that they were entitled to a cross-contribution from the bank under the 1978 Act. Tuckey J (as he then was) was clear that they could not do this. He stated as follows at page 434:
“For the purpose of considering Mr Dingemans’ fourth submission I shall assume that the bank and the brokers are liable in respect of the same damage despite Mr Dingemans’ primary submission that the brokers were not liable to Mr Moore at all.
Section 7(3) of the 1978 Act says:
‘Nothing in this Act shall affect ... (a) any ... implied contractual right to indemnity.’
Whilst the principle in the Sheffield case stands, there can be no basis for a claim for contribution because the implied right to indemnity would be affected if the person liable to indemnify could claim contribution from the person entitled to the indemnity. …”.
15.	I agree with Mr Kent QC and Mr Evans-Tovey that this case supports their submission. I am satisfied that the effect of section 7(3)(b) of the 1978 Act and the contractual indemnities which I have decided in the Preliminary Issues Judgment CDL is entitled to invoke under the Sale Agreement is that any cross-claims or set-offs in favour of CIH are precluded because such cross-claims or set-offs would “affect” the indemnity. It seems to me that it must be right, in particular, that if the position were not as submitted by Mr Kent QC and Mr Evans-Tovey, then, the consequence would be that the 1978 Act would reduce all indemnities between entities which are both to blame to mere contributions.
16.	Miss Mulcahy QC, Mr Lynch and Mr Ouwehand did not disagree. As they explained in their written submissions, this is on the basis that CIH is nonetheless seeking permission to appeal in relation to my determination of Preliminary Issues 3(a) and 3(b), and so the position may change depending on the outcome of that permission application and any substantive appeal which may ensue. In these circumstances, it was their position that I should not go further at this stage and make certain consequential orders providing for the dismissal of CIH’s counterclaims in the main action and its third party proceedings brought against CDL in the context of the Product Liability claims. As I indicated at the hearing, I agree that the right course is to defer the making of any consequential orders until the further hearing which is to take place on 26 July 2016, when costs relating to the Preliminary Issues are to be addressed.
The Straddlers Issue
17.	I come on to address the Straddlers Issue. In a nutshell, the issue is whether Aviva is precluded from pursuing a subrogated claim (in CDL’s name) to recover its outlay not only in cases of employees exposed to asbestos from 25 November 1964 (the date of the Endorsement) but also in cases of so-called ‘straddlers’, namely employees who were exposed to asbestos before 25 November 1964 but also after that date to some extent as well.
18.	There are four aspects to this issue, only two of which are controversial. The two matters not in dispute concern lung cancer claims and divisible disease (diffuse pleural thickening) claims. The other aspects are mesothelioma claims and defence costs, as to which there is a very real controversy. Before I come on to deal with the various issues, by way of further explanation and introduction:
(1)	as to mesothelioma claims, the question is whether Aviva is precluded from bringing claims in CDL’s name for mesothelioma in full in ‘straddler’ cases where there is any material exposure on or after 25 November 1964;
(2)	as to divisible disease (diffuse pleural thickening) claims, the question is whether Aviva is precluded from recovering via a subrogated claim in CDL’s name that proportion of damages and claimant’s costs which relates to the period of exposure after 25 November 1964 relative to the total period of insured exposure; 
(3)	as to lung cancer claims, the question is whether Aviva is precluded from recovering via a subrogated claim in CDL’s name damages and claimant’s costs in ‘straddler’ cases for that proportion of lung cancer claims which relates to the period of exposure after 25 November 1964 relative to the total period of insured exposure; and
(4)	as to defence costs, the question is whether Aviva is precluded from recovering via a subrogated claim in CDL’s name defence costs it has paid in relation to any ‘straddler’ cases irrespective of the disease at issue and whether the indemnity to CIH is full or proportionate.
Mesothelioma claims
19.	The mesothelioma claims issue is difficult and was the subject of considerable contention in the submissions which were made before me. 
20.	To be clear, I refer here to the situation where there are claims by CDL employees which cover both the period before 25 November 1964 and the period after that date. It is common ground that where CDL employees were exposed to asbestos only after 25 November 1964, no claim against CIH can be brought by Aviva in CDL’s name, and so exercising its rights of subrogation, because of what I decided in the Preliminary Issues Judgment in relation to Preliminary Issues 10, 14 and 16(c) (and 7), which, in essence, was that CIH became insured (with CDL) under the Policy as a result of the Endorsement, and so with effect from 25 November 1964 (but not before), and that Aviva is unable to bring a subrogated claim in CDL’s name against CIH (a co-insured with CDL). For convenience, I set out Preliminary Issues 10, 14,16(c) and 7 and my answers in what follows:
Preliminary Issue 10: As a matter of construction, did CIH become an insured under the Policy and does the Policy and/or Endorsement extend to provide CIH (as well as CDL) with an indemnity in respect of CIH’s own tortious acts or omissions, or those of its own servants or agents, in relation to employees of CDL or generally in relation to claims by employees of CDL or liabilities on its part to CDL’s employees for injury caused to them by CDL’s operations?
Answer: ‘yes’ by which I mean: ‘(i) that CIH became an insured under the policy by virtue of the Endorsement; and (ii) CIH thereby obtained insurance cover under the Policy in respect of liability to an employee of CDL arising out of that employee’s employment with CDL’.
Preliminary Issue 14: Is CIH entitled to an indemnity from Aviva under the Policy in respect of CIH's own liability to make contribution to CDL and/or in respect of past or future claims directly made against CIH by CDL's employees in relation to:
(a) 	the period after the Endorsement dated 25 November 1964 deeming CIH to be “the Insured” and until 31 December 1966 when the insurance ceased;
(b) 	the period between 31 December 1956 and the date of the Endorsement?
Answer: in relation to paragraph (a), ‘yes’; in relation to paragraph (b), ‘no’.
Preliminary Issue 16(c): Is Aviva entitled to bring a claim in the name of CDL against CIH pursuant to the alleged contractual indemnity or under the Civil Liability (Contribution) Act 1978 in respect of claims which are the subject of indemnity by Aviva to CDL under that Policy … if CIH is a co-insured under the Policy as pleaded in the Part 20 Claim?
Answer: ‘no inasmuch as the claim concerns a period when there was co-insurance’.
Preliminary Issue 7: Does the fact that the claims herein are subrogated claims brought by a liability insurer of CDL which has paid CDL out for its loss prevent reliance in this action on Clauses 2 and/or 5 of the Sale Agreement?
Answer: ‘yes inasmuch as the claim concerns a period when there was co-insurance’. 
21.	Particular reliance was placed by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand on what I had to say in the Preliminary Issues Judgment at [182], when dealing with Preliminary Issues 16(c) and 7, as follows:
“On this issue, I prefer the submissions advanced by Mr Fenwick QC. I agree with him that, in the present case, the interests of CDL and CIH under the policy were coterminous. Put another way, the same damage that was visited upon CDL as a result of employees' claims is now sought to be visited upon CIH through the subrogated claims brought by Aviva in CDL's name. The policy responds to bodily injury suffered during the course of employment. The fact that the relevant employees were employed by CDL rather than by CIH seems to me to be immaterial. What matters is that the employees who were claiming compensation were doing so. Nothing else matters. It is that claim which the Policy covers. The position of CIH is, for relevant purposes, coterminous with that of CDL. Their interests are ‘inseparably connected’. They are ‘pervasive’. Mr Kent QC submitted that the respective interests of CDL and CIH were not the same if and insofar as the liability of CIH was anything other than a vicarious liability. I do not agree. The relevant question is not how the liability arises but what the underlying claim is in the sense of what the individual employee alleges is the bodily injury which has been suffered. This is the thing which matters as far as the Policy is concerned: the insurer (RPA) needs to know what the underlying claim is, and what it is, colloquially speaking, ‘on the hook for’. In my view, this is a clear case where the fact that both CDL and CIH, as I have decided, were the ‘Insured’ as a result of the Endorsement means that there was co-insurance and, as a result, the subrogated claim brought by Aviva in the name of CDL is not maintainable inasmuch as it is concerned with any period when that co-insurance existed.”
The legal context
22.	Before I summarise the parties’ respective arguments, it is necessary to say something about the legal context in which those arguments came to be made since, as will appear, but for the particular position arrived at by the law in relation to mesothelioma claims specifically, there would likely have been agreement as to how ‘straddlers’ should be dealt with in this case to the effect that they should be approached in the same way as divisible disease (diffuse pleural thickening) claims. The reason why there is no such agreement in relation to mesothelioma claims is that in relation to such claims, and only such claims, Parliament has enacted the Compensation Act 2006 (the ‘2006 Act’), thereby changing the position arrived at by the common law in relation to mesothelioma claims but not divisible disease (diffuse pleural thickening) claims.
23.	The context is what was described by Lord Mance in International Energy Group Ltd v Zurich Insurance plc [2015] UKSC 33, [2015] 2 WLR 1471 (the ‘IEGL case’) at [4] as the “special rule” in Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22, [2003] 1 AC 32 which confers a right of suit on victims of mesothelioma by reference to each significant exposure with the attendant risk of developing mesothelioma, rather than any probability that the particular exposure relied on led or contributed to the disease, together with what the House of Lords subsequently decided in Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572 namely that a person responsible for exposure is liable not for the whole damages attributable to the mesothelioma, but only in proportion to his own contribution to the overall exposure, probably measured by the duration and intensity of the particular exposure for which he was responsible. A convenient summary has recently been given by Lord Dyson MR in Heneghan v Manchester Dry Docks [2016] EWCA Civ 86, [2016] 1 WLR 2036. He stated at [10] and [11] as follows:
“10.	In Fairchild, all the claimant employees had been exposed to asbestos dust during periods of employment with more than one employer. They contracted mesothelioma. This is an indivisible disease, i.e. one whose severity does not depend on the extent of the exposure to asbestos. In that sense, it is similar to lung cancer and differs from diseases such as pneumoconiosis and silicosis. But it was accepted that the risk of developing mesothelioma increased in proportion to the quantity of asbestos dust and fibres inhaled: the greater the quantity of dust and fibres inhaled, the greater the risk. There was no way of identifying, even on a balance of probabilities, the source of the fibre or fibres which initiated the genetic process which culminated in the malignant tumour. Lord Bingham referred to this at para 7 as the ‘rock of uncertainty’. 
11.	In order to surmount this difficulty, the House of Lords fashioned a modified approach to proof of causation: proof that a defendant employer had materially contributed to the risk of contracting the disease was sufficient to satisfy the causal requirements for his liability. This approach had been heralded earlier in McGhee v National Coal Board [1973] 1 WLR 1.” 
24.	As for the Barker case, which Miss Mulcahy QC accurately described as entailing something of a quid pro quo for defendants, Lord Dyson MR addressed this in the Heneghan case at [12]:
“In Fairchild, the House of Lords did not address the question of apportionment between defendants. That issue was confronted squarely by the House in Barker v Corus UK Ltd [2006] UKHL 20, [2006] 2 AC 572. In that case, the deceased who died of mesothelioma had been exposed to asbestos during three periods of his working life: while working for a company which had become insolvent; while working for the defendant; and while he was self-employed. It was held that the defendant was liable only in proportion to his own contribution to the exposure to the asbestos and therefore to the risk that the deceased would contract mesothelioma. It was irrelevant whether the other exposure was tortious, non-tortious, by natural causes or caused by the employee himself.”   
In effect, therefore, as a result of the Barker case, defendants only faced a proportionate liability reflecting their particular contribution to the total period of exposure. Subject to intensity or type of exposure and assuming no variations of this sort, the respective contributions would be worked out on a time-exposed basis. 
25.	Very shortly after the Barker case, however, under three months later to be a little more precise, Parliament reversed the quantum rule established in the case insofar as mesothelioma (but no other) claims are concerned. This was in section 3 of the 2006 Act, headed “Mesothelioma: damages”, which provides as follows:
“(1) This section applies where –
(a) 	a person (‘the responsible person’) has negligently or in breach of statutory duty caused or permitted another person (‘the victim’) to be exposed to asbestos,
(b) 	the victim has contracted mesothelioma as a result of exposure to asbestos,
(c) 	because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure mentioned in paragraph (a) or another exposure which caused the victim to become ill, and
(d) 	the responsible person is liable in tort, by virtue of the exposure mentioned in paragraph (a), in connection with damage caused to the victim by the disease (whether by reason of having materially increased a risk or for any other reason).
(2) 	The responsible person shall be liable –
(a) 	in respect of the whole of the damage caused to the victim by the disease (irrespective of whether the victim was also exposed to asbestos –
(i)	other than by the responsible person, whether or not in circumstances in which another person has liability in tort, or
(ii) 	by the responsible person in circumstances in which he has no liability in tort), and
(b) 	jointly and severally with any other responsible person.
(3) 	Subsection (2) does not prevent –
(a)	one responsible person from claiming a contribution from another, or
(b)	a finding of contributory negligence.”
Significantly, therefore, the 2006 Act reversed the Barker rule in relation to mesothelioma claims. As a result, although the rule applies to other types of claim, such as lung cancer claims, it does not apply to mesothelioma claims. Instead, in relation to mesothelioma claims, each defendant which is jointly and severally liable with another defendant is liable for the whole of the damage, not merely a proportion. Every time that there is material exposure, the relevant defendant is liable in full.
26.	The issue in Durham v BAI (Run-off) Ltd [2012] UKSC 14, [2012] 1 WLR 867 (the ‘Trigger case’) was whether certain employers’ liability policies of insurance responded as a matter of construction in circumstances within the rule in Fairchild and Barker. It was in this context that Lord Mance had to consider whether the Fairchild exception entails causation being deemed or a relaxation of the causation requirement. He explained at [71] that if it was the former, then, it was not in dispute that causation was established for the purposes of the insurance policies. The issue was whether, if it was the latter, the necessary causal link had been made out in order for the policies to respond. Lord Mance explained that the Fairchild exception does not involve causation being deemed but a relaxation in the requirements for causation. He said the following at [72]:
“The argument, accepted by Lord Phillips, is that the rule in Fairchild and Barker is not one of deemed causation of or, therefore, liability for the disease, but one of liability for the risk created by the exposure. For reasons which I have set out, I regard this distinction as too simple. The liability arises only because of the incurring of the disease and is for the disease. A condition of such liability is that the employer (negligently) exposed the victim to asbestos. The insurance policies, read as operating on a causation basis, are aimed at covering liability generated by employers’ activities during their insurance periods: …; unless liability for mesothelioma flowing from negligent exposure during an insurance period is covered by the policies, this aspect of employers' activities will not in practice be covered at all.” 
Lord Mance decided that the necessary causal link had been made out in order for the policies to respond. He stated at [73] as follows:   
“In my view, these considerations justify a conclusion that, for the purposes of the insurances, liability for mesothelioma following upon exposure to asbestos created during an insurance period involves a sufficient ‘weak’ or ‘broad’ causal link for the disease to be regarded as ‘caused’ within the insurance period. It would, I think, have been anomalous and unjust if the law by ‘deeming’ there to have been causation of the disease could have created policy liability (which is common ground), but the law by insisting that the liability in respect of mesothelioma was for the risk of causation achieved a quite different result. As I have sought to show, it is not in any event accurate to treat the liability as being either solely or strictly for the risk. The risk is no more than an element or condition necessary to establish liability for the mesothelioma. The reality, reinforced by provisions in the 2006 Act, is that the employer is being held responsible for the mesothelioma.” 
He went on at [74] to say this:
“For this purpose, the law accepts a weak or broad causal link. The link is to exposure which may but cannot be shown on the ordinary balance of probabilities to have played a role in the actual occurrence of the disease. But for the purposes of the policies the negligent exposure of an employee to asbestos can properly be described as having a sufficient causal link or being sufficiently causally connected with subsequently arising mesothelioma for the policies to respond. The concept of a disease being ‘caused’ during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the rule in Fairchild and Barker. Viewing the point slightly more broadly, if (as I have concluded) the fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them, then the liability for mesothelioma imposed by the rule in my opinion fulfils precisely the conditions under which these policies should and do respond.”
27.	Subsequently, in the IEGL case, Lord Mance referred to the Trigger case at [45], saying this:
“In the light of this drastic consequence, the majority of the court in ‘Trigger’ preferred a second response. It equated the concept of causation in an insurance context with the weaker or broader meaning which the courts have, to the benefit of victims, given it in tort. This was a choice rationalised in terms of the principle that a facultative liability insurance normally responds to whatever may prove to be the liability incurred by the insured. In ‘Trigger’ there was no consideration of a situation in which a relevant insurance covered only part of an overall period during which the insured employer had exposed the victim to asbestos dust. But in my view the reasoning in ‘Trigger’ binds this court to hold that the mesothelioma is caused - in the sense that it results from exposure which existed - in each and every period of any overall period of exposure. The fact that a victim or an insured only relies on one period of exposure does not alter the legal position, that it can equally be said to have been caused in every other period of exposure. This is because, as a matter of law, exposure connotes causation, in both tort and tort liability insurance law. It is the anomalies resulting from that conclusion which the court must now resolve, accepting but building on its own prior jurisprudence.”
He went on at [47] to say this, referring to a (minority) view expressed by Lord Sumption:
“More specifically, Lord Sumption JSC suggests that the insurer ‘must still show that the occurrence fell within the chronological limits of the policy’: para 156. But that raises the question: what is here meant by the occurrence for which the employer is liable? It cannot be the disease itself, which can and does occur decades later. If it is the incident which causes the disease, then, as Lord Sumption JSC himself recognises (para 157), it is each and every, or any, negligent exposure to asbestos involving a contribution by the employer to the risk of the victim sustaining mesothelioma that constitutes causation for the purposes of a liability insurance like the present. Any such exposure can be relied on as causing the mesothelioma and making the employer fully liable for the victim’s loss, and any such exposure occurring during any policy period will on a like basis mean that the insurer incurs full liability.”
28.	The IEGL case involved a Guernsey company, Guernsey Gas Light Co. Ltd (‘GGLCL’), which employed a Mr Carré in Guernsey from 1961 to 1988, throughout that employment exposing him to asbestos dust; International Energy Group Ltd (‘IEGL’) was the successor in title to GGLCL. In relation to six of the 27 years of Mr Carré’s employment, policies of employer’s liability insurance were taken out with Midland Assurance Ltd (‘Midland’), under which cover was provided in respect of an employee’s injury or disease “caused during any period of insurance and arising out of … his employment”. Zurich Insurance plc (‘Zurich’) succeeded to Midland’s insurance liabilities. Mr Carré contracted mesothelioma and brought proceedings in Guernsey for damages against IEGL. IEGL settled Mr Carré’s claim by a compensation payment and brought proceedings in England against Zurich, seeking an indemnity for the compensation which it had paid and the costs of defending Mr Carré’s action. At [7] Lord Mance stated as follows:
“In Durham v BAI (Run-Off) Ltd [2012] 1 WLR 867 (the ‘Trigger’ litigation), the Supreme Court held that, where an employer is insured against liability for a disease suffered by an employee which has been caused during the insurance period, the necessary causal requirement or link is satisfied in the case of mesothelioma by the employer's negligent exposure of the victim during such period to asbestos (and so to the risk of suffering mesothelioma), with the result that the insurer must indemnify the employer against the liability so incurred.”
He went on at [8] to say this:
“Guernsey has not passed any equivalent of the United Kingdom's Compensation Act 2006. The first main question on this appeal is whether, apart from that Act, the proportionate recovery rule in Barker [2006] 2 AC 572 still exists at common law. Guernsey common law is, as stated, to be taken to be the same as English common law. IEG's case is that Barker has ‘become past history’ after the 2006 Act and in the light of the Supreme Court’s decision in the ‘Trigger’ litigation.”
Lord Mance then addressed the insurance position, describing at [9] the “second main question” as concerning the position “where the person responsible for exposing a mesothelioma victim has the benefit of liability insurance covering only part of the period for which he exposed the victim”. He asked whether “If in such a case the person responsible incurs an expense or liability which is not proportionate, must an insurer who has covered only part of the whole exposure period bear the whole expense or liability?”. It was, in fact, accepted by all sides (including by the interveners, the Association of British Insurers) that such an insurer must, at least in the first instance, answer for the whole expense or liability. It was, therefore, accepted by Zurich that if Mr Carré was, as a result of being exposed to asbestos dust during the six years for which Midland insured GGLCL, entitled to the full compensation payment of £250,000 plus costs which he received from IEGL, then, the policy wording required Zurich to answer in full notwithstanding that he was also exposed to asbestos dust during a further 21 years. As Lord Mance observed, Lord Sumption was doubtful whether this was an acceptance which was correct. However, assuming that it was correct, the further question which arose was “whether such an insurer is in any way entitled to recoup himself proportionately, and if so from whom, when during the remaining period of exposure the employer chose either to insure with other insurers or not to insure at all or no identifiable insurer can now be shown to have covered the employer”. He went on:
“If Barker no longer represents the common law, this question arises directly on this appeal. Zurich submits that it anyway also arises in respect of defence costs incurred by or on behalf of a person responsible for a particular exposure, where the overall exposure is greater. Most obviously, it is a question of general importance in the United Kingdom in relation to claims under the 2006 Act, though the present appeal concerns no such claim.”
I shall come on in what follows to consider what Lord Mance went on to decide in relation to these aspects.
The parties’ positions
29.	CIH’s position in relation to claims which straddle 25 November 1964 is that, in view of my conclusions in relation to Preliminary Issues 10, 14 and 16(c) (and 7) and in the light of the observations which I made at [182] in particular, the position is clear: on the basis of the law as it now is, specifically because of the decision of the House of Lords in the Fairchild case and because of the change in the law brought about by the 2006 Act, together with the consequential impact of these matters at the insurance level, CIH is entitled to look to Aviva as regards ‘straddler’ mesothelioma claims for a 100% indemnity under the Policy, irrespective of the fact that CIH was not insured with Aviva (strictly RPA) prior to the Endorsement being entered into and irrespective of the fact that I have rejected CIH’s contention that the Endorsement had retrospective effect (Preliminary Issue 13). Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted that this ability to claim under the Policy reflects the fact that CIH is under a potential liability to CDL’s employees in the event that such employees were to claim directly against CIH, and furthermore not just liable to the extent that CIH materially increased the risk but liable “in respect of the whole of the damage” caused to the employee concerned. About this there is no doubt for reasons which I shall come on to explain. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand, however, went on to submit that the fact that there is such coverage means that there is similarly coverage in relation to any liability which CIH is under to CDL by reason of Clauses 2 and 5 of the Sale Agreement (I shall refer in this judgment simply to Clauses 2 and 5 without on every occasion stating that these are provisions in the Sale Agreement), provided that this is not the only means by which CIH is liable and so that the relevant exclusion in the Policy in respect of contractual liability is not operational (which they submitted it is not). Either way, so it was submitted, since CIH is a co-insured under the Policy, CIH is entitled to recover, including, therefore, in respect of the claim which is now pursued against CIH by Aviva as CDL’s subrogated insurer. The result is that Aviva is precluded from pursuing that claim in CDL’s name in accordance with what I decided in relation to Preliminary Issues 16(c) and 7. 
30.	Miss Mulcahy QC, Mr Lynch and Mr Ouwehand additionally submitted that since CDL is entitled to make a full recovery from CIH under Clauses 2 and 5 in respect of the period after 25 November 1964, it is not open to CDL (in reality, Aviva as CDL’s subrogated insurer) to look to CIH under Clauses 2 and 5 in respect of the period before 25 November 1964. This would, Miss Mulcahy QC suggested during the course of her oral submissions, entail CDL effectively seeking to recover twice: a full indemnity in respect of the period after 25 November 1964 and representing its 100% liability to its employees as a result of the Fairchild case and the 2006 Act; and another full indemnity in respect of the period before 25 November 1964 and again representing its 100% liability to its employees as a result of the Fairchild case and the 2006 Act. The inappropriateness of this being permitted, it was submitted, is underlined by the fact that, in relation to the period after 25 November 1964, CIH has the benefit of insurance cover with Aviva which would mean that, in reality, the liability in respect of that period would be met by Aviva, yet it is Aviva which, having indemnified CDL in relation to the period before 25 November 1964, is the party which is alone interested in advancing the present claim against CIH.  
31.	Mr Kent QC and Mr Evans-Tovey submitted that these submissions subvert the conclusion which I arrived at in relation to Preliminary Issue 13, which, as I have already stated, was that the Endorsement entered into on 25 November 1964 was not retrospective in effect. Their submission was that, if CIH’s submissions were accepted, then, CIH will effectively have achieved success in relation to a matter on which CIH has previously lost. This, furthermore, it was suggested, would be despite my having explained in the Preliminary Issues Judgment at [182] that it is not enough that the proposed defendant merely happens to be an insured for something under the same policy of insurance as the insurance must be in respect of the same “pervasive interest”. Mr Kent QC and Mr Evans-Tovey suggested that CIH’s submissions ignore the fact that CIH only became an insured under the Policy as a result of the Endorsement and so was not a co-insured as regards prior periods when there was tortious exposure of its employees by CDL. Accordingly, they suggested, CDL and CIH cannot be viewed as co-insureds in respect of the pre-Endorsement period. Furthermore, in the present case, although Mr Kent QC and Mr Evans-Tovey accepted that the Policy should be taken as having covered liability brought about by the 2006 Act, so as to mean that CIH could look to Aviva for an indemnity in respect of any direct liability on CIH’s part to a CDL employee or any liability to CDL under the 1978 Act in respect of post-25 November 1964 exposure, they contended that the Policy did not cover anything other than these types of direct liability. In these respects, Mr Kent QC and Mr Evans-Tovey characterised CIH’s case as leading to “an absurd result” entailing CIH having become an insured only for a short period and thereby acquiring “a complete immunity from being at the receiving end of a subrogated claim for recovery of an outlay that relates much more to the earlier uninsured period”. They gave the example of a CDL employee having been negligently exposed for eight years before 25 November 1964 and for just a week thereafter. On CIH’s case, they pointed out, CIH would be able to “escape all liability” under Clauses 2 and 5 by virtue of having become an insured under the Policy at the very end of the period of negligent exposure. Mr Kent QC and Mr Evans-Tovey submitted that, in the circumstances, CIH’s argument based upon a hypothetical claim being made by or on behalf of a CDL employee against CIH for negligence after 25 November 1964 ought to be afforded no weight. 
32.	Mr Kent QC and Mr Evans-Tovey furthermore submitted in this context that, since under the 2006 Act CDL is liable to its employees for the whole damage in consequence of any pre-25 November 1964 exposure, there can be no question of CIH being held liable in respect of the period after 25 November 1964. They gave an example to illustrate their submission. This involved assuming that CDL’s workforce at Uxbridge had all been transferred to CIH on 25 November 1964 and the Policy was simply cancelled as from that date. In that scenario, they submitted that: if a former employee suffering from mesothelioma had been exposed to asbestos throughout his employment with CDL, he would have pursued a claim against CDL alleging negligent exposure to asbestos only during the period when he was employed by CDL; CDL would have been liable to the employee under the 2006 Act in respect of the whole damage even if exposure may have continued after that date; and CDL would have been entitled to a full indemnity from CIH under Clauses 2 and 5 – an indemnity in respect of the period prior to 25 November 1964 and without it being at all relevant whether CIH was itself negligent or at fault either before or after that date. They then gave another example, which involved the Policy continuing but with CIH being substituted as the only insured from 25 November 1964 in its capacity as CDL employees’ new employer. Mr Kent QC and Mr Evans-Tovey submitted that, in this situation, the result would be the same: CDL would still have been liable to its (former) employee and, by reason of the 2006 Act, liable in respect of the whole of that employee’s damages; and CDL would have been entitled to an indemnity from CIH under Clauses 2 and 5, even if CIH itself had continued the negligent exposure after 25 November 1964, and without any scope for CIH to argue that Aviva was precluded from pursuing a subrogated claim (in CDL’s name) in respect of that indemnity because there would never have been any co-insurance.  Alternatively, Mr Kent QC and Mr Evans-Tovey explained, CDL is entitled to limit its claims under Clauses 2 and 5 to those liabilities incurred in respect of the pre-25 November 1964 period, with the result that there is then “absolutely no question of CIH being made liable for any insured risk” after 25 November 1964. 
33.	Either way, they submitted, since any responsibility which CIH might have under the 2006 Act relates to a liability arising in respect of a different period, so the coverage provided under the Policy to CDL and CIH respectively is to be regarded as different, and the bar on a subrogated insurer bringing a claim against a co-insured has no application. I shall deal firstly with this issue, namely whether Aviva is precluded from claiming against CIH in CDL’s name to the full extent, before going on to consider an alternative case put forward by Aviva to the effect that if there is any bar to Aviva bringing a subrogated claim in CDL’s name, it is nonetheless permissible for Aviva to recoup some of its outlay on CDL’s behalf to achieve an appropriate apportionment as between pre-Endorsement and post-Endorsement exposure. Mr Kent QC and Mr Evans-Tovey argued that this is the limit of the relevant bar (if there is one at all). They suggested, in particular, that implicit in what Lord Mance had to say in the IEGL case was an acceptance that there is a right of recoupment in circumstances such as the present. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted, in contrast, that any such entitlement would run counter to the approach adopted in the 2006 Act and would also be at odds with what, on a proper analysis, was decided by the Supreme Court in the IEGL case.
Is the ‘subrogation bar’ an absolute bar?
34.	For reasons which I shall now endeavour to explain, I am clear that Miss Mulcahy QC, Mr Lynch and Mr Ouwehand were right in the submissions which they made on this topic, and that it is not open to Aviva (through CDL) to pursue claims under Clauses 2 and 5 in respect of ‘straddler’ mesothelioma claims since the pursuit of such claims offends the co-insurance principle and brings the ‘subrogation bar’ into play. I state my reasons in what follows. First, however, I need to deal with an initial point.
35.	I have previously determined, in answer to Preliminary Issue 7, that it is not open to CDL/Aviva to pursue subrogated claims under Clauses 2 and 5 “inasmuch as the claim concerns a period when there was co-insurance”. There was some suggestion made by Mr Kent QC and Mr Evans-Tovey in their written submissions, at paragraph 51(a), that in relation to the period after 25 November 1964 “CDL can recover from CIH a sum representing its liability etc. under the contractual indemnity, but Aviva are precluded from recovering their outlay in respect of CDL’s liability by reason of the Judgment on preliminary issue 16(c)”. However, this does not seem to me to be right and, indeed, it should be noted that in paragraph 51(b) it is then stated that “CIH are not being called upon by CDL to indemnify CDL against liabilities arising out of acts or omissions post 25.11.64”, with a footnote explaining: “Not only because, in light of the indemnity, CDL would have no need to rely upon the 1978 Act but also because the ‘subrogation bar’ has in any event excluded such claims”. As I see it, this more accurately reflects what was decided as regards Preliminary Issue 7: CDL’s claims under Clauses 2 and 5, brought by Aviva in CDL’s name as a subrogated insurer, are barred inasmuch as they concern a period when there was co-insurance. As to that bar, it is right to acknowledge that in the Preliminary Issues Judgment at [174] to [183], when dealing with the co-insurance issue in the context of Preliminary Issues 16(c) and 7, I did not elaborate on the rationale which lies behind the so-called subrogation bar. I did not, therefore, explore the three types of rationale which have, over the years, been identified in the authorities: circuity of action, which is no longer seen as being applicable; the existence of an implied term in the insurance policy by which the insurer agrees not to pursue a co-insured in relation to expenditure which it is obliged to pay another co-insured – in effect, an implied waiver of its subrogation rights; and an implied term in the agreement between the co-insured parties (not in the insurance policy) to the effect that each party agrees not to look to each other for recompense but instead that they will seek an indemnity from the insurer. There is, in particular, a certain amount of support for the third of these approaches to be found in various authorities, including, for example, most recently Rathbone Brothers Plc v Novae Corporate Underwriting Ltd [2015] Lloyd’s Rep IR 95 at [101] to [105], and clearly, if it is the correct rationale, then, it represents a clear and direct reason why CDL could not bring a claim under Clauses 2 and 5. However, it seems to me that this is also (albeit less directly) the position applying the second of the suggested rationales: see, for example, the Rathbone case at [84] to [87]. On either approach, given that CDL’s present claims are subrogated claims, the suggestion that CDL can advance claims under Clauses 2 and 5 is not sustainable, assuming that that argument were even available to CDL (which it is not) in the light of my determination as regards Preliminary Issue 7. 
36.	Turning, then, to my reasons, I do not consider that it is an answer for Mr Kent QC and Mr Evans-Tovey to say that my determination in relation to Preliminary Issue 13 (that the Endorsement does not have retrospective effect) means that for relevant purposes the case is to be regarded as not entailing co-insurance since what CDL seeks to pass on to CIH in its claims under Clauses 2 and 5 is its liability to its employees in the period before 25 November 1964, a time when CIH was not an insured under the Policy. That argument is too simplistic in a case such as the present where the law is as complex as it is, and specifically where, as a result of the Fairchild, Trigger and IEGL cases (allied with the 2006 Act), if sued by a CDL employee in respect of any negligent exposure after 25 November 1964, CIH would be under a liability in relation to the entirety of the employee’s damages. The fact that CIH has not, in fact, been sued by a CDL employee is nothing to the point since, given that the question is what the Policy (and the Endorsement) should be regarded as providing by way of insurance cover (and to whom), what matters is what the position would be if CIH were to be sued. This is what enables it to be worked out whether this is a case of co-insurance: in particular, as I explained in the Preliminary Issues Judgment at [182], the critical question is whether the two insureds’ interests (here, CDL’s and CIH’s interests) are “inseparably connected” and “pervasive”. Again as I explained at [182], the fact that CIH is not facing a claim from a CDL employee directly but is instead being sued by CDL/Aviva in relation to liabilities which CDL has incurred (and Aviva has funded) to CDL employees cannot be significant: CIH’s liability under Clauses 2 and 5 entails  “the same damage that was visited upon CDL as a result of employees’ claims … now” being “sought to be visited upon CIH through the subrogated claims brought by Aviva in CDL’s name”, so as to mean that the “position of CIH is, for relevant purposes, coterminous with that of CDL”. I repeat also that the “relevant question is not how the liability arises but what the underlying claim is in the sense of what the individual employee alleges is the bodily injury which has been suffered”. If the underlying claim is the same, the interests of two or more insureds are pervasive, and there is co-insurance. I agree, in short, with the submission which was made by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand that, in the present case, in respect of mesothelioma claims, CIH is to be regarded as having insurance for precisely the same loss or damage as CDL in whose name the action is brought by Aviva. The fact that the route by which CIH’s liability comes about differs from the way in which CDL was under a liability to its employees makes no difference. Nor does it make a difference that CIH was insured only with effect from 25 November 1964 and, in view of my answer to Preliminary Issue 3, in respect of the period thereafter. What matters is that CDL’s and CIH’s interests are “inseparably connected” and “pervasive” as a result of the law as it now stands. 
37.	I test the matter in this way (as I did during oral argument): suppose that Aviva were met by demands from both CDL and CIH since both CDL and CIH were met with claims by ‘straddler’ CDL employees; in those circumstances, Aviva would have been obliged under the Policy to meet both CDL’s and CIH’s claims, in practice by simply paying the CDL employees’ claims. It is wholly unrealistic to think that Aviva would then be able to claw back the monies paid from CIH on the basis that, in contrast to CIH whose only liability was in respect of the period after 25 November 1964, CDL had a liability to the CDL employees concerned in respect of the periods before and after 25 November 1964. As far as Aviva is concerned, there is a single amount payable under the Policy in respect of the individual CDL employee claims. The obligation to pay is as to 100% in view of the Fairchild case and the 2006 Act. It is difficult to see, in such circumstances, why it would matter that CIH’s liability is not to CDL employees directly but to CDL under Clauses 2 and 5 and/or the 1978 Act. Mr Kent QC submitted that this ignores where the ‘merits’ lie in this case since it overlooks the fact that, but for the Endorsement, Aviva would clearly have been able to pursue CIH in its position as CDL’s subrogated insurer. This would have been, as Mr Kent QC put it, “par for the course with subrogation” as “some insurers have the luck of the draw and find there is some wonderful way of getting recovery”. Whilst that is, no doubt, the case as a general observation, I struggle nonetheless to see why it is relevant to the analysis. The fact is that the Endorsement changes the legal position. That it does so because of how the law (in the shape of the Fairchild, Trigger and IEGL cases and the 2006 Act) has developed long after the Endorsement was entered into does not matter. I am satisfied that the parties should be taken, when entering into the Endorsement, as having agreed to the legal position as it has today turned out to be. That may itself entail an element of “luck of the draw” but it seems to me that, consistent with the approach described by Lord Mance in the Trigger case at [70], this is the correct legal approach. Lord Mance stated as follows:
“…, if the common law during or even after the currency of an insurance develops in a manner which increases employers' liability, compared with previous perceptions as to what the common law was, that is a risk which the insurers must accept, within the limits of the relevant insurance and insurance period. Eady J correctly identified this in Phillips v Syndicate 992 Gunner [2003] EWHC 1084 (QB), [2004] Lloyd’s Insurance and Reinsurance Reports 426, 429 (left). The declaratory theory ‘does not presume the existence of an ideal system of the common law, which the judges from time to time reveal in their decisions. … But it does mean that, when judges state what the law is, their decisions do …. have a retrospective effect’ - in the sense that the law as stated ‘will, generally speaking, be applicable not only to the case coming before [them] but, as part of the common law, to other comparable cases which come before the courts, whenever the events which are the subject of those cases’: Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349, 378G-H, per Lord Goff. 
The declaratory theory is a pragmatic tool, essential when cases can only come before the court ‘some time, perhaps some years’ after the relevant events occurred, and when ‘the law [must] be applied equally to all, and yet be capable of organic change’ (p 379A). A similar principle must, generally speaking, apply in relation to a statute such as the Compensation Act 2006, which changes or corrects the common law to what Parliament perceives to be a more appropriate result for the purposes of all future cases coming before the courts, whenever the events giving rise to them. In the case of that Act, the result was one which the courts might as a matter of common law well have themselves accepted (and which indeed Lord Rodger in his powerful dissent in Barker v Corus believed that the common law had accepted) in Fairchild.”
38.	I agree with Miss Mulcahy QC that, in the circumstances, the matter needs to be approached on the basis, in effect, that the parties (including RPA, Aviva’s predecessor) agreed to the legal position being what it has turned out today to be despite not knowing what it would be because their crystal ball did not predict that the law would take the course which it has done. Mr Kent QC suggested that the present case is different in that what Lord Mance was addressing was the effect of later legal developments on the scope of an insuring clause, rather than what RPA should be taken as having agreed to waive as far as the subrogation clause in the Policy is concerned. Although I recognise the distinction, it nonetheless seems to me that the approach described by Lord Mance is applicable in this case also. Accordingly, I cannot accept Mr Kent QC’s suggestion that, insofar as the ‘no recovery’ principle is based upon an analysis which sees a term implied into the Policy to the effect that an insurer cannot pursue a subrogated claim in the name of one co-insured against another co-insured notwithstanding the express subrogation clause contained in the Policy, it is not appropriate to regard Aviva as having impliedly waived its subrogation right to recover as regards CIH in a case such as the present.
39.	It follows that I am not swayed by Mr Kent QC’s ‘merits’ submission. Nor do I recognise the absurdity which Mr Kent QC and Mr Evans-Tovey suggested is the result of CIH’s arguments being accepted, the submission supported by the two examples which they gave and to which I have referred. The result is not absurd but is merely the consequence of the law in relation to mesothelioma claims having evolved in the way which it has and its necessary impact at what Miss Mulcahy QC, Mr Lynch and Mr Ouwehand described as “the insurance level”. The law is as it is for policy reasons. There can be no justification for adopting a position as regards insurance which is at odds with the law in relation to underlying liability. In line with the approach adopted in the IEGL case at [7] and, before that, in the Trigger case at [45], the “fundamental focus of the policies is on the employment relationship and activities during the insurance period and on liability arising out of and in course of them”. In these circumstances, I am in no doubt that the Policy should be read as effectively mirroring the underlying position as between the insured employer (CDL) or other potential defendant (CIH) and the relevant CDL employee (third party claimant).
40.	Dealing with certain other objections which were made by Mr Kent QC and Mr Evans-Tovey, I also see no merit in the suggestion (not mentioned above) that, in order to be entitled to an indemnity under the Policy in respect of its liability to CIH under Clauses 2 and 5, CIH would itself have “to plead and prove their own negligence on the basis that the injured employee might have had a claim against them in relation to exposure during the post-Endorsement period”. In my view, this is not what CIH needs to do at all. CIH can simply point to its liability to CDL under Clauses 2 and 5 (and under the 1978 Act) in respect of CDL’s liability to its employees. In this context, it can also hardly be overlooked that CDL itself has alleged negligence on CIH’s part. Mr Kent QC suggested in his oral submissions that “we no longer need to pursue that”, but the fact is that this is an allegation which has been made. I agree with Miss Mulcahy QC when she submitted that, in the circumstances, this is nothing like a case where a third party claims against an insured alleging contractual liability alone, and the insured then says to its insurer that, despite the only claim against it being a contractual claim, actually it was negligent as well, and so the insurer is obliged to meet the insured’s claim. In the present case, CDL (with Aviva driving the claim having paid out under the Policy) has itself alleged negligence alongside its claims under Clauses 2 and 5. 
41.	I do not consider either that there is anything in the submission made by Mr Kent QC and Mr Evans-Tovey that CIH’s liability under Clauses 2 and 5 is not covered under the Policy because it is the only liability which CIH is under and, as such, is excluded under the Policy. I say this for a number of reasons. I have previously decided that the Policy indemnity against “liability at law for damages” extends to CIH’s liability to CDL under the 1978 Act and so is not confined to liability under Clauses 2 and 5. This was the matter which was addressed by Preliminary Issue 12. I explained at [162], however, that if “CIH is under no liability in respect of the 1978 Act and is only liable under the Sale Agreement, then, the exception applies”. There is in this case a claim by CDL against CIH under the 1978 Act. This is an express claim which is distinctly made. The position, quite simply and quite unexceptionally, is that CDL is in relation to some claims claiming the same loss under Clauses 2 and 5 as it is under the 1978 Act. The Re-Amended Particulars of Claim at paragraphs 21 to 23 make this abundantly clear. Paragraph 21, in particular, states that CDL “is entitled to claim from [CIH] indemnity, alternatively contribution in such sums as may be just, in respect of [CDL’s] outlay as set out in Schedule B hereto”, and paragraph 22 states that “The Claimant claims such indemnity, alternatively contribution pursuant to section 1 of the Civil Liability (Contribution) Act 1978 and under 51(3) of the Senior Courts Act 1981”. As will become apparent later when the Limitation Issue is addressed, Schedule B is a reference to a schedule which was served on 30 October 2014 and included 31 claims (apparently pursued under the 1978 Act only) which also appeared in Schedule A and so represented claims under Clauses 2 and 5. In short, the same sums of money have been claimed by CDL against CIH both under Clauses 2 and 5 and under the 1978 Act (where claims have been brought alleging both causes of action). Mr Kent QC suggested in his oral submissions that, although this is the case, nonetheless in reality the claim under the 1978 Act will probably not succeed to the extent of 100% since, in contrast to the claims under Clauses 2 and 5, it is a claim for a contribution and, in practice, a contribution is unlikely to lead to a full recovery. His submission, therefore, was that the exclusion in respect of exclusively contractual liability would come into play in this case. However, as ultimately acknowledged by Mr Kent QC, the onus is on Aviva to establish that the relevant exclusion in the Policy providing that Aviva “shall not be liable in respect of liability which attaches by virtue of an agreement which would not have attached in the absence of such agreement” is applicable; it is not for CIH to prove that it does not apply. This is made clear in MacGillivray on Insurance Law (13th Ed., 2015) at paragraph 21-007, as follows:
 “Once the insured has proved that the loss was caused by the general peril insured against, it is for the insurer to bring himself within any exception in the policy on which he relies. … A further complexity arises where an exception is itself subject to an exception, e.g. where it is in the form, ‘[t]his insurance does not cover [risk X] except [where Y applies]’. In Omega Proteins Ltd v Aspen Insurance UK Ltd [2011] Lloyd’s Rep. I. R. 183 at 197, Christopher Clarke J, citing this paragraph in the 11th edition of this work as identifying the problem of construction to be addressed, held that …, in the case of an ‘exclusion clause within an exception’, the insurer bore the burden of establishing the exclusion from cover, including the burden of proving that the exception to the exclusion did not apply.”
In consequence, as Mr Kent QC recognised, it is for Aviva to make good its reliance on the relevant exclusion in this case. This means that it is for Aviva to pursue its (or, more accurately, CDL’s) claims under the 1978 Act in order to establish that those claims will, as Mr Kent QC predicted, lead to a recovery which is less than what is recoverable under Clauses 2 and 5. For present purposes, therefore, the point goes nowhere.  
42.	This brings me to the question of whether CDL is entitled to limit its claims under Clauses 2 and 5 to those liabilities incurred in respect of the pre-25 November 1964 period, with the result that there is then “absolutely no question of CIH being made liable for any insured risk” after 25 November 1964. It seems to me that, whilst CDL is clearly entitled to frame its case in whatever way it chooses, this is not an answer to the matter which is in issue, even putting to one side the fact that to date CDL has not chosen to limit its claim in this way. I consider that there is some force in the observation made by Miss Mulcahy QC that CDL’s attempt to limit its claim would constitute an unfair selection of the period to which a loss is to attach, and so would fall foul of the principle described in the IEGL case, albeit in a different context, at [43] as follows:
“It is contrary to principle for insurance to operate on a basis which allows an insured to select the period and policy to which a loss attaches. This is elementary. If insureds could select against insurers in this way, the risks undertaken by insurers would be entirely unpredictable.”
It cannot be permissible for Aviva to seek to achieve a result which suits it (and it alone) by ensuring through the way in which CDL puts forward its case that the Policy responds in full to the liabilities of one co-insured (CDL) but not to the liabilities of another co-insured (CIH). This is all the more the case in circumstances where a ‘straddler’ claim - the claim made by the CDL employee against CDL - necessarily straddles both the period before 25 November 1964 and the period after 25 November 1964. For CDL/Aviva, in such circumstances, to recast that underlying claim, a claim which as a result of the 2006 Act would mean that both CDL and CIH (if the claim had been brought against CIH rather than CDL) were liable in respect of the CDL employee’s “whole damage” over both periods, in order that Aviva can make a recovery from one of its co-insureds (CIH) is clearly inappropriate. The fact that CDL may (or may not) be able to limit its claim for contractual indemnities does not assist CDL because that does not alter the nature of what the individual employee alleges is the bodily injury which has been suffered. That is the underlying event in respect of which, through the Policy and the Endorsement, Aviva has provided insurance cover to both CDL and CIH. 
43.	This leaves the further point which was made by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand, namely the suggestion that, in circumstances where CDL is entitled to make a full recovery from CIH under Clauses 2 and 5 in respect of the period after 25 November 1964, it is not open to CDL (in reality, Aviva as CDL’s subrogated insurer) to look to CIH under Clauses 2 and 5 in respect of the period before 25 November 1964 since this would entail CDL effectively seeking to recover a full (100%) indemnity twice – both in respect of the period after 25 November 1964 and in respect of the period before 25 November 1964. In support of this argument, reliance was placed on a number of authorities. These included (again) the IEGL case, where Lord Mance commented at [56] as follows: 
“So far as appears, during the overall period of 27 years during which it exposed Mr Carré to asbestos dust, GGLCL only had insurance for two periods, six years with Midland and two years with Excess. ... Zurich could not have any sort of subrogation right against Excess, since, if Zurich is liable for IEG’s full loss, IEG can have no further claim for indemnity against Excess.”
44.	I was referred in this context also to Bovis Construction Co v Commercial Union Assurance Co Plc [2001] 1 Lloyd’s Rep. 416, in which David Steel J at [10] cited with approval the following passage from the Scottish decision in Sickness & Accident Assurance Corp v General Accident Assurance Corp (1892) 19 R.977: 
“The right of an underwriter who has indemnified the insured to claim contribution from the other underwriters cannot be founded upon the doctrine of subrogation, because an assignee can have no higher right than his cedant and a shipowner who has received full indemnity from one underwriter can never make a claim against another underwriter. The answer, therefore, to the claim of an underwriter who had paid, if made only in the right and as assignee of the assured, would be that the contract was one of indemnity, and that the insured had already been indemnified.”
45.	Perhaps the most helpful authority from CIH’s perspective, however, was Caledonia North Sea Ltd v British Telecommunications Plc & Others [2002] UKHL 4, [2002] 1 Lloyd’s Rep. 553 in which Lord Mackay said this at [63]: 
“Sickness and Accident Assurance Association v General Accident Assurance Corporation Limited (1892) 19 R 977 dealt with the situation in which an insurance company, after paying to a tramway company a sum due under a policy insuring against loss by accident, raised an action in its own name against another insurance company for contribution on the ground that it had insured the same risk, which is the situation as it was presented in the contractor’s argument in the present case. Where there are co-ordinate indemnities for the same loss it is clear that the doctrine of subrogation cannot provide an answer, and that where one of the indemnifiers pays, the way their liabilities inter se are decided is by an action of relief. The principle of res inter alios acta will not be of relevance in that situation where the overriding principle is that a person cannot be indemnified twice over for the same loss, and therefore if one indemnifier has made good the loss to the indemnified the rights of the indemnified are no longer useful in deciding questions between the indemnifiers.” 
46.	I was also taken to the following extract in MacGillivray  at paragraph 24-004:
“The width of the [subrogation] doctrine was described by Brett L.J. in the leading case of Castellain v Preston:
‘… as between the underwriter and the assured, the underwriter is entitled to the advantage of every right of the assured, whether such a right consists of contract, fulfilled or unfulfilled, or in remedy for tort capable of being insisted on or already insisted on, or in any other right whether by way of condition or otherwise, legal or equitable, which can be, or has been exercised or has accrued, and whether such a right could or could not be enforced by the insurer in the name of the assured, by the exercise or acquiring of which right or condition the loss against which the assured is insured, can be, or has been diminished.’
Accordingly the insurer may require the assured to enforce a right to be indemnified against the loss under an indemnity clause contained in a contract between the assured and the indemnifier, so long as the indemnifier is the party with primary liability for the loss in question. Where the insurer and indemnifier have co-ordinate obligations to indemnify the insured, as where both are insurers, the insurer who has paid the insured should claim contribution from the other indemnifier in his own name, since the insured no longer has a claim for indemnity”. 
47.	Ultimately, however, I am not really sure that this further submission adds to the point which I have already addressed. This is because, in the end, its success depends on it being accepted that, as a result of the Fairchild case and the 2006 Act, allied with the Trigger and IEGL cases, CIH is entitled under the Policy to seek an indemnity from Aviva in respect of 100% of its liabilities (if any) to CDL in respect of ‘straddler’ mesothelioma claims. I agree that, if this is the position, then, the subrogated claim brought by Aviva in CDL’s name against CIH is in reality a claim by an insurer against a contractual indemnifier (CIH) in circumstances where the insurer (Aviva) is itself obliged to indemnify the contractual indemnifier (CIH) for the sum which the co-insured (CDL) is claiming. I am not convinced that, in circumstances, however, where CDL has not yet been paid anything by CIH, the authorities to which I have referred necessarily apply in this case. In any event, for reasons which I have given, it is unnecessary that I decide the case on this additional basis.     
Is apportionment permissible?
48.	I come on now to address CDL’s alternative contention, which is that if there is any bar to Aviva bringing a subrogated claim in CDL’s name, it is nonetheless permissible for Aviva to recoup some of its outlay on CDL’s behalf to achieve an appropriate apportionment as between pre-Endorsement and post-Endorsement exposure. Mr Kent QC and Mr Evans-Tovey submitted that the right of recoupment arises in equity and is, as they put it, “based upon the period when CIH were not insured under the Policy”. Accordingly, they suggested, CIH’s entitlement under the Policy “should by some means be confined to an aliquot share of the liability based on the relevant apportionment between pre-and post-Endorsement exposure”. Their submission was that, as a matter of policy, this would at least avoid the imposition of an “unjust and wholly anomalous burden which would otherwise fall on any particular insurer with whom insurance was only taken out for part of the total period of exposure”.
49.	This was something which Lord Mance addressed in the IEGL case at [77]:
“In the present case, an insured who insures for a limited period necessarily accepts that it is only liability incurred during that period for which he has cover. The unique feature of the present situation is that the whole substratum of the relevant insurance policies has changed fundamentally since they were underwritten, and the law has, for the first time ever, imposed liability on the basis of risk, rather than the probability, that negligence during the insurance period led or contributed to the illness complained of. The concomitant of insurance liability in this situation must be a recognition that the law can and should redress the unjust and wholly anomalous burden which would otherwise fall on any particular insurer with whom insurance was only taken out for part of the total period of exposure by the insured, by recognising an obligation on the part of the insured to contribute pro tanto to such liability as a self-insurer.”
Lord Mance was here addressing the topic of self-insurance in the context of facts which, as explained at [65] and [67], involved GGLCL having chosen not to take out insurance with Midland for 21 years and not to take out any insurance with any other insurer for 21 years. It was because of this that Lord Mance treated GGLCL (which became IEGL) as a self-insurer (see [65]), explaining at [75] what, in this context, he meant by self-insurance:
“It is equally irrelevant that the law knows no such thing as a contract of self-insurance. It is of course true that, just as an insured cannot sue himself, so an insured cannot in law insure with himself. But the concept of ‘self-insurance’ is not unhelpful in identifying an important truth. A person who does not insure at all is well understood to be undertaking a risk for his own account, for which he should answer accordingly. A person who after insuring for a period with insurer A then goes for a period to insurer B is understood to be looking in relation to the later period to insurer B alone. Even courts are entitled to deploy a helpful phrase to point to such truths. The United States courts did so in Insurance Company of North America v Forty-Eight Insulations Inc 633 F.2d 1212 and Security Insurance Co of Hartford v Lumbermens Mutual Casualty Co (2003) 264 Conn 688, 826 A2d 107, when they held that, as between an insured and its insurers, liability for defence costs should be pro-rated across all periods of insurance and self-insurance during which exposure had occurred. In Lumbermens the insurer was thus held liable pro-rata by reference to the relationship between its insurance period, other periods of insurance with other insurers and periods of ‘self-insurance’.” 
50.	The difficulty with CDL’s reliance on what Lord Mance’s observations at [77] (and his conclusion at [78]) is that the present case is not a self-insurance type of case. Unlike GGLCL, CIH did not make the choice not to insure in respect of earlier years. It can hardly be overlooked in this context that, after entering into the Sale Agreement, CIH took out insurance with RPA by obtaining the Endorsement. The fact that I have decided, in answer to Preliminary Issue 13, that the Endorsement did not have retrospective effect does not mean that I should conclude that CIH made an express choice not to have insurance in relation to the period before 25 November 1964. This is a conclusion which I reached based on what I regarded (and continue to regard) as the correct construction of the Endorsement. It is a conclusion which it was argued on CIH’s behalf at the Preliminary Issues trial I should not have arrived at since CIH’s position was that the Endorsement had retrospective effect. In the circumstances, I do not consider that CIH should be treated as though it had made a GGLCL-like choice not to insure in relation to the prior period. Furthermore, it should be noted that, in contrast to the position in the IEGL case, where Midland only received premium for six out of the 27 years of exposure, Aviva received a premium throughout the 10-year currency of the Policy, and so from 31 December 1956 to 31 December 1966. Furthermore, the premium which Aviva received was the same as it would have received even if CIH had been a co-insured in the earlier period because I have previously made the point, in the Preliminary Issues Judgment at [149], and uncontroversially as I understand it, that since the underlying risk was the same, namely the risk of injury to employees of CDL as CIH’s subsidiary, there would have been no need for an additional premium because the premium would have been “standardised” in accordance with Regulation 3 of the ‘Tariff Regulations’. The contrast between Aviva’s position in the present and that of Zurich (as successor to Midland) in the IEGL case is, therefore, pretty stark. 
51.	In short, there is simply not the same call in the present case for a ‘Fairchild recoupment right’ as there was in the IEGL case. Indeed, I am clear that, were I to take the view that Aviva should be afforded a ‘Fairchild recoupment right’ on the facts of the present case, this would entail a significant and impermissible extension of the principle expounded in the IEGL case. Applying “a broad equitable approach”, in my view, it would be neither fair nor equitable were Aviva to be allowed to recoup as against CIH simply so as to enable Aviva to avoid the financial consequences of having agreed, through the Endorsement, to provide CIH with cover under the Policy even though Aviva is liable to CDL under the Policy in relation to the entire period from 1965 to 1966. It was CDL which exposed its employees to asbestos, thereby attracting the liabilities which Aviva has had to bear under the Policy. In meeting these liabilities, Aviva has done nothing more than it agreed to do when it agreed to insure CDL. As a result of the Endorsement, CIH is also insured by Aviva for the same liability. Aviva does not find itself facing a claim by an insured such as IEGL under which it is contractually obliged to pay more than had always been envisaged and in relation to which it had not received an appropriate level of premium. I am satisfied that to afford Aviva a ‘Fairchild recoupment right’ on the facts  of the present case would not strike a “fair balance of the interests of victims, insureds and insurers” (the term used by Lord Mance in the IEGL case at [55]) but would merely permit Aviva to gain a commercial advantage to which it has no legitimate claim in circumstances where it had agreed to indemnify CDL throughout the life of the Policy and so was always obliged to meet liabilities stemming from CDL employee claims and in circumstances where it is accepted that, were CIH to have been confronted with such claims being made directly against it, Aviva would have been obliged similarly to meet those claims.
52.	This is sufficient to mean that I cannot accept that Aviva has an entitlement to assert a ‘Fairchild recoupment right’ in this case. I need not, therefore, go on to address certain further points which were raised by Miss Mulcahy QC in response to Mr Kent QC’s submissions on this topic. I shall, however, do so for completeness. First, Miss Mulcahy QC suggested in her oral submissions that, given that the general position in relation to liability insurance is that there is no right of apportionment between periods where there is insurance and periods where there is no insurance, this underlines how the ‘Fairchild recoupment right’ is an unusual right which should only exceptionally come into play. She relied for these purposes on Colinvaux & Merkin’s Insurance Contract Law (10th Ed., 2016) at paragraph C-0635 where, referring to the IEGL case, the following is stated:
“The minority could see no basis for an insurer seeking to recover from the insured part of a payment contractually due to the assured, and indeed it may be noted that the law does not generally recognise apportionment of an insured loss between an insurer and its assured where there is underinsurance other than where the policy is subject to average, as is the case with marine policies. The minority regarded the term ‘self-insured’ as a euphemism for ‘uninsured’ and the authorities are clear that apportionment has no part to play in non-marine law where there is underinsurance.”
In a footnote reference is then made to Standard Life Assurance Ltd v Ace European Group [2012] EWCA Civ 1713, [2013] Lloyd’s Rep. IR 415, a decision of the Court of Appeal on which Miss Mulcahy QC also placed reliance. Specifically, in that case Tomlinson LJ said this at [44]:
“… I agree with Mr Leggatt that not only is it clear from the authorities that the rationale underlying the principle of apportionment has no place in liability insurance, but also that it would in fact be irrational and unprincipled to attempt to introduce it. In liability insurance, the assured recovers his loss up to the policy limit. Thus where a liability policy has a limit of £100 million and liabilities are incurred of £200 million, it is not open to insurers to say that the insured is ‘his own insurer’ in excess of £100 million with the consequence that insurers’ liability in respect of the £200 million loss is limited to £50 million. The insured recovers the full £100 million. …”. 
He went on at [45]:
“As Mr Leggatt also pointed out, the concept of underinsurance makes no sense in the context of liability insurance where the extent of the liabilities to be incurred is unknown when the policy is agreed. An insured may prove to be inadequately insured in the light of the liabilities to which he is potentially exposed and which ultimately eventuate, but that does not come about as a result of deliberately underestimating the extent of any known liability. By definition the liability will not have been incurred at the inception of the insurance.”
It seems to me that there is, however, a distinction between a case where there is insurance but not in what turns out to be a sufficient amount and a case where there is no insurance in place at all (and so at any level). The former is a genuine case of under-insurance, whereas the latter is not: it is a case where there is simply no insurance. In the circumstances, I am not persuaded that it is accurate to speak in terms of there being any general rule concerning apportionment. I readily accept, however, that apportionment is exceptional.    
53.	The second point raised by Miss Mulcahy QC concerns the fact that no such claim has to date been advanced, the first mention of Aviva having a ‘Fairchild recoupment right’ coming in Mr Kent QC’s and Mr Evans-Tovey’s written submissions. There is some force in this. The claim concerned would need to be advanced in Aviva’s own name, not that of CDL. This has not yet happened. Whether Aviva should be permitted to introduce such a claim, were an appropriate application to be made, is not a matter which strictly, therefore, even arises. 
54.	The third point is more substantive: Miss Mulcahy QC took issue with Mr Kent QC’s suggestion that Aviva is entitled to assert the right by way of set-off against CIH’s claim under the Policy. Mr Kent QC submitted that, in the section of his judgment in which he dealt with the position of an insolvent insured and a claim by a sufferer of mesothelioma (described by Lord Mance as a “victim”) under the Third Parties (Rights against Insurers) Act 1930, starting at [83] and ending at [97], Lord Mance, in effect, proceeds on the assumption that there is an ability to set-off, as Mr Kent QC put it, “as long as no third party is prejudiced”.  It was his submission that Lord Mance was focusing on the position where a victim is standing in the shoes of his or her insured and asserting a claim against the insurer under the 1930 Act, and that implicit in what he had to say was an acceptance that in a case not involving the 1930 Act (and so a solvent insured) the insurer has a right of set-off. Miss Mulcahy QC, in contrast, submitted that Lord Mance should not be taken as confining his conclusion that there is no right of set-off to a case which entails a claim under the 1930 Act and so to a case where the insured is insolvent. She suggested that it would make no sense to regard Lord Mance as doing this because, in bringing a claim under the 1930 Act, a victim stands in the shoes of the insured and so should not be regarded as being in any better position than an insured which is solvent.
55.	I have not found this a particularly straightforward matter to resolve. On what is really something of a provisional basis, given that it is not a point which is central to my rejection of Aviva’s assertion of a ‘Fairchild recoupment right’, my conclusion is that Lord Mance is not to be regarded as having said anything at all concerning the broader issue, namely whether Aviva would enjoy a right of set-off were it to have the ‘Fairchild recoupment right’ which it was contended by Mr Kent QC and Mr Evans-Tovey it does have. As I see it, Lord Mance was simply, and only, dealing with the 1930 Act scenario. In my view, nothing he had to say, necessarily somewhat in passing, concerning the situation where the insured is solvent (and so where the 1930 Act does not apply) really assists one way or the other as regards the question of set-off. I say this for a number of reasons. First, it is apparent from the paragraph in which he introduced the section that Lord Mance did not intend to address the situation of a solvent insured. He said this at [83]:
“Since IEG is solvent and has met the whole of Mr Carré’s loss, the present appeal concerns only the relationship between IEG and Zurich. In that context, the precise legal relationship between Zurich's right to look to IEG for contribution and IEG's policy claim against Zurich does not matter. In practice, even if Zurich's right to contribution does not give rise to a defence, a procedural order for a stay would ensure that the one claim could not be enforced without taking into account the other. But in cases where the person responsible is insolvent, and the use of the Third Parties (Rights against Insurers) Act 1930 (soon, it is to be hoped, to be replaced by the 2010 Act) is invoked, it may be important whether the right of contribution which Zurich enjoys constitutes a defence reducing the indemnity for which the insured can sue under that Act.”
Lord Mance’s reference to the making of a procedural order for a stay in a case where the insured is solvent seems to me to demonstrate that he was not meaning to deal with, or to be taken as dealing with, the position of a solvent insured and, specifically, whether in such a case the insurer has a right of set-off. Mr Kent QC essentially acknowledged this during the course of his submissions, but then went on to observe that, if Lord Mance had thought that “it would be manifestly unjust” for an insurer to have a right of set-off, it is to be expected that he would have said so in this paragraph. I do not agree: Lord Mance was simply not dealing with the point at all.  
56.	Secondly, although Miss Mulcahy QC was right to highlight what Lord Mance went on to say at [86], which entailed a broader objection to the existence of a right of set-off not confined to the position of an insolvent insured, I am not convinced that this demonstrates that later on, when setting out his reasoning and ultimate conclusion, Lord Mance should be regarded as dealing with the position of solvent insureds as well as insolvent insureds. At [86] Lord Mance said this:
“… Zurich positively submitted that it would have no right of set-off, legal or equitable. One objection to set-off is that a right to contribution only arises upon payment by the person seeking contribution: see eg Andrews & Millett's Law of Guarantees (6th ed) (2011), para 12-019, citing Ex p Gifford (1802) 6 Ves Jr 805 and In re Snowdon (1881) 17 Ch D 44; and see Davies v Humphreys (1840) 6 M & W 153, Stirling v Burdett [1911] 2 KB 418 and In re Beaven [1913] 2 KB 595, 600. On the face of it, that presents a real obstacle to any suggestion by any insurer in Zurich’s position of set-off, whether legal or equitable, against IEG’s claim for the full amount of its loss.”
This supports Miss Mulcahy QC’s submission that the ‘Fairchild recoupment right’ is in the nature of a ‘pay and be repaid’ remedy, so as to mean that it is a right which can only come into play after the insurer has paid the insured the indemnity to which the policy of insurance relates. However, Lord Mance then went on at [88] to say this, after identifying certain first instance authority set out at [87] which might point towards there being no need for the insurer first to have to pay:
“Accepting the fairness of the thinking behind this first instance authority without further examination, I doubt whether it could or should affect the application of the general principle mentioned in para 86 in the particular context of a claim by a victim under the 1930 or 2010 Act.”
Lord Mance was here very specifically focusing on the position of an insolvent insured. The reference is no more broad than that, and this points to what he went on to say later in the same paragraph similarly applying to the insolvent insured scenario and not also to the position where there is a solvent insured, despite the fact that the language used in the later passage is not as specific as the above. Lord Mance said this:
“Considerations of justice and policy would also support the treatment of the insurance and the contribution positions as legally separate, when an opposite approach would be to the prejudice of the victim, in whose favour the insurance would otherwise operate and who is not concerned with the circumstances giving rise to any contribution claim.”
In context, therefore, it seems to me that what Lord Mance was here saying does not support the submission made by Miss Mulcahy QC that Lord Mance should be taken as describing the position in relation to a solvent insured. In my view, Lord Mance was here dealing only with the position where there is an insolvent insured.
57.	Thirdly, although Miss Mulcahy QC also relied on what Lord Mance stated at [90], I consider that this also provides no real support for Miss Mulcahy QC’s submission. In this paragraph Lord Mance addressed the topic of equitable set-off by reference to Hanak v Green [1958] 2 QB 9, which he described as the “locus classicus”. He said this:
“… I consider that, in a context where any set-off arises from circumstances outside the insurance policy and would be to the prejudice of a third party victim, the considerations of policy and justice behind the rules developed in Fairchild and Trigger would probably mean that it was just (rather than ‘manifestly unjust’) for Zurich to have to fulfil its insurance policy obligations, before asserting against IEG any contribution claim based on circumstances outside the scope of the insurance to the prejudice of that victim. …”.
He continued in similar vein at [92]:
“Here, any right of contribution is best analysed in my view as arising from circumstances outside the insurance policy, and on that basis as not capable of giving rise to a set-off at all.”
Miss Mulcahy QC submitted that this consideration applies both to insolvent insureds and to solvent insureds since, as she put it, in each case, the ‘Fairchild recoupment right’ “arises outside the policy” and, as such, cannot give rise to an equitable set-off. This may be right as a matter of principle. It is not clear to me, however, that Lord Mance should be taken as here addressing his mind to the position of a solvent insured. On the contrary, I consider that he was not doing so, or even purporting to do so.
58.	It is not appropriate that I myself determine the matter of principle in circumstances where, as I have already stated, I do not need to do so in order to determine whether Aviva can assert a ‘Fairchild recoupment right’, and in circumstances also where the sole focus of the submissions before me was on whether Lord Mance should be taken as having said anything about the position as between an insurer and a solvent insured. I would nonetheless observe that it is possible that Lord Mance’s reference to prejudice to a victim reflects a thinking that, where an insured is insolvent, a victim has no means of obtaining financial redress other than by bringing a claim directly against the insurer, whereas if an insured is solvent, then, depending on the size of the claim and the financial wherewithal of the insured, the victim ought to be able to make a recovery without being concerned about the insurance position of the insured against which the victim’s claim is brought. In that situation, there will be no prejudice to the victim. If this is right, then, contrary to Miss Mulcahy QC’s submission, there may not be the same need to deny a right of set-off to the insurer as there is in a case where the insured is insolvent. 
Overall conclusion
59.	In conclusion on this aspect, although I am not persuaded that the IEGL case provides any real assistance in relation to the set-off question in a case involving a solvent insured, I am nonetheless clear that, on the facts of the present case, Aviva has no ‘Fairchild recoupment right’. It follows that Aviva is precluded from bringing claims in CDL’s name for mesothelioma in full in ‘straddler’ cases where there is any material exposure on or after 25 November 1964.
Divisible disease (diffuse pleural thickening) claims
60.	In relation to divisible disease (diffuse pleural thickening) claims, it was common ground that any liability of the tortfeasor is confined to a proportionate share of each employee’s damages based on the period of exposure for which the tortfeasor is liable. This common ground reflects the parties’ agreement that the effects of asbestos are cumulative, since in cases of asbestosis or diffuse pleural thickening, the resultant injury is considered to be, or characterised as, ‘divisible’, and the law is that a defendant tortfeasor who has materially contributed to that injury is only liable to the extent of its contribution to the total exposure: Holtby v Brigham & Cowan (Hull) Ltd [2000] ICR 1086. 
61.	Accordingly, in the case of such an injury to a CDL employee due to CDL’s negligence before and after 25 November 1964, it was agreed: (i) that where CDL is liable for a CDL employee’s damage apportioned to the period before 25 November 1964, then, CDL can recover from CIH a sum representing its liability under Clauses 2 and 5, and Aviva is not precluded from recovering from CIH that sum through a subrogated claim in CDL’s name; and (ii) that where CDL is liable for a CDL employee’s damage apportioned to the period after 25 November 1964, then, CDL and Aviva in CDL’s name (as subrogated insurer) cannot recover from CIH a sum representing its liability under Clauses 2 and 5.
62.	Similarly, in the case of a divisible injury to a CDL employee due to CIH’s negligence before and after 25 November 1964 but if, and only if, CIH is sued directly by a CDL employee or his estate for damages for such injury, it was agreed: (i) that where CIH is liable for that employee’s damages apportioned to the period before 25 November 1964, then, by reason of Clauses 2 and 5 and section 7 of the 1978 Act, CIH cannot recover a contribution under the 1978 Act from CDL, and nor is CIH entitled to an indemnity under the Policy against that apportioned part of the damage because I have held that CIH was not insured for that period; and (ii) that where CIH is liable for that employee’s damage apportioned to the period after 25 November 1964, then, by reason of Clauses 2 and 5 and section 7 of the 1978 Act, CIH cannot recover a contribution under the 1978 Act from CDL, albeit that CIH is entitled to an indemnity under the Policy against that apportioned part of the damage because I have held that CIH was insured for that period (after 25 November 1964). 
Lung cancer claims 
63.	In cases of claims for damages for lung cancer, there was also agreement between the parties. It was agreed that Aviva is precluded from recovering damages and claimant’s costs in ‘straddler’ cases for that proportion of each lung cancer claim which relates to the period of exposure after 25 November 1964 relative to the total period of insured exposure; and that where there is only exposure in the Insured Period, Aviva/CDL are not entitled to pursue any part of that claim. This is because, as I have already explained and as noted by Lord Mance in the IEGL case at [4], the “special rule” in the Fairchild case confers a right of suit on victims of mesothelioma by reference to each significant exposure, rather than any probability that the particular exposure relied on led or contributed to the disease, and the House of Lords subsequently decided in the Barker case that a person responsible is liable not for the whole damages attributable to the mesothelioma, but only in proportion to his own contribution to the overall exposure. Significantly, as previously noted, the reversal of this rule brought about by the 2006 Act applies only to mesothelioma claims, and so the position as regards lung cancer claims remains as it was before that Act became law. Furthermore, in the Heneghan case it has recently been confirmed by the Court of Appeal that lung cancer is within the Fairchild and that the Barker approach to apportionment applies in relation to quantum: see [8], [12], [22], [34], [35], [41], [44]-[48] and [50]. 
64.	The parties were, in these circumstances, agreed that the correct approach is to apply a Barker apportionment in this case. This means that CIH is liable in respect of that part of the overall exposure which it is obliged to indemnify but, since CIH became CDL’s co-insured with Aviva on and after 25 November 1964, CIH is entitled to an indemnity in respect of its relevant liability to the extent that it falls within the Insured Period. It means also that Aviva is precluded from recovering via a subrogated claim in CDL’s name damages and claimant’s costs in ‘straddler’ cases for that proportion of each lung cancer claim which relates to the period of exposure after 25 November 1964 relative to the total period of insured exposure. It follows that this situation is to be treated in the same way as a divisible disease case.
65.	In practical terms, as explained by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand in supplemental written submissions, as between CDL and CIH, any subrogated claim by CDL comprises only what Aviva has paid out in respect of lung cancer during the period of exposure for which CDL is insured: for example, if an employee was employed by CDL for the full 10 years which the Policy spanned, then, taking round figures, on the basis that CIH was a co-insured for the last 2 years of the period in question, the ratio for which CIH is entitled to indemnity (and which Aviva is precluded from recovering in CDL’s name as its subrogated insurer) would be 2/10ths; whereas if an employee was employed by CDL for, say, just 6 years, then, the ratio would be 2/6ths. 
Defence costs
66.	In relation to defence costs, the parties were not in agreement. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand explained that it is CIH’s case that Aviva is precluded from recovering defence costs which it has paid in relation to any ‘straddler’ cases irrespective of the disease at issue and whether the indemnity to CIH is full or proportionate. They submitted that this follows from what I had to say in the Preliminary Issues Judgment, as well as through the application of what they described as “the well-established principles” set out New Zealand Forest Products Ltd v New Zealand Insurance Co Ltd [1997] 1 WLR 1237 and Thornton Springer v NEM Ins. Co. Ltd [2000] Lloyd’s Rep IR 590, as well as in the IEGL case. As for the Preliminary Issues Judgment, reliance was again placed on the Preliminary Issues Judgment at [182] and [183]. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted that my conclusions as set out in those paragraphs preclude Aviva from bringing a subrogated claim in CDL’s name which includes a claim for costs incurred by or on behalf of CDL in relation to third party claims which were made against CDL and which would have been incurred by or on behalf of CIH had third party claims been made against CIH. Such costs are claimed from CIH by CDL (with Aviva as subrogated insurer) in two ways: under Clauses 2 and 5, and also under the 1978 Act and/or section 51(3) of the Senior Courts Act 1981 claim, in the case of the former on the basis that CIH is liable, or would have been liable, to CDL’s employees in respect of the “same damage” as CDL. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted that CIH has the benefit of insurance from Aviva, in the form of the Policy, in respect of any such liability to CDL. They relied for these purposes on the insuring clause being in the terms which I set out in the Preliminary Issues Judgment at [18], specifically on its reference to Aviva agreeing to “indemnify the Insured against liability at law for damages and claimant’s costs and expenses in respect of such injury or disease”. They also highlighted how the insuring clause goes on, immediately afterwards, to state as follows:
“The Company will in addition pay all costs and expenses incurred with its written consent”.
Their submission was that CIH is entitled to a full indemnity from Aviva in respect of all defence costs, and that the position is the same whether the defence costs are incurred by CIH because it is sued directly by a CDL employee who relies on the Chandler case or because CIH is under a liability to CDL to pay the defence costs which CDL has incurred. 
67.	In this regard, reliance was placed on certain passages in Colinvaux & Merkin at paragraph B-0927a when dealing with “Allocation between insured and uninsured claims”. This was in support of a submission that an insurance policy should be construed as covering all costs incurred in the defence of a claim which were reasonably related to the insured’s liability, even if that might overlap with matters which are not covered. It is convenient to set out these passages in full, not least because they deal with the New Zealand Forest Products and Thornton Springer cases, making it unnecessary to cite directly from those authorities: 
“The situation may arise in which the claim made by the third party is partly in respect of insured liabilities and partly in respect of uninsured liabilities. If allocation is called for, it takes place after the trial and not beforehand. Three separate issues arise here.
The first is where some of the claims made against the assured are covered by the policy and some are not. … In Structural Polymer Systems Ltd and Structural Polymer Technologies Ltd v Brown  it was assumed by both parties that costs are generally apportionable as between insured and uninsured losses, so that the insurer is liable for only that proportion of the costs represented by the proportion of loss which was insured. Thus, in the absence of express wording, there has to be an allocation, however difficult that may be, although allocation is not required if the assured can show that the overall costs were not increased by the need to defend the fraud element of the claim. In John Wyeth & Brothers Ltd v Cigna Insurance Co of Europe SA/NV, product liability insurance had been procured by the assured, and losses were incurred over a number of years. Not all of the claims were within the time periods covered by the insurance. The policy provided that the insurers were to pay ‘all costs and expenses of litigation’ incurred with their written consent. The Court of Appeal ruled that the insurers were liable for the full amount of the defence costs even though the amount expended might have incidentally assisted the assured in fighting claims which were uninsured. The insurers’ remedy in such a case was to seek contribution from other insurers who were on risk during the uninsured periods. In McCarthy v St Paul International Insurance Co Ltd a number of claims were made against the assured, some in respect of fraud and some in respect of insured perils. The insurers asserted that the cause of defence costs being incurred was both insured and excluded perils, and in line with the general rule that an exception always trumps an insuring clause if there are concurrent proximate causes, there was no liability for defence costs. The court’s response was that the claims were separable so that defence costs were payable in respect of the insured claims and, further, that to the extent that there were common costs the insurers were liable for them. The court noted that it might be possible to devise wording which produced a different result, e.g. if the policy covered $X defence costs in any one year, excluding defence costs caused directly or indirectly by fraud: such wording might have the effect of preventing recovery of any defence costs even if the claims in question were not referable to fraud. Such language is not found in practice. …
The second issue arises where there are both insured and uninsured defendants. … In New Zealand Forest Products Ltd v New Zealand Insurance Co Ltd the assured company had procured directors’ and officers’ liability cover. The assured and one of its directors were successfully sued in California in respect of the breach of a joint venture agreement which had been entered into by the director on behalf of the assured. There were a number of co-defendants in the Californian proceedings, who were associated to the assured but were not parties to the insurance cover. The same lawyers were used by all of the defendants, and the Privy Council was asked to determine whether the policy required the costs to be notionally allocated between the defendants with the insurer being liable only for its share. The Privy Council held that, in the absence of clear wording, the policy was to be construed as covering all of the costs incurred in the defence of the claim, even though this might benefit the other defendants, provided only that the costs were reasonably related to the assured’s director’s own liability. The decision was based on the wording before the court, which referred to ‘costs, charges and expenses … incurred in the defence of legal actions’, and the Privy Council’s interpretation was that in the absence of clear wording severability was not intended. It follows that there is to be apportionment of costs only if uninsured claims or claims against third parties are separable from those relating to insured claims: this was, as noted above, the assumption in Structural Polymer Systems v Brown. ….”.
Colinvaux & Merkin then go on to address the Thornton Springer case: 
“New Zealand Forest Products was applied in Thornton Springer v NEM Insurance Ltd. In that case defence costs were payable in respect of claims for insured perils whether or not the claims against the assured were successful. Claims were brought against two defendants, but the policy covered only the claims against one of them. The claims were ultimately dismissed. Colman J. held that the insurers were liable to meet the defence costs, and that it was not possible for insurers to reclaim any part the defence costs on the ground that the costs had been incurred for the mutual benefit of both defendants: if costs were incurred for a dual purpose, one of which was an insured purpose, the indemnity extended to the dual purpose work and was not to be apportioned. The trend in the US cases on this matter has been to adopt the ‘larger settlement’ rule, under which there is to be no allocation of defence costs between insured and uninsured defendants unless the settlement is larger as a result of the presence of the uninsured defendants, so that if liability is concurrent there is no apportionment. 
The third is where there are two or more insurers, each with a duty to defend. Ordinary contribution principles apply here. The court may order the insurers to share the defence costs equally, subject to a subsequent apportionment based on actual liability after the trial, and this remains the case even though one insurer asserts that it can be liable only for a small proportion of the loss.  This, however, is subject to express clauses, e.g. rateable proportion provisions.  Equally, if an insurer is on risk for only a limited period during which the losses occurred, the insurer only has to provide defence costs in the relevant proportion.  … .”
68.	Besides this, Miss Mulcahy QC, Mr Lynch and Mr Ouwehand placed particular reliance on John Wyeth & Brothers Ltd v Cigna Insurance Co of Europe SA/NV [2001] Lloyd’s Rep IR 420, submitting that the fact that this case did not concern employers’ liability insurance does not affect the analysis. The case involved a manufacturer (Wyeth) of the drug Benzodiazepine, which was prescribed for anxiety and insomnia, but was alleged to lead to severe intermittent physical symptoms and severe continuous psychological symptoms. About 11,000 claims were made against Wyeth and a group action was organised. It was agreed that nearly 40 per cent of the claims fell outside the period of any relevant insurance cover. The group action failed but Wyeth made virtually no recoveries of the costs incurred in the actions. Before 1972, Wyeth was uninsured with respect to UK liabilities. Between May 1972 and October 1977, local primary product liability cover for Wyeth was provided by a group of companies led by the Guardian Royal Exchange. From November 1977 to October 1980, the Guardian Royal Exchange policies were replaced by covers with Home Insurance Co Ltd (subsequently transferred to Cigna). The insuring clause in the Guardian Royal Exchange policies provided: 
“[Guardian Royal Exchange] will subject to … the conditions of this Policy indemnify the insured against all sums which the Insured becomes legally liable to pay as damages in respect of … bodily injury to any person … happening … during the Period of Insurance and caused by [pharmaceutical products] sold, supplied  . . .  in Great Britain … in connection with Wyeth’s business. [Guardian Royal Exchange] will also pay Legal Costs and Solicitors’ Fees.” 
The insuring clause in the Home Insurance Co Ltd policies provided that: 
“The Company will in addition in respect of a claim for compensation to which the Indemnity expressed in this Policy applies, indemnify the insured against: (a) all costs and expenses of litigation recovered by any claimant from the Insured and (b) all costs and expenses of litigation incurred with the written consent of the Company.” 
Waller LJ decided as follows at [53] to [56]: 
“53.	The only issue on the Home Policy that now remains relates to apportionment. As already indicated Cigna concede that Wyeth are entitled to recover costs which are reasonably related to the defence of a claim alleging that an injury, illness or disease occurred during the period of the Home policies. Wyeth concede in relation to these policies that if Cigna can demonstrate that the costs have been incurred in relation to a claim which is not covered by the Home policies, Cigna will not be liable for those costs.
54. 	Wyeth seek declaratory relief in relation to costs incurred which reasonably relate to claims alleging injury, illness or disease, but also reasonably relate to claims alleging a worsening of those injuries or illness or disease in uninsured years, or alleges a separate injury in uninsured years. Wyeth assert that provided the costs do reasonably relate to claims alleging injuries, illness or disease occurring within the period of the Home policies, they are entitled to recover the same, whereas Cigna argue that because the costs are bound to have been increased by virtue of the allegations of increased injury or further injury, the obligation on Cigna should be limited to paying only a portion of the costs.
55. 	We were not shown any practical examples of situations in which Cigna suggested that apportionment should take place, nor with any precision how it was suggested that the costs in such situations should in practice be apportioned. Furthermore, there is no evidence to support the assertion that costs, which on this hypothesis do reasonably relate to a claim falling within the policy period, must have been increased by the inclusion in the same pleading of allegations of injuries increasing over the years.
56. 	It seems to me that if the starting point is that the costs do reasonably relate to the defence of claims falling within the policy period, the contractual right of Wyeth is to be paid those costs. I do not see once that threshold has been reached that there is any room for saying that simply because the costs may also relate to an increase in the injury during some period outside the cover, the obligation on Cigna is cut down in some way. That is the view that the judge took. It is supported also by the Privy Council decision in New Zealand Products v New Zealand Insurance Company [1997] 1 WLR 1237.”
69.	It was submitted that these observations support CIH’s case that there should be no apportionment in a case where defence costs have been incurred outside the period after it had become a co-insured under the Policy as a result of the Endorsement. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted, correctly in my view, that it makes no difference, therefore, whether CIH’s liability to pay defence costs arises because CIH has been sued by CDL’s employees or because CIH has succeeded with a recoupment claim for defence costs which CDL has incurred. In the present case, it was submitted, regardless of whether it can be said that CIH’s liability would also have arisen during uninsured periods, CIH is still entitled to a full indemnity in respect of all defence costs by reason of the operation of the approach explained in the New Zealand Forest case. As Miss Mulcahy QC put it during the course of her oral submissions, “you look at it in terms of entitlement of CIH to indemnity under the Aviva policy”. It does not matter that in the present case CIH has not itself incurred defence costs, and so that the indemnity with which CIH’s argument is concerned is one which entails defence costs which have been incurred by CDL, or more likely Aviva given that CDL had been dissolved by the time that the employee claims came to be asserted, since all that matters is that Aviva is now seeking in these proceedings to recover those defence costs (the defence costs incurred by CDL or in CDL’s name) from CIH, a co-insured.
70.	That the position is as they described it, Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted, is confirmed by the IEGL case. In that case, the insuring clause provided as follows: 
“If any person under a contract of service or apprenticeship with the Insured shall sustain any bodily injury or disease caused during any period of insurance and arising out of and in the course of his employment by the Insured in the business above mentioned, the Company will indemnify the Insured against all sums for which the Insured shall be liable in respect of any claim for damages for such injury or disease settled or defended with the consent of the Company. The Company will in addition pay the claimants’ costs and expenses and be responsible for all costs and expenses incurred with the consent of the Company in defending any such claim for damages.”
Lord Mance stated as follows at [37]:
“As regards defence costs, IEG relies upon reasoning adopted by the Privy Council in New Zealand Forest Products Ltd v New Zealand Insurance Co Ltd [1997] 1 WLR 1237. There proceedings were instituted on the basis of five causes of action against a company and its director, whose costs were both covered by an insurance policy, and in the case of one of the causes of action against a third person not so covered. All the defendants were represented by the same lawyers. It was common ground that costs not relating in any way to the insured director’s defence would not be covered, while costs exclusively related to the insured director’s defence would be covered. The issue which arose was as to defence costs which related at one and the same time to the defence both of the claim against the insured director and of the claim against the uninsured third person. The courts below took the view that there should be an apportionment. The Privy Council reached a different view, as a matter, it said, of construction of the relevant insurance. This covered ‘all loss … which such officer has become legally obligated to pay on account of any claim made against him … for a wrongful act’. As this wording would cover the whole costs incurred in the defence where the insured officer was the sole defendant, the Board saw no reason why it should not cover them all, where some of them related also to the defence of an uninsured co-defendant. There was no question of the costs relating to any period other than that insured, and, importantly, they arose on a conventional causative basis – because of a claim against the director for a wrongful act.”
Lord Mance continued at [38]:
“Two points are notable in relation to the defence costs which IEG seeks to recover from Zurich. First, there is nothing to suggest that these would have been any less had the claim against IEG been confined to the six-year period covered by the Midland policies. Second, and more significantly, the defence costs which IEG incurred were ‘incurred with the consent of the Company in defending any such claim for damages’ within the meaning of the second sentence of the main insuring clause set out in para 13 above. That is, they were incurred by IEG in defending a claim by a former employee for damages for injury or disease which he was caused to sustain while employed during the periods of insurance provided by Midland. The claim against IEG could, under the special rule in Fairchild, be pursued on the basis that GGLCL had done no more than expose Mr Carré to a risk of suffering mesothelioma. In the light of Trigger the first sentence of the main insuring clause set out in para 13 above covers liability arising on this basis. But IEG’s liability for and right to recover defence costs does not arise under the special rule, or on the basis that Mr Carré was exposed to any risk. It is not recoverable under the first, but under the second sentence of the main insuring clause. Under the second sentence, it is recoverable on the conventional basis that IEG can prove that it incurred (as a matter of fact or probability) actual financial loss in the circumstances covered by that sentence. This distinction is important. Once it is shown that an insured has on a conventional basis incurred defence costs which are covered on the face of the policy wording, there is, as the New Zealand Forest case shows, no reason to construe the wording as requiring some diminution in the insured’s recovery, merely because the defence costs so incurred also benefitted some other uninsured defendant.”
This, it was pointed out by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand, was in relation to wording which directly linked the defence costs with the defence of “such claim for damages”. In the present case, there is no such requirement and, it was suggested, this means that the position is “even more straightforward than the answer in the IEGL case” because Aviva is in this case liable to pay “all costs and expenses”.  
71.	Although Mr Kent QC and Mr Evans-Tovey did not agree with these submissions, I am quite clear that they were well-founded. I reject, therefore, the suggestion made by Mr Kent QC and Mr Evans-Tovey that there is no bar to Aviva’s recovery (in the name of CDL) of the defence costs which were incurred by CDL and paid by Aviva as CDL’s insurer. In explaining why I have taken this view, I shall address various submissions which were made by Mr Kent QC and Mr Evans-Tovey in written submissions which were directed specifically to the issue of defence costs. 
72.	First, Mr Kent QC and Mr Evans-Tovey submitted that the authorities relied upon by CIH, specifically the New Zealand Forest case and the IEGL case, “do not answer this issue” because they are cases which were concerned with an insured’s own claim under a liability policy which provided cover in respect of defence costs and, in these circumstances, the argument was that the defence costs related in part to other matters which were not the subject of the indemnity provided by the insurance. In other words, they submitted, the issue in those cases was, in effect, whether CDL was able to recover its defence costs from Aviva under the Policy. That would also have been the issue, they acknowledged, were CIH seeking to recover under the Policy in relation to costs which CIH itself had incurred. Mr Kent QC and Mr Evans-Tovey submitted that it follows that the authorities were of no assistance in the present context where the issue is not the same but is whether CIH is able to resist a subrogated claim by Aviva (in CDL’s name) concerning defence costs incurred by CDL and paid by Aviva. I cannot agree with this submission. I fail to see that there is really anything in the distinction which it is suggested exists. As I see it, the matter may be tested by asking whether, had a claim been made directly against CIH by a CDL employee, Aviva would have been obliged under the Policy to meet the defence costs which were incurred by CIH in the same way as it appears Aviva met the defence costs which were incurred by CDL when claims were brought against CDL by its employees. If the answer is that Aviva would have been under a liability in respect of CIH’s defence costs, as I consider Aviva would have been, that is sufficient for CIH’s present argument to succeed since what matters is that the coverage provided by Aviva under the Policy was in this and other respects coterminous as between both insureds, CDL and CIH. 
73.	Secondly, I reject the related proposition advanced by Mr Kent QC and Mr Evans-Tovey, strictly as their fourth proposition, that there was no co-insurance as regards defence costs: there was co-insurance as much in relation to defence costs as in relation to any underlying liability to pay damages to the CDL employee who brings a claim. The same applies to the fifth objection which was raised, namely that because CIH has not incurred the defence costs which Aviva now seeks to recover, CIH itself not having been the recipient of claims by CDL employees, so any liability to indemnify CIH in respect of defence costs is entirely hypothetical and, as such, is to be disregarded when considering the arguments now advanced. This is not important: what matters is that Aviva is seeking to make CIH pay for the defence costs which CDL has incurred and which Aviva has paid, in circumstances where those are defence costs are of a type in respect of which CIH is entitled under the Policy to receive an indemnity from Aviva. The fact that the defence costs were not incurred with Aviva’s consent, as required by the relevant insuring wording in the Policy, is likewise of no consequence. Clearly since CIH has not incurred the defence costs, so Aviva cannot have given its consent to those costs being incurred by CIH. This, however, is not what is important: what is important is that the defence costs which Aviva is seeking to recover from CIH were incurred with Aviva’s consent, and were, indeed, paid by Aviva pursuant to its obligations to CDL under the Policy. The fact that those defence costs were incurred by CDL rather than by CIH does not stop those defence costs having been incurred with Aviva’s consent. As such, Aviva has had the benefit of the protection intended by the requirement that it should only be obliged to pay defence costs which it has agreed should be incurred, namely the ability to satisfy itself that costs proposed to be incurred are legitimate and appropriate. It would be fanciful to suggest that Aviva would have withheld its consent to CIH incurring the defence costs concerned had a particular CDL employee chosen not to pursue CDL but instead to assert its claim against CIH. The same applies to the situation which would have existed had the CDL employee made a claim against both CDL and CIH. In each case the same defence costs would have been incurred because the same work would have been required whether it was CDL which was facing the claim or whether it was CIH which was doing so.
74.	Thirdly, echoing his submissions in relation to the mesothelioma issue, Mr Kent QC submitted during oral argument that, insofar as the ‘no recovery’ principle is based upon the implied term analysis to which I have previously referred, it is appropriate to regard Aviva, notwithstanding the express subrogation clause, as having impliedly waived its subrogation right to recover from CIH (as CDL’s co-insured) only insofar as defence costs have been incurred in the period after the Endorsement was entered into and, as a result, CIH became a co-insured. He put the argument in this way:
“… we would say that if anybody had been the officious bystander saying, ‘Well, what do you mean by this endorsement?’ the parties would say, … ‘Oh, it’s prospective only … But if then the officious bystander said, ‘But I have a crystal ball, and there is going to be something called Fairchild, which isn’t going to be a problem, but there is then going to be something called the Compensation Act and you are going to find that it’s all very well talking about things being prospective, but what does that mean if somebody has a claim which straddles – which is based upon allegations both before and after?’ … The answer would have been, well, we are not giving up our right to use our express subrogation clause if it’s proper otherwise to use it in relation to all claims that might be made against us by CDL, in the future merely because such claims include reference to the period after the endorsement.”   
For reasons which I have previously given when dealing with the mesothelioma claims issue, I am not convinced that there is any real merit in this submission. I bear in mind again here what Lord Mance had to say in the Trigger case at [70]. 
75.	This brings me to a fourth point concerning the second and third of the arguments advanced in the further written submissions relied on by Mr Kent QC and Mr Evans-Tovey. These arguments, essentially, consisted of a contention that, although CIH was liable to reimburse CDL for its defence costs under Clauses 2 and 5, CIH was not otherwise liable to CDL in respect of such defence costs because the exclusion in the Policy concerning contractual only liability applies, with the result that Aviva is not under a relevant liability under the Policy to CIH.  In this context, Mr Kent QC and Mr Evans-Tovey submitted that CIH could not be liable under the 1978 Act for CDL’s defence costs because defence costs are not “the same damage” in respect of which CIH is also liable. They submitted also that Section 51(3) of the Senior Courts Act “would not assist in relation to settled claims because that is confined to costs of and incidental to proceedings in various courts”. On this basis, it was submitted, “but for the terms of the Sale Agreement, CIH are not liable to reimburse CDL for its defence costs”, and so CIH’s liability to reimburse CDL its defence costs is not a liability which comes within the ambit of the insurance afforded by the Policy, in view of the exception which states that Aviva is not liable in respect of “Liability which attaches by virtue of an agreement but which would not have attached in the absence of such agreement …” (see the Preliminary Issues Judgment at [18]).
76.	Miss Mulcahy QC did not disagree with Mr Kent QC’s position in relation to the 1978 Act. As to the 1981 Act, ultimately this was not an argument which Mr Kent QC felt able to maintain after Miss Mulcahy QC, Mr Lynch and Mr Ouwehand produced further written submissions on the issue. Mr Kent QC and Mr Evans-Tovey accepted, in the end, that section 51(3) applies to pre-action costs as well as costs incurred after proceedings have been commenced. As to this, Section 51(1) provides:
“(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in … (b) the High Court, … shall be in the discretion of the court.”
Sub-section (3) then states:
“(3) The court shall have full power to determine by whom and to what extent the costs are to be paid.”
77.	In Mouchel Ltd v Van Oord (UK) Ltd (No.2) [2011] EWHC 1516, [2011] PNLR 26, as Mr Kent QC explained, Ramsey J decided that the 1978 Act does not apply to anything other than costs which are payable to third parties (see [53]), and so that it does not apply to defence costs incurred by a party in CDL’s position. He went on to decline to order payment of costs under section 51(3) of the 1981 Act as a matter of discretion. In that case proceedings had been started against the party seeking costs under section 51(3) and so there was no difficulty as regards jurisdiction. Mr Kent QC very properly pointed out that in some cases (Mr Kent QC stated “many of the cases”) claim forms were issued against CDL. This means, Mr Kent QC accepted, that in such cases section 51(3) would be available and, furthermore, that this means that section 51(3) “becomes available against the world at large”. At [55], Ramsey J stated as follows, albeit in the context of a case where underlying proceedings had been commenced: 
“In cases where the third party proceedings consist of a claim which is passed through to the third party, then depending on the outcome of the third party proceedings, if the third party is liable to a defendant and the defendant is liable to the claimant then the third party may have a liability to pay the defendant's costs which would include costs which the defendant had incurred in defending the claim by the claimant.” 
In further written submissions submitted on CIH’s behalf, as supplemented orally by Mr Lynch, it was submitted that there is no indication in this passage that, in order to trigger the general discretion under section 51(3) in respect of costs claimed as part of a contribution claim, the costs incurred in dealing with the underlying claim must have been incurred after proceedings had been issued. 
78.	Also of some relevance is E.N.E. Kos v Petroleo Brasileiro S.A. (Petrobas) [2009] EWHC 1843 (Comm), [2010] 1 Lloyd’s Rep. 87, in which Andrew Smith J had the following to say concerning section 51(3) at [74]:
“Section 51 of the Supreme Court Act, 1981 provides that ‘the costs of and incidental to’ proceedings in the High Court are in the discretion of the Court and the Court has ‘full power’ to determine by whom and to what extent costs are to be paid. There is no statutory definition of the word ‘costs’ or the expression ‘costs of or incidental to’. The rules about costs in the CPR part 43 et seq apply to all costs that the court has power under the statute to determine be paid, and do not define or indicate what expenses constitute ‘costs of or incidental to’ proceedings, save that CPR 44.3(6)(d) expressly recognises that costs may be incurred before proceedings have begun. The essential question, therefore, is whether the expense of providing and maintaining the RBS guarantee is covered by the statutory expression ‘costs of or incidental to’ the proceedings within the meaning of section 51.” 
Andrew Smith J then went on to consider a number of authorities from the pre-CPR era, introducing that review with the following at [90]:
“As Megarry V-C pointed out in Re Gibson’s Settlement Trusts [1981] Ch 179, the costs ‘incidental to’ proceedings go beyond those ‘of’ the proceedings. I refer to four authorities of the Court of Appeal which provide some guidance as to the proper approach to the application of the expression and to deciding what may be recoverable as costs. They were decided before the introduction of the CPR, but, as Stanley Burnton J observed in Admiral Management Services Ltd. v Para-Protect Europe Ltd., [2002] EWCA 233 Ch at para 24, changes in the wording of the relevant costs rules subsequent to these decisions do not reflect a change of ‘principle or application’.”
He ended with reference to a case concerned with the CPR, which he addressed at [95]:
“This approach is reflected in the decision of HHJ Peter Coulson QC in McGlinn v Waltham Contractors Limited, [2005] EWHC 1419 (TCC), in which he decided that the expense of complying with a pre-action protocol in respect of claims which were brought in subsequent proceedings is by way of costs ‘incidental to’ those proceedings, but ‘save in exceptional cases, costs incurred by a Defendant at the stage of a Pre-Action Protocol, in dealing with and responding to issues that are subsequently dropped from the action when proceedings are commenced, cannot be costs “incidental to” those proceedings’ (at para 11).”
Mr Lynch submitted that, in the circumstances, pre-action costs can be recovered in a case such as the present by CDL against CIH under CPR 44.2(6)(d) (as CPR 44.3(6)(d) now has become), which provides that “The orders which the court may make under this rule include an order that a party must pay - … (d) costs incurred before proceedings have begun”, or “… costs … incidental to …” CDL’s claim against CIH. 
79.	Although I am somewhat doubtful that the Mouchel case is of much direct assistance as regards cases where underlying proceedings have not been commenced, I am, in any event, reluctant to adopt too restrictive an approach to the applicability of section 51(3) in a case such as the present. I agree with Mr Lynch when he submitted that the costs incurred by CDL in defending and investigating claims in a case where a claim has been intimated but proceedings have not been brought must be “incidental to” CDL’s claim against CIH in the present proceedings. I agree specifically that, when investigating and defending the underlying claims, CDL was necessarily conducting the same investigations and performing the same work (and, therefore, incurring, in effect, the same defence costs) as would have been necessary had proceedings been issued against CIH. These investigations would have included establishing whether or not the underlying claimant was, in fact, employed by the relevant entity, identifying the years of any relevant employment, looking into whether or not there had been exposure to asbestos, analysing the nature and extent of any injury, ascertaining whether CDL and/or CIH was culpable, and working out the quantum of the claims. If this is right, then, it seems to me that the same must apply irrespective of whether the investigatory work was carried out by CDL or by CIH, and so regardless of whether the defence costs were incurred by CDL or by CIH. Focusing, however, on CDL’s claim against CIH for defence costs, it follows that, as ultimately Mr Kent QC and Mr Evans-Tovey acknowledged, defence costs are recoverable, at least in principle, both under Clauses 2 and 5 and under section 51(3). It further follows that, as a result, the Exclusion in the Policy to which I have referred can have no application.    
80.	For all these reasons, I cannot accept that Mr Kent QC and Mr Evans-Tovey were right with their submission that the ‘no recovery’ principle concerning subrogated insurers has no application in the present case. 
81.	Nor do I accept their alternative submission that, even though defence costs may be indivisible in the sense that they cannot be allocated to any particular period of exposure, they should be treated in the same way as it is argued the recovery of Aviva’s outlay claim in respect of damages and (third party claimants’) costs in straddling mesothelioma cases should be treated. It seems to me that the same rationale in relation to defence costs applies to lung cancer and divisible diseases as it does for mesothelioma. In this respect, it is significant that, the 2006 Act not having been enacted in Guernsey, the Barker quantum rule was applied in the IEGL case as regards mesothelioma, so that IEGL was entitled only to a proportionate recovery from Zurich which reflected its own liability to its employee (Mr Carré) during the policy period. This meant that IEGL only recovered 6/27ths of the total damages and Mr Carré’s costs. However, significantly IEGL received its defence costs in full. Nor do I accept the further alternative submission advanced by Mr Kent QC and Mr Evans-Tovey that, if the subrogation bar has any impact at all, it should be “calibrated so that it operates so as to preclude recovery only of an appropriate apportionment”. Specifically, I reject the argument, again premised on the ‘no recovery’ principle being based upon an implied waiver analysis, that Aviva (and RPA before Aviva) impliedly waived its subrogation right to recover only an appropriate proportion of the defence costs concerned where defence costs relate, in part, to the period before the Endorsement was entered into. My reason is the same as that previously given. Similarly, I am unimpressed by the suggestion that insofar as the ‘no recovery’ principle is based on any principle of equity, it is appropriate to treat Aviva as being restrained from pursuing recovery of more than an appropriate proportion of the defence costs. It is quite clear from the authorities to which I have referred, including the IEGL case, that there is no justification for requiring any apportionment to be made. 
The Limitation Issue
82.	The third issue which I must address is the Limitation Issue, as to which there are two aspects: first, ascertainment of when the limitation periods applicable to CDL’s indemnity claims under the Sale Agreement started to run; and secondly, when such claims should be treated as having been made and so whether any of CDL’s claims in these proceedings are time-barred. I shall deal with these two aspects in turn. First, however, it is as well to make reference to two matters which are common ground between the parties. The first is that it is not in dispute that each claim by a CDL employee under the contractual indemnity gives rise to a separate cause of action (albeit advanced by a single party, CDL) and a new claim for the purposes of section 35 of the Limitation Act 1980 (the ‘1980 Act’). The second is that it is not controversial that a claim for a contractual indemnity is an action founded on simple contract, with the result that, under section 5 of the Limitation Act 1980, no such claim can be brought after the expiration of six years from the date on which the cause of action for that contractual indemnity accrued. 
Limitation: the applicable start dates
83.	The first issue requires separate consideration of the two contractual indemnity provisions in the Sale Agreement which are relied upon by CDL as against CIH. The first is Clause 2, which states: 
“As part of the consideration for the said sale the Purchaser [CIH] shall undertake pay satisfy and discharge all the debts liabilities and obligations (including all income tax and profits tax assessable by reference to profits up to the Time of Sale) of the Vendor [CDL] whatsoever subsisting at the Time of Sale and shall adopt perform and fulfil all contracts and engagements binding on the Vendor [CDL] at the Time of Sale  and shall at all times keep the Vendor [CDL] indemnified against the same and against all proceedings costs and demands in respect thereof.”
The second is Clause 5, which states:
“Until the completion of the sale the Vendor [CDL] shall carry on the business of the Vendor [CDL] as heretofore and shall in so doing be deemed to be the agent of the Purchaser [CIH] and shall account and be entitled to be indemnified accordingly”.  
It is not necessarily the case that the limitation periods in respect of these two provisions will be the same – although in the present case, whilst contending for polar opposite conclusions, each side submitted that it would be odd if there were a different start point for limitation purposes given the similarity in the language used in the two provisions. 
84.	CDL’s position is that the relevant start date in relation to CDL’s indemnity claims under Clauses 2 and 5 is when, in the case of each of the CDL employee claims against CDL, the liability of CDL to the particular employee was established, whether this was by means of a judgment, an arbitral award or a settlement (the ‘date of establishment or realisation’). According to CIH, this is not right and the correct start date is, instead, the date when a claim for damages or compensation was first made against CDL by each of the CDL employees who made a claim (the ‘date of the claim’). Neither side contended for the dates when CDL’s liability to its employees accrued as a matter of law (the ‘date of inception of liability’), nor for the dates when each of CDL’s employees received payment from CDL (the ‘date of payment’). 
The correct legal approach
85.	Both sides referred me to Telfair Shipping Corporation v Inersea Carriers SA (‘The Caroline P’) [1985] 1 WLR 553, in which Neill J (as he then was) explained at page 566G that, when considering a claim under an express indemnity, “the extent of the indemnity and the time at which the cause of action arises will depend on the construction of the contract”. Neill J then went on to speak in terms of there being a distinction between an indemnity against liabilities, on the one hand, and a general indemnity, on the other. However, in Firma C-Trade SA v Newcastle P&I Assn (‘The Fanti’) [1989] 1 Lloyd’s Rep 239 Bingham LJ (as he then was) at page 255 preferred to focus on what the indemnity provision meant as a matter of construction rather than on this type of distinction. Other authorities have adopted the same focus: see, for example, Aluflet S A Vinave Empresa De Navegacao Maritima LDA (‘The Faial’) [2000] 1 Lloyd’s Rep 473 per Rix J (as he then was) at page 478; and The Mayor and Commonalty and Citizens of the City of London v Reeves and Company Limited & ors [2000] BLR 211 per HHJ Hicks QC at [30]. The position is quite neatly described in a case before the Supreme Court of New South Wales – Equity Division, Paterson v Pongrass Group Operations Pty Ltd [2011] NSWSC 1588, where White J said this at [57]: 
“The proper construction of any contract of indemnity must depend upon the terms of the individual contract, considered, where appropriate, in the objective matrix of facts in which the contract was entered into. There can be no rule of law that a particular form of words is necessary in order to conclude that the indemnity is to prevent the indemnified party from suffering loss rather than to compensate the indemnified party for loss he or she has suffered. In every case the proper meaning of a contract of indemnity must be taken from the words the parties have used and the context in which the agreement is made in order to ascertain objectively their intention.”
This is the point which is also made in Chitty on Contracts (32nd Ed., 2015) at paragraph 28-049 under the heading “Indemnity Against Liability”: 
“Where a contract of indemnity is to indemnify a person against liability to a third party (e.g. under a liability insurance policy), the general modern rule is that the limitation period starts to run when the indemnifying party's liability is established by judgment, arbitration or binding settlement. However, that general rule is subject to the construction of the contract of indemnity. This may mean that the indemnifying party is liable as soon as the indemnified party is liable (that is, even before any establishing of that liability by, for example, judgment). At the other extreme, the contract may on its true construction provide that the indemnity is conditional on actual payment by the indemnified party in which case the cause of action will accrue only when such payment has been made.”
Therefore, although there is sometimes a tendency to generalise and so to seek to apply general rules, it is important to keep in mind that ultimately the question which needs to be answered is a question of construction. 
86.	In the circumstances, although I was referred to various authorities during the course of the submissions which were made by Miss Mulcahy QC on behalf of CIH and by Mr Evans-Tovey on CDL’s behalf, I am far from convinced that those authorities provide me with much assistance in answering the present question. It was nonetheless legitimate for Mr Evans-Tovey to point out that in none of the cases which were cited to me was it decided that the relevant start date was the date of the claim. It is also legitimate to observe that it would appear to be the case, as indeed acknowledged by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand themselves in their written submissions, when citing the passage from Chitty at paragraph 28-0049, that “when it comes to an indemnity against third party liability, the starting point is that this will not occur until that liability has been established”, and so the date of establishment or realisation. An example of such a case, appearing in the relevant footnote to paragraph 28-049, is The Caroline P which was concerned with the indemnity which is to be implied into clause 8 of the well-known New York Produce Exchange standard form charterparty. Another example is R & H Green & Silley Weir Ltd v British Railways Board (Note) [1985] 1 WLR 570, a decision of Dillon J (as he then was). There are only a limited number of cases in which it has been decided that the appropriate start date is the date of inception of liability. The only English and Welsh example of such a case to which I was taken is Bosma v Larsen [1966] 1 Lloyd’s Rep. 22, a case in which McNair J considered an indemnity which was in respect of “liabilities arising”. Another example is the Scottish case Scott Lithgow Ltd v Secretary of State for Defence (1989) SC (HL) 9, a case in which the indemnity was in respect of liability which was “suffered or incurred”. It does not appear that there are other cases where the date of inception has been treated as the appropriate ‘start date’. Lastly, there are also examples of cases where the relevant date has been treated as the date of payment: an example is The Fanti. 
87.	Before I come on to address Clauses 2 and 5 specifically, I need first to address certain particular points at this stage. The first concerns the approach which has been adopted to the Bosma case in subsequent authorities. The first of those cases is County and District Properties Ltd v C. Jenner & Son Ltd [1976] 2 Lloyd’s Rep. 728, in which Swanwick J felt unable to follow the decision taken by McNair J in the Bosma case at page 28, col. 1, as follows:
“It seems to me that the plain meaning of the expression to indemnify against ‘all liabilities’ is that it imposes the obligation to indemnify against the incurring of a liability, not the discharge of that liability by payment or the determination of that liability by judicial process. Indemnity against liability seems to me to be different from reimbursement against sums paid in pursuance of a legal liability. The shipowner is damnified as soon as he comes under a liability. The damnification contemplated by the Clause is the incurring of the liability not the payment.”
Swanwick J speculated at page 735, col. 2 in the County and District case that the Bosma case “can be distinguished on its special facts” and then said that “if not, I fear that I must differ from it”, before adding in a passage leading on to page 736, col. 1:
“After all, an indemnity against a breach, or an act, or an omission, can only be an indemnity against the harmful consequences that may flow from it, and I take the law to be that the indemnity does not give rise to a cause of action until those consequences are ascertained.” 
88.	This was followed by the R & H Green case, a case which, although decided in 1980, was not reported until 1985. Having referred to both the County and District case and the Bosma case, Dillon J stated as follows at pages 574G-575B:
“It is common ground that the view taken by McNair J. is not reconcilable with the view taken by Swanwick J. I have referred, to assist me in resolving this, to certain other authorities, and in particular Post Office v. Norwich Union Fire Insurance Society Ltd. [1967] 2 Q.B. 363. That case, as it seems to me, indicates that, where there is an insurance against liability to third parties, while there may be rights as soon as events happen which may lead to a claim being made, there is no enforceable liability to sue the insurers until the liability has been established and ascertained. I refer in particular to the judgment of Harman L.J. where he also refers to the earlier decision of Tomlin J. and the Court of Appeal in Hood’s Trustees v. Southern Union General Insurance Co. of Australasia Ltd. [1928] Ch. 793.
I think it follows from Swanwick J’s approach and the approach in Post Office v. Norwich Union Fire Insurance Society Ltd. [1967] 2 Q.B. 363 that, in the present case, time did not run against the defendant in favour of the first third party until the liability, if any, of the defendant to the plaintiff has been established and ascertained. The wording of clause 3 of the letter of agreement is very general: 
‘You will be responsible for, and release and indemnify the board from and against, all liability for loss or damage to property and any other loss, damage, costs and expenses which may arise.’
That, as I read it, is a general indemnity within the general rule as enunciated by Swanwick J.
Accordingly, on this preliminary issue, I prefer Swanwick J’s approach to McNair J's and I read the indemnity as being an indemnity not against liabilities arising so much as against the payment and determination of the liabilities. That leads to the consequence that the third party claim against Mr Kavanagh is not barred by the Act of 1939.”
89.	The R & H Green case was, in turn, followed by The Caroline P, in which Neill J stated as follows at page 566F-H:
“If the indemnity is an indemnity against liability, as it was held to be in Bosma v. Larsen [1966] 1 Lloyd's Rep. 22, the cause of action will come into existence when A incurs a liability to B. It may be that in certain circumstances a liability may be incurred for this purpose when the liability is still merely contingent: see Forster v. Outred & Co [1982] 1 W.L.R. 86. If, however, the indemnity is a general indemnity, as the relevant clause was held to be in R & H Green & Silley Weir Ltd v. British Railways Board (Note) [1985] 1 W.L.R. 570, then time will not begin to run against A for the purpose of pursuing his indemnity against C until A’s liability to B. has been established and ascertained: see below. One may notice in passing that, as the arbitrator pointed out in his reasons, McNair J. did not deal separately with the words ‘or consequences’ in the contractual indemnity in Bosma v. Larsen [1966] 1 Lloyd’s Rep. 22.”
The last sentence of this passage, perhaps, hints at Neill J thinking that McNair J’s decision in the Bosma case was, in any event, mistaken. Be that as it may, Neill J’s distinction between an indemnity against liabilities, on the one hand, and a general indemnity, on the other, attracted the following, in my view, fair comment by HHJ Hicks QC in Reeves case at [32]:
“I must confess to being unclear as to the force and effect of the word ‘general’ in this context, but in so far as it suggests a wide range of matters within the scope of the indemnity the clause here is in my view of that nature. Mr McLaren submits that the inclusion of the word ‘liability’ in the list is decisive, even if others also appear, but in my view that cannot be the test.”
HHJ Hicks QC then went on, entirely appropriately, to consider the wording of the particular indemnity in that case, saying this at [33]:
“The question being one of construction I consider it helpful, as a start, to look at the list of matters to be covered by the indemnity and the verbs which indicate how they arise in order to see whether they show any consistency, or at least preponderance, in one direction or the other. On that approach ‘loss’, ‘damages’ and ‘compensation’ all naturally fit with one or both of ‘suffer’ and ‘be obliged to pay’ and all these combinations look to the date of realisation. ‘Proceedings’ is not so obviously paired with either verb, but can clearly not be relevant until litigation has begun. That leaves ‘liability’ as the only word consistent with the date of inception, and it lacks the obviously appropriate verb ‘incur’. In my view the preponderance is heavily in favour of the date of realisation.” 
He concluded, in my view again accurately, by saying this about the Bosma case at [34]:
“The impression which I gain from the authorities as a whole is a general leaning in favour of the date of realisation, to the extent of an overall impression that Bosma v Larsen is relegated to the category of a ‘difficult’ exception to a general rule. …”.  
90.	The other matter which I should address at this juncture concerns CIH’s reliance on the Paterson case, specifically the suggestion made by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand that that case supports their central submission, to which I shall return, that the indemnity contained in Clauses 2 and 5 was a preventative indemnity which means that CDL was able to call upon CIH to perform the indemnity upon any failure to keep the indemnified harmless from liability rather than the date of the claim (as CIH contends). Leaving aside for present purposes the point, to which again I shall return, that the logical consequence of this submission is that the relevant start date should be the date of inception of liability, I am less than clear that the passages in White J’s judgment which are relied upon provide the support which was suggested. The first passage is at [59] where White J said this:
“A promise to prevent the indemnified party from having to pay his debt might be capable of being achieved by means other than paying the debt owed by the indemnified party to the creditor. The indemnifying party might have any number of lawful means of persuading the creditor not to press its claim”.
I struggle to see how this really assists the submission which was made. Nor does it seem to me that the other passage which is relied upon does so. This is at [74]:
“It has been said that a contract of indemnity is only enforceable at common law after the indemnified party has paid his creditor (eg Re Richardson; ex parte Governors of St Thomas's Hospital [1911] 2 KB 705 at 712). If the claim at law was on the common money count for money paid, (as in the case of contribution at common law between co-sureties) that was certainly so.  There is no reason in principle why it should be so on a claim for damages for breach of a contract of indemnity. A contract has the same meaning at law as in equity. If the contract was an indemnity to prevent the plaintiff suffering loss, as distinct from indemnifying the plaintiff against a loss paid, there is no reason in principle why substantial damages should not be payable in the event of a breach to put the plaintiff in the same position as if the contract had been performed. In BNP Paribas v Pacific Carriers Ltd [2005] NSWCA 72 at [112], Giles JA said:
‘… If BNP did not provide indemnity in accordance with its obligations, PCL could claim as damages the amount of the relevant loss. BNP was in breach of contract, and PCL was ‘so far as money can do it, to be placed in the same situation with respect to damages, as if the contract had been performed’ (Robinson v Harman (1848) 1 Ex 850 at 855 per Parke B; 154 ER 363 at 365). If PCL was yet to pay a claimant against it, and BNP's obligation was to relieve it from having to pay, it could obtain an order that BNP pay (McIntosh v Dalwood (No 4) (1930) 30 SR 415 at 418-9); and it could obtain a declaration of entitlement to indemnity (Post Office v Norwich Union Fire Insurance Society Ltd (1967) 2 QB 363 at 374).’”
White J then continued at [78] as follows:
“In Abigroup Ltd v Abignano the Full Court of the Federal Court observed (at 83) that:
‘It is well and long established in equity that a person entitled to an indemnity may obtain relief from the indemnifying party as soon as the person’s liability to the third person arises and before he has made payment himself, except where the contract otherwise provides or certain exceptional circumstances exist: see National Financial Co; Ex parte Oriental Commercial Bank (1868) LR 3 Ch App 791; Wooldridge v Norri (1868) LR 6 Eq 410; Wolmershausen v Gullic [1893] 2 Ch 514 and other cases conveniently collected in Halsbury's Laws of England, 4th ed, vol 20, para 315. The person may therefore, where appropriate, obtain an order to compel the person who has given the indemnity to set aside a fund from which liability may be met (Re Richardson; Ex parte Governors of St Thomas's Hospital [1911] 2 KB 705 per Cozens-Hardy MR at 709) or to pay the amount due directly to the third person (Ascherson v Tredegar Dry Dock and Wharf Co Ltd [1909] 2 Ch 401) or where the giver of the indemnity is under no liability to the third person, in some circumstances even to pay the amount to himself (ie the person entitled to the indemnity: Lacey v Hill, Crowley’s Claim (1874) LR 18 Eq 182 per Jessel MR at 191). But, as is noted correctly, in the passage mentioned above from Halsbury, the equitable right to enforce an indemnity does not constitute a debt (see the cases cited in Note 12 to para 315 of Halsbury which support the proposition for which they are cited).’”
91.	Nothing in what White J had to say in any of these passages supports the proposition which is advanced on CIH’s behalf. This is not altogether surprising since White J’s focus in the case before him was on a different issue, namely (as made clear from the opening words in [74]) whether, in order for the indemnity in that case to be called upon, it was necessary that the beneficiary of the indemnity should have already made a payment to the third party, or whether the indemnifying party was obliged to respond to the call to pay under the indemnity before such payment had been made. White J decided the latter on the basis that the relevant indemnity provided as follows:
“The Indemnifiers will indemnify, and pay to the Indemnified monies to compensate for, and be in respect of, any loss suffered by the Indemnified arising out of any claim connected to, or directly or indirectly related to, any act committed or omitted to be done by the Indemnified in his capacity as such a director, including such acts or omissions that are offences against any laws, including but limited to taxation laws.
For the purposes of this clause ‘loss’ includes, any amount payable in respect of a claim against the Indemnified, and includes but is not limited to damages, Judgments, settlements, interest, costs and defence costs, and includes any fines or penalties imposed by law, punitive, exemplary or aggravated or multiple damages, income tax, customs duties, excise duty, transaction duty, Goods and Services Tax, or any other State or Federal tax or duty.”
It was submitted before White J that, since “the definition of ‘loss’ as including any amount payable in respect of a claim against Mr Paterson … this showed that the indemnity was to relieve Mr Paterson from his liability without Mr Paterson first having to pay his debt” (see [61]). White J accepted this submission at [63] to [65], basing his decision on the dual aspect of the obligation to “indemnify, and pay to the Indemnified monies to compensate” (not merely therefore an obligation to pay what has already been paid) and on the definition of “loss” as “including an amount payable in respect of the claim and not merely an amount paid in respect of a claim”. 
92.	In sum, White J had nothing to say on the question which is before me, namely whether the relevant start date is the date of establishment or realisation (as CDL contends) or the date of the claim (as CIH contends). 
Clause 2
93.	Coming on, then, to consider the parties’ submissions concerning the appropriate construction to be afforded to Clause 2, it was the submission of Miss Mulcahy QC, Mr Lynch and Mr Ouwehand that it needs to be appreciated that the relevant indemnity arises in circumstances which are atypical. They submitted, in particular, that a typical scenario would consist of features such as the following: (i) there could be a considerable delay between the liability to a third party being incurred and the eventual establishment or ascertainment of such liability; (ii) the indemnifying party will not act to protect the indemnified party from the liability during that period; and (iii) it was for the indemnified party to expend time and resources in dealing with the third party and seeing the liability through to the point of establishment or ascertainment before pursuing its own claim against the indemnifying party. In contrast, in the present case, Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted, CDL and CIH were not at arms’ length since CDL was simply carrying on the business solely as the agent of CIH and in circumstances where its entire undertaking, assets and rights had passed to CIH under Clause 1 of the Sale Agreement. 
94.	In support of this submission, heavy reliance was placed on various parts of the Preliminary Issues Judgment, as follows:
(1)	Preliminary Issues Judgment, [48]: 
“Whereas Clause 1 transfers all the benefits of the subsidiary (CDL) to the parent company (CIH), Clause 2 is concerned with the burdens or what might be described as the ‘flip side’…”.
“the purpose of Clause 2 would obviously have been to transfer all liabilities, including potential liabilities that could only be described as contingent, as at the “Time of Sale”.
“To have left contingent liabilities as the responsibility of CDL after completion would have run quite counter to what was clearly intended to be achieved”.
(2)	Preliminary Issues Judgment, [49]: “this was the obvious intention of the parties…borne out by the width of the language used in Clause 2 as well as the structure of the provision which is consistent with the object being to embrace as much as possible”.
(3)	Preliminary Issues Judgment, [57] and [58]: such liabilities did not have to have accrued by the Time of Sale in order for them to fall within the compass of Clause 2, and they included “cases where, although a cause of action in tort has not yet accrued because damage had not yet occurred at the “Time of Sale”, some of the ingredients of the cause of action nonetheless did exist as at this point.  This would include employees claims in tort where the breach of duty occurred before 1 January 1964 even though damage came about later….The same applies to cases where the cause of action has accrued but the claim has not been crystallised by judgment or settlement, and where a cause of action exists and has been notified but the quantification of the claim is not possible or not known”.
(4)	Preliminary Issues Judgment, [60]: “…the commercial good sense which…lay behind Clause 2” was “that of drawing a line under CDL’s liabilities in circumstances where CIH was taking over the whole of CDL’s assets.”
(5)	Preliminary Issues Judgment, [68]: it was quite obvious that the words “against the same” in Clause 2 should be taken as applying to CIH’s undertaking to “discharge all the debts liabilities and obligations”.
(6)	Preliminary Issues Judgment, [93]: 
“…it is inherently unlikely to have been the parties’ intention to leave CDL, the subsidiary, with any liabilities which it could not pass on to its parent, CIH, bearing in mind that CIH was agreeing in the Sale Agreement to take over all of CDL’s ‘property, assets and rights’”.
“It needs, importantly, to be borne in mind that…this is not a case where CIH and CDL were unassociated; on the contrary…the Sale Agreement represented an arrangement between closely related entities”.
It was “implausible that the parties intended… to let liabilities of CDL (including to former employees) languish in CDL unsatisfied…”.
95.	Furthermore, Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted in their written submissions that:
“Regardless of what ultimately results from the establishment or ascertainment of the liability of CDL in terms of loss, damages or settlement, it would be CIH’s responsibility (directly or indirectly). There would therefore be no point in either CDL or CIH waiting. From CDL’s perspective, it was important that any liability it incurred be assumed by CIH under the indemnity as soon as it was identified (whether potential, contingent or actual).  As CDL’s parent, CIH shared this imperative but also because those liabilities could affect its enjoyment of the “undertaking, property, assets and rights” which it had acquired, particularly in light of CDL conducting the business until completion of the sale. Further, in the absence of claims control provisions in the agreement for indemnity, CIH would have wished to be able to take control of the claim and defend it as appropriate rather than risk default judgment being entered against CDL.”
They added that, commercially speaking, as CDL’s parent, CIH had the ability to investigate such liabilities as soon as they arose, intervene and prevent CDL from suffering loss before they were established or ascertained. For these reasons, Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted that the position is very different from the usual case where an indemnifying party seeks to protect itself by ensuring that there is certainty as to the incidence and quantification of the indemnified party’s liabilities to third parties before coming under a duty to discharge them. As such, they went on, the case is akin to the type of situation described by McNair J in the Bosma case at page 28, so as to mean that the obligation in Clause 2 is to be regarded as an “obligation to indemnify against the incurring of a liability, not the discharge of that liability by payment or the determination of that liability by judicial process” and, as such, is an obligation which was intended to become engaged at the earliest opportunity and ahead of establishment or ascertainment. The obligation, they further submitted, was an obligation on CIH’s part to hold CDL harmless; it was a preventative indemnity akin to that described by White J in the Paterson case at [59].
96.	Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted that what they described as “the triggers” upon which CIH’s obligations to CDL arise under Clause 2 in respect of any particular liability are, as they put it, “easy to discern”. They emphasised in this context that Clause 2 does not merely provide that the indemnity is “against the debts, liabilities and obligations” of CDL, but extends to “all proceedings costs and demands”. They suggested that this underlines the intention being that the entitlement to claim on the indemnity accrues, at the latest, on the earliest of the dates on which proceedings are issued, costs are incurred or a demand is made. This means, they submitted, that time starts running when a claim is first notified to CDL. They suggested that this is a reasonable and practical position, which makes commercial common sense since it is at that point that CDL will demand that CIH takes action. It also provides certainty because there is no lack of clarity as to what is the trigger. It makes no difference, they maintained, that the liability which triggers CIH’s obligations can be quantified at the time since in the Scott Lithgow case the House of Lords made it clear, when considering when an indemnity became enforceable under section 6 of the Prescription and Limitation (Scotland) Act 1973, that the fact that a claim could not be quantified until a later point in time did not mean that time had not started running for limitation purposes, Lord Keith stating as follows at page 22:
“… if the obligation to indemnify were to arise on the occurrence of the casualty, payment might have to be made or accepted on the basis of a rough or inadequate estimate of the loss. Quite apart from the fact that many claims of various kinds are assessed on the basis of estimates, there is no good reason why [the action should not be commenced within the limitation period] even if when that is done the amount of the claim cannot yet be precisely quantified.”
Accordingly, for the purposes of Clause 2, the relevant limitation period (which the parties were agreed was six years by virtue of section 5 of the Limitation Act 1980) started to run no later than the earliest of the dates upon which CDL either had proceedings served on it, incurred costs or received a demand in respect of such the third party’s claim.  
97.	I cannot accept these submissions. I see no legitimate basis for the conclusion urged upon me by CIH. On the contrary, it seems to me that it is a conclusion which is wholly at odds with the wording used in Clause 2. I say this for a number of reasons, which I set out below.
98.	Mr Kent QC and Mr Evans-Tovey argued that the words “shall undertake pay satisfy and discharge” show that there must be establishment or realisation before the obligation to indemnify arises because there can only be payment, satisfaction and discharge once a liability has been established or realised, it not being possible to pay, satisfy or discharge an unestablished or unrealised liability. Their primary submission was that the agreement to indemnify contained in the words “indemnified against the same” should be regarded as an agreement to indemnify in relation to the agreement to “undertake pay satisfy and discharge” rather than an agreement to indemnify in relation to the words which follow, namely “all the debts liabilities and obligations” (as well as the adoption, performance and fulfilment of “all contracts and engagements”). I reject that primary submission since I am clear that the agreement to indemnify must relate, and only relate, to “all the debts liabilities and obligations”, in other words the nouns listed earlier in Clause 2, and not also the obligation to “undertake pay satisfy and discharge”, which is to say the verbs. I agree with Miss Mulcahy QC that it makes little sense to have an indemnity against anything other than the happening of an event or a loss. However, I consider that the verbs (“undertake pay satisfy and discharge”) obviously inform the proper construction of the nouns (“all the debts liabilities and obligations”) and, as importantly, the meaning to be afforded to the indemnity “against the same”. The same applies to the later verbs (“adopt perform and fulfil”) and nouns (“all contracts and engagements”), but, focusing on the wording which matters for present purposes, “undertake pay satisfy and discharge” are words which indicate that, as far as the relevant indemnity is concerned, the nouns to which it relates (“all the debts liabilities and obligations”) entail a financial element. An indemnity, after all, is an obligation to pay money. It follows that, even if there is an obligation which is not financial included in the scope of the first limb of Clause 2, when it comes to construing the indemnity and how it relates back to the first limb, the focus must be on the financial aspects of that first limb. In that regard, the introductory language, consisting of the verbs, is instructive when considering the nouns to which the verbs relate. The fact that the word “liabilities” is accompanied by the word “debts” is also not without significance in this context. A debt cannot be paid, satisfied or discharged until its amount is known. Likewise, in my view, a liability cannot be paid, satisfied or discharged until its amount is known, and so it has been established or realised. The fact that a demand has been made for payment, satisfaction or discharge of a debt or liability, even if an amount has been identified by the claimant, does not necessarily mean that the debt or liability is payable. This will depend on whether the demand is legitimate. That cannot be known until there has been establishment or realisation. This is the point which was made by Bingham LJ in The Fanti at pages 255-256, admittedly in the context of a ‘pay to be repaid’ indemnity albeit that the relevant passage assumed the ineffectiveness of this as a prior payment condition, when he said this:
“… still assuming the ineffectiveness of the prior payment condition, the fact that the parties have agreed that the right of indemnity shall be conditional on payment as well as liability is not irrelevant in deciding what the parties meant by liability, because payment involves proof (or agreement) of amount. Construing this contract, even without giving effect to the condition of payment, it seems to me inescapable that the parties must have intended establishment and ascertainment of liability to have been a pre-condition of the right to indemnity.”
I agree with Mr Evans-Tovey when he submitted that in a case where the relevant indemnity contemplates payment, as in the case of Clause 2 with its “undertake pay satisfy and discharge” wording, establishment or realisation is required in order for the right to be indemnified to be operative.  
99.	In addition, and importantly, it is evident even from an initial reading of Clause 2 that it was intended to be wide in its scope. The language is broad. In these circumstances, I consider it unlikely that the right approach is to regard the indemnity “against the same” as entailing the type of preventative indemnity suggested by Miss Mulcahy QC. The width of the indemnity suggests that it was not intended to be restricted to an agreement by CIH to prevent liability arising on CDL’s part in the first place. Although, for reasons which I have explained, I am not convinced that the description of a ‘general indemnity’ used by Neill J in The Caroline P is entirely appropriate, nonetheless this is an indemnity which is of a very general nature and, as such, it is all the more unlikely that it should be regarded as coming within the more limited category which CIH’s case entails.
100.	This last point is supported by the fact that, in contrast to the Bosma case where the indemnity was “against all consequences or liabilities arising…”, Clause 2 does not use the language of “arising”. Even if Clause 2 did use such language, however, this would still not support the argument advanced by CIH since, as in the Bosma case, “arising” points towards the date of inception, rather than the date of the claim, as being the appropriate starting point. McNair J himself made this distinction at page 28, col. 1 in the passage to which I have previously referred. There, he contrasted an indemnity “against the incurring of a liability” with an indemnity against “the discharge of that liability by payment or the determination of that liability by judicial process”. It was pointed out by Miss Mulcahy QC that the words “discharge of that liability” are a reference to discharge by the indemnified party. That would appear to be right, but it misses the point: McNair J was referring to the indemnifier’s obligation to indemnify in respect of the incurring of liability by the indemnified party, rather than its discharge by payment or its establishment/realisation. He was certainly not dealing with the possibility that the appropriate start date in the case before him was the date of the claim. That, however, is the argument which was advanced before me by CIH.
101.	Adopting the approach taken by HHJ Hicks QC in the Reeves case, I am clear that as regards Clause 2 the preponderance is heavily in favour of CIH being obliged to indemnify CDL in respect of liabilities which have been established or realised. It is right to acknowledge that in the Reeves case the indemnity covered “any direct loss damages proceedings compensation or liability which the [City] shall suffer will be obliged to pay”, and so different wording to that used in Clause 2, specifically wording which perhaps more expressly referred to payment. However, this is where the words in Clause 2, “undertake pay satisfy and discharge”, have the significance to which I have previously referred since they underline the fact that the “debts liabilities and obligations” to which the indemnity relates, at least when construed in the context of the obligation to indemnify, must entail the establishment or realisation of a monetary amount.
102.	The approach which I favour is consistent also with the scheme of Clause 2, which is that the first of the obligations identified in limb one is an obligation to “undertake pay satisfy and discharge” and the obligation to indemnify “against the same” is a further obligation. I regard this as an indication that the obligation to indemnify is one which complements the primary obligation and is secondary to that obligation. As such, it is an obligation which can only be performed after there has been establishment or realisation because, until this has happened, it cannot be known what the debts and liabilities are to which it relates. Given the secondary nature of the obligation to indemnify, this confirms that it is an obligation which can itself only come into play after establishment or realisation.
103.	As between the date of inception and realisation/establishment, therefore, I am satisfied that it is the latter which is clearly to be preferred as the applicable start date in the case of Clause 2. The question is whether a different view is warranted by reference to the closing words of Clause 2, namely “and against all proceedings costs and demands in respect thereof”. Miss Mulcahy QC argued that these words point strongly towards a different result: to the date of the claim being the appropriate start date. Indeed, it is fair to say that these words were at the heart of the case advanced in relation to Clause 2 on CIH’s behalf. I cannot accept this submission. It is clear to me that the words relied upon have nothing to do with the obligation to indemnify which immediately precedes them, namely the obligation “to indemnify against the same”. That indemnity quite obviously relates to what has gone before in Clause 2, not to what follows. It makes no sense at all to view that indemnity as applying also to what follows, as they are quite clearly separate indemnities, something confirmed by the use of the word “and” between the words “against the same” and the words “against all proceedings costs and demands”. I am not persuaded that it is appropriate to take the view that the wording of the second indemnity provides any assistance at all when trying to ascertain the point at which the first indemnity comes into play. There is nothing to indicate in Clause 2 that it should do so. The truth is that it is a separate indemnity covering something quite different. There is, in the circumstances, no reason for it to be regarded as having anything to say about when the obligation to indemnify “against the same” operates. It follows that I reject CIH’s argument that the reference to “against all proceedings costs and demands” has the significance suggested by Miss Mulcahy QC. Nonetheless, I accept that, if the reference did have the significance suggested, then, it would be the date of the demand (the date of the claim) which would be the appropriate start date since generally proceedings will be preceded by a demand. Such an approach is consistent with Reeves v Butcher [1891] 2 QB 509 where Lindley LJ said this at page 511: 
“This expression, ‘cause of action’, has been repeatedly the subject of decision, and it has been held … that the cause of action arises at the time when the debt could first been recovered by action. The right to bring an action may arise in various events; but it is always been held that the statute runs from the earliest time at which an action could be brought.”
104.	As regards the suggestion made by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand that the present case is atypical, I am not at all sure that I accept that this is an accurate characterisation. Indemnities can arise in a variety of different factual circumstances. It does not seem to me that it is helpful to suggest that some such circumstances arise more frequently than others. In any event, I am doubtful that the situation in the present case is, in any sense, unusual. On the contrary, I would have thought that agreements to indemnify are entirely typical where one business takes over another. Some such indemnities will involve arms’ length relationships, whilst others will not. Some will involve agency relationships going forwards; others will not. Some will entail liabilities arising long into the future; others will not. I reject the suggestion, in these circumstances, that there is any norm. I do not consider, therefore, that the parts of the Preliminary Issues Judgment which I have set out above, as relied upon by CIH, much assist in the present context. It is interesting in this regard to note that in the Paterson case White J derived support for the view which he reached concerning the construction of the indemnity by the context. He said this at [67]:
“The context supports this construction. If the indemnity only required PGO to compensate Mr Paterson for amounts he paid to the Commissioner, it would not achieve its intended purpose. The parties’ mutual concern, a matter of objective fact, was that Mr Paterson might be bankrupted by his exposure to the penalties. That concern would not be addressed if the indemnity applied only in respect of amounts Mr Paterson paid in respect of the penalties. To the knowledge of both parties he could not pay the amounts for which he was liable. His impecuniosity was the reason for his appointment as a director.”
105.	Importantly, however, in that case the relevant indemnity provision had additional wording, as previously explained, which meant that White J was able to construe the provision as he did. In the present case, there is no equivalent language and, as such, the context does not enable, and still less does it demand, a different construction of Clause 2 to the construction which I have decided is the right one. It is clear that it was not the context which, taken alone, led White J to the conclusion which he arrived at. That conclusion was founded on the language used in the indemnity provision which he had to construe – the point he made at [57]. I am not, for this reason, persuaded that I should accede to the submissions made on CIH’s behalf simply because the context is as it has been described by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand, even though that description rests, in part, on my own characterisation of the relationship in the Preliminary Issues Judgment. I have considered in this context a particular submission which was made by Miss Mulcahy QC concerning the closeness of the relationship between CDL and CIH as a result of their entry into the Sale Agreement. This is the point that, given the closeness of that relationship and the circumstances in which the Sale Agreement came about, it must have been intended by CDL and CIH that CIH would take over any third party claim made against CDL, and so this is consistent with the right to the indemnity under Clause 2 arising when the third party asserts the claim. Miss Mulcahy QC explained that this, allied with the absence of any claims co-operation clause in the context of Clause 2, militates in favour of the construction of Clause 2 favoured by CIH. I do not accept this submission. I remind myself of the principles applicable to the task of contractual construction, as set out in the Preliminary Issues Judgment at [5] to [15]. I bear in mind, in particular, however, that, as mentioned at [12], commercial common sense and surrounding circumstances should not be invoked to undervalue the importance of the language of the provision which is to be construed. In the present case, it seems to me that Clause 2 simply does not permit the construction urged upon me on CIH’s behalf. In the circumstances, reliance on the particular context highlighted by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand seems to me to have relatively limited resonance. 
106.	In short, on this issue I prefer the submissions which were made by Mr Kent QC and Mr Evans-Tovey. I need not, in the circumstances, base my decision on an additional point which was made by them. This was that Clause 2 should be viewed through the eyes of the law as it stood in 1964, and so having regard to how the legal position was described at that time in Halsbury's Laws of England, Simonds (3rd Ed.) as cited by McNair J in the Bosma case at page 26, col. 2, namely as follows: (i) Volume 24, Section 393: “. . . Upon a contract to indemnify, the statute runs from the time when the plaintiff is actually damnified, not from the time when the event happens which causes the loss. . .” ; and (ii) Volume 18, Section 982: “. . . At law an action on the contract of indemnity normally does not lie until the promisee has been actually damnified by paying the third party's claim. . . .”. However, I am not convinced that it is appropriate to place much, if any, weight on this consideration. I can see the logic of the submission which is made, but I am nonetheless wary of the submission. That wariness finds support from the following passage in the judgment of Arden LJ in Lymington Marina Ltd v MacNamara [2007] EWCA Civ 151 at [33]:
“In my judgment there can be no necessary implication that, where parties come to an agreement, that agreement must be interpreted on the basis of the law as it stood when the agreement was made as if it were in some time warp. It is part of the factual matrix known to both parties that both statute law and the common law develop over time. Developments in the common law apply retrospectively unless, exceptionally, the court makes an order for prospective overruling. … If the parties have been content to leave a matter to the general law, they must be taken to have agreed that their agreement should be interpreted in the light of the general law from time to time.”
This case is cited in Lewison, The Interpretation of Contracts (6th Ed., 2015) at paragraph 4.06 (pages 209-210) along with certain dicta from Lord Nicholls in BCCI v Ali [2002] 1 AC 251, but the view is stated that “in general the view expressed by Arden LJ is the better one”.    
107.	In the circumstances, as I have indicated, I do not base my decision on this further submission made by Mr Kent QC and Mr Evans-Tovey. In any event, it should be noted that Miss Mulcahy QC, Mr Lynch and Mr Ouwehand did not accept that the Halsbury’s extract set out in the Bosma case represented an exhaustive account of the legal position as at the time that the case was decided. They relied, in particular, on what McNair J went on to say ending at page 27, col. 2, highlighting how he expressed the view that the case cited in Halsbury’s in support of the propositions relied on by Mr Kent QC and Mr Evans-Tovey, Collinge v Heywood (1839) 9 A. & E. 633, did not lay down “any principle of general application”. They pointed out that McNair J also referred to a decision to the opposite effect, Spark v Heslop (1859) 1 E. & E. 563, noting that both that decision and the Collinge case turned on “the exact language” of the relevant undertaking. This confirms, to my mind, that it would be better not to accede to the further submission which was made by Mr Kent QC and Mr Evans-Tovey, but instead to focus on the particular wording of the indemnities with which the present case is concerned, namely Clauses 2 and 5.
Clause 5
108.	I can deal with Clause 5 more briefly because the main contention of each side was that Clause 5 should be construed in a manner, and with a result, which is harmonious with the construction afforded to Clause 2. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand relied in this context on what is stated in Lewison at paragraph 7.02 in a section dealing with the principle that: 
“In order to arrive at the true interpretation of a document, a clause must not be considered in isolation, but must be considered in the context of the whole of the document.”
They went on to submit that, given that Clause 2 and Clause 5 both provide for CDL to be indemnified in relation to liabilities arising out of its activities, albeit in respect of different periods of time, it is appropriate that the two indemnities should be regarded as having a similar scope. So, they suggested, the Clause 5 indemnity should (like its Clause 2 counterpart) be treated as arising when a claim is made and so as though (like Clause 2) it also referred to “proceedings costs and demands”. This is particularly so when one bears in mind that the agency in Clause 5 is expressed to be limited to the period “until completion of the sale” and throughout that time CDL is no less denuded of its assets and rights by reason of the sale. The submission of Mr Kent QC and Mr Evans-Tovey was to similar effect but designed to achieve the opposite result. They made the point, quite simply, that it would be odd if there were different ‘start dates’ in respect of the two indemnities. They reminded me that I myself made a similar point in the Preliminary Issues Judgment at [90] when dealing with the fact that Clauses 2 and 5 each use the language of indemnity.
109.	I agree with each side as to the likelihood that the time when the entitlement to be indemnified arises will be the same in relation to the two indemnities. It follows, in view of the decision which I have reached in relation to Clause 2, that I consider that the relevant time is not the time a claim is made but (as with Clause 2) when the claim has been established. I consider also that the appropriateness of this conclusion is supported by the width of the Clause 5 indemnity language (“entitled to be indemnified accordingly”). This is wording which, given its width, suggests an intention that much will be covered: essentially all of CDL’s activities qua agent. 
110.	I would only add that I am not persuaded by a submission advanced by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand to the effect that, since as an agent, as a matter of equity, CDL would have the benefit of what they described as “the well-established principle” that an agent is entitled to be indemnified against liability incurred by him on behalf of his principal and can enforce this indemnity before having to discharge that liability or suffer loss, it cannot have been intended that CDL would be put in any different position by virtue of Clause 5. In support of this submission, reference was made to the following passage in Bowstead & Reynolds on Agency (20th Ed., 2014) at paragraph 7-058:
“Where the agency agreement is contractual, the agreement to reimburse and indemnify in return for what has been requested, if not express, can be regarded as an implied term of the contract that operates unless clearly excluded. There is thus no difficulty in such cases in holding that the principal is liable to reimburse and indemnify the agent for all payments made and liabilities incurred within the agent's express or implied authority. This would include not only payments that the principal is legally bound to make, but also payments which the agent is legally bound to make though the principal would not be liable for them, cases where the agent is bound by the usage of a market, cases where the agent makes an authorised but gratuitous payment on the principal's behalf, cases where the agent makes a payment which could not have been enforced but which there is a strong and legitimate pressure to make, cases where the agent, though under a liability, has as yet suffered no loss, and cases where a payment is reasonably but mistakenly made by the agent. Cases where the agent acts beyond his instructions, or interferes without request, would not however be included.”
111.	Particular emphasis was placed on the reference to the agent, “though under a liability”, as not yet suffering a loss. Cited in support of this proposition is Lacey v Hill (1874) L.R. 18 Eq. 182. However, in that case, which involved a stockbroker seeking payment for the stock which he had purchased, as agent, on behalf of his principal, in response to an argument by the principal’s estate that payment was not due because the agent had not paid for the stock, Sir George Jessel MR held that the agent was entitled to be indemnified by the principal for price of the stock, for which the agent was liable to the seller, but which he had not in fact yet paid. He explained at pages 191 to 192, distinguishing between the position in equity and the position under the common law, as follows:
“… it is said this is a liability as distinguished from an actual payment, and that the agent or person entitled to be indemnified has no remedy. Whatever may be the case at law … it is quite plain that in this Court any one having a right to be indemnified has a right to have a sufficient sum set apart for that indemnity. It is not very material to consider whether he is entitled to have that sum paid to him, or whether it must be paid direct over to the creditor. … he is certainly in equity liable to indemnify, and liable to indemnify to the extent of the liability incurred by the agent on his behalf, and that is quite sufficient to substantiate this proof against this estate.”  
It is apparent from what is stated in this passage that the Lacey case is not authority for the proposition that an agent could, in equity, receive an indemnity in respect of a liability which has not been established. It is simply a case which was concerned with whether it was a bar to recovery that the agent had not made a payment, and so with the role of equity as regards the position at common law. I am, therefore, doubtful that the case really assists CIH’s submission in the manner suggested by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand. 
Conclusion
112.	For all these reasons, I conclude that in the case of both the Clause 2 indemnity and the Clause 5 indemnity the time when the entitlement arises is not the date of the claim but the date of establishment or realisation (whether by a judgment, an arbitral award or agreement).
Are any of CDL’s claims time-barred?
113.	I turn, then, to the second limitation aspect which I must determine. The issue which arises here is whether certain of the claims which have been brought against CIH by CDL are time-barred. The issue turns on whether CIH’s agreement to CDL amending its claim form after it was issued so as to introduce claims under Clauses 2 and 5 precludes CIH from now contending that certain of the claims are time-barred. I am satisfied that CIH is precluded from now asserting its time-bar case because CIH gave its consent to the amendments which are now said to be time-barred. I shall now explain why I take this view. 
114.	CDL originally issued its Claim Form on 11 May 2012. That Claim Form was restricted to CDL’s claim for contribution in respect of sums paid to a Mr John Montgomery and the Department of Work and Pensions. However, on 4 July 2012, CDL’s solicitors, Berrymans Lace Mawer LLP (‘BLM’), sent something described as a Letter of Claim to CIH notifying CIH of other claims for contribution against CIH in respect of Aviva’s outlay in respect of claims which had been brought against CDL and which had been settled. The letter listed 11 claims which had been settled in the last two years and 9 claims which were ongoing. The letter also asked for confirmation that CIH would agree to an extension to the limitation period for the purposes of a contribution claim (namely, as expressly stated, the 2-year period for bringing claims under the 1978 Act) until the judgment of the Supreme Court in the Chandler case was handed down and would not take issue with the late service of the Claim Form in the matter of Montgomery.
115.	In response, on 9 July 2012, CIH’s then solicitors, Greenwoods LLP, wrote as follows:
“…we note that you have issued proceedings in the case of Montgomery due to limitation.
In order to avoid proceedings unnecessarily, pending the determination of this matter, we propose that there be a waiver of limitation in relation to the specific cases mentioned under cover of your letter of 4 July 2012.”
The letter stated the waiver was for the purpose of those cases only (and not a general waiver of limitation rights) and was only on the basis that the claims referred to in the letter were not already beyond the two year limitation period applicable to claims under the 1978 Act.
116.	On 20 July 2012, BLM wrote to Greenwoods stating that the waiver of limitation related “to the named cases referred to in our letter dated 4 July 2012 and subsequent claims we notify to you” and referring also to three further ongoing claims in relation to which BLM stated: “we trust the waiver of limitation will also apply to these additional claims.”
117.	This was followed by an email from BLM to Greenwoods on 13 August 2012, stating:
“Although Cape plc have agreed to a waiver of limitation pending the appeal of Chandler v Cape plc [2012] EWCA Civ 525 to the Supreme Court this will not impact on the four month period for service of the claim form”.
The email attached a consent order requesting an extension of time for service of the Claim Form until 10 September 2013 (pending the outcome of the appeal to the Supreme Court). It also attached a schedule referring to 20 claims for contribution which had been notified to CIH, and the next day BLM sent through details of, and documents relevant to, the claims included in the Letter of the Claim (and other claims referred to in correspondence).
118.	On 20 August 2012, Greenwoods emailed BLM noting that permission to appeal to the Supreme Court had been refused in the Chandler case and so that permission could not be used as the basis for an extension of time. The email suggested, however, that CIH would agree to an extension of time for service of the Claim Form. Four days later, on 24 August 2012, BLM wrote to Greenwoods stating that, in view of the refusal of permission, “the extension to limitation previously agreed is not valid”. The same letter referred to 23 claims which had been notified in correspondence dated 4 July 2012 and 18 July 2012, and asked for agreement to extend time for a year: “in other words the period 24 August 2012 to 24 August 2013 will be excluded for any limitation calculation.  Such agreement can be terminated by either party on 21 days notice”.
119.	On 30 August 2012, Greenwoods sent a letter to BLM, in which they sought to clarify the position on limitation. They stated:
“In respect of any cases in which limitation had not expired by the 11 May 2012 which have been notified to our clients and contained in the schedule we are content to grant an extension of the limitation period and to extend time for service of the claim form. ...”.
The letter continued:
“As you have not at this stage formally served the claim form seeking contribution in the case of Montgomery, it seems to us that the most pragmatic solution to resolving this issue is for a schedule to be prepared annexed to the claim form initiating proceedings between Cape Distribution and Resilient Cape Holdings Plc.
We would suggest you serve us with a schedule at the point when a new claim requires to be considered, this will negate the necessity for issuing separate proceedings and provide clarity to both sides.”
120.	The Claim Form was then served on 7 September 2012. This was followed, in line with what Greenwoods had suggested, by service of a schedule setting out “claims notified to Cape” under cover of an email to Greenwoods on 13 September 2012. In that email BLM noted the parties’ agreement “to an extension of the limitation period in respect of cases previously notified to your client where limitation had not expired by 11 May 2012”.   
121.	The claim was then stayed by agreement for a period of 12 months. During the course of this stay period, BLM twice contacted Greenwoods, on 24 January 2013 and 26 April 2013, in relation to particular claims, referring to the parties’ agreement to extend the limitation period for claims which had been notified but “for completeness” mentioning that “limitation would normally have expired” in the cases identified on dates which were imminent and explaining that in all such cases “claims were notified to you for the purposes of the limitation extension in our letter dated 4 July 2012”. In short, care was being taken by BLM to safeguard the limitation position.
122.	As noted in a letter from BLM letter to CIH’s new solicitors, Nabarro LLP (‘Nabarro’) dated 19 September 2013, that stay expired on 7 September 2013. In that letter BLM noted that “a limitation agreement was entered into with your predecessors, Greenwoods solicitors and the claims listed in the schedule attached to our correspondence dated 10 September 2013, were incorporated into the same action (namely the claim of Montgomery)”, before continuing:
“For the sake of completeness, could you please confirm that you are willing for such an agreement to continue?”.    
123.	This prompted Nabarro to write to BLM on 14 October 2013, inviting BLM to agree to a stay until 30 January 2014 to try and “resolve matters amicably”. On 17 October 2013, however, CDL served its Particulars of Claim which, at that stage, like the Claim Form, dealt with CDL’s claim under the 1978 Act. Attached to this statement of case was a schedule dated 17 October 2013 which identified 17 “claims paid to date by Aviva”. These claims totalled £2,733,343.12, and the schedule stated:
“The Claimant reserves the right to amend this schedule at a later date.  Additional claims are in the process of being handled and will be added to the list once they have concluded.”
124.	This was followed, on 6 November 2013, by service of CIH’s Defence and Counterclaim. The latter consisted of a claim for contribution pursuant to the 1978 Act, CIH averring that the counterclaims for contribution had been set off against CDL’s claims by reason of rule 4.90 of the Insolvency Rules 1986 and/or by reason of an equitable set-off. 
125.	Subsequently, on 31 March 2014, CDL then served a Re-Amended Reply and Defence to Counterclaim, paragraph 12 of which stated:
“if and insofar as there is any right of set off as alleged, the Claimant would also have such a right to set off against the Counterclaim herein not only the claims pursued in this action (which are limited to claims made against the Claimant settled within two years of the commencement of this action) but also all claims by or in respect of former employees for asbestos related disease paid by or on behalf of the Claimant whenever such claims were settled or paid.  The Claimant attaches a short schedule to the Amended Reply, detailing a partial breakdown of the costs of past claims.”
The Schedule referred to in this statement of case was dated 26 March 2014 and referred to 84 claims which totalled £6,786,113.73. The Schedule, which did not provide dates on which the claims were notified or settled, stated that it contained “claim data from approximately 1997 onwards”; it was described as being “not exhaustive”.
126.	Several months after this, CDL having in the meantime discovered the Sale Agreement and noting the terms of Clauses 2 and 5, on 8 October 2014, CDL applied under CPR 17.1(2)(b) for “permission to amend its Claim Form and Particulars of Claim in the form attached to this application”. The application notice explained as follows:
“In accordance with Master McCloud’s Order dated 18 July 2014, the Claimant was provided with a copy of the disclosure ordered in parallel litigation to the current action, termed in the Order as the ‘Product Liability claim (HQ 14X02470)’.
As a result of this disclosure, it has been discovered by way of an Agreement of Sale dated 1 January 1964, that the Defendant (Cape Asbestos Company as it was then known) provided an indemnity to the Claimant.”
Clauses 2 and 5 were then set out, with the application notice continuing as follows:
“In light of the above, the Claimant avers they have the benefit of an indemnity provided by the Defendant in respect of all its liabilities and obligations subsisting prior to the time of sale and thereafter.
Accordingly, the Claimant respectfully requests that it be given leave to amend the Claim Form and Particulars of Claim and rely upon their Amended Claim Form and Particulars of Claim in the form attached to this application, in order that they can seek a contractual indemnity.
The Claimant avers that its application to amend is timeous and is a direct result of the recent disclosure provided by the Defendant.”
127.	I pause here to mention that Miss Mulcahy QC, Mr Lynch and Mr Ouwehand suggested that CDL was, or should have been, aware of the existence and dates of the Sale Agreement from a Scheme of Arrangement dated 15 March 2006, which states at page 159 that:
“On 1 January 1964 Cape Distribution Limited agreed to transfer its business and assets to its parent, Cape, on terms that pending completion it would carry on the business as before, in doing so it would be deemed to be the agent of Cape, and would hold its business and assets on trust for Cape.”      
Whether that is right or wrong seems to me, however, not to be material in circumstances where this was not a point taken in answer to CDL’s application to amend. It would have been open to CIH to have objected on the basis that what was stated about the Sale Agreement was incorrect or at least not complete. CIH did not do this and, as such, that is the end of the point as far as I am concerned. In any event, it should be noted that the extract relied on by CIH does not refer to CIH having given CDL indemnities, whether under Clauses 2 and 5 or at all. Accordingly, in my view, the essential point in the application notice that it had not been appreciated, so long after the time when the Sale Agreement was entered into, that CDL had the benefit of an indemnity seems to me to remain valid.
128.	As for the draft Amended Claim Form attached to the application notice, this was in the following terms (the underlining and crossing-out are original):
“The claimant seeks an indemnity or alternatively a contribution from the defendant in relation to the Claimant’s liability towards its former employees or their estates and dependants who have made claims against the Claimant for damages for asbestos related illness the sums paid to John Montgomery and the Department of Work and Pensions. The claimant also seeks interest on the sums. The claimant paid damages and costs in respect of a claim brought by John Montgomery for personal injuries, loss and expenses arising from his contracting mesothelioma. The Claimant will, as necessary, also seek indemnity under contract alternatively an order under section 51(3) of the Senior Courts Act 1981 in respect of its own costs and those of third parties which it has paid. The Claimant also seeks a Declaration that the Defendant is liable to indemnify alternatively to make contribution towards future liabilities of the Claimant (including its own costs related to the same) arising out of asbestos related illness attributable to tortious exposure to asbestos dust or fibre during employment by the Claimant between 1956 and the end of 1966.”
129.	As Mr Kent QC and Mr Evans-Tovey pointed out in their written submissions, CPR 17.1(2)(a) permits a party to amend a statement of case “with the written consent of all the other parties” as an alternative to the Court giving permission to amend under CPR 17.1(2)(b), and so CIH had a choice whether or not to give its consent or to require CDL to seek and obtain the permission of the Court to allow it to make the amendments sought. Had CIH decided not to give its consent, then, in addition to deciding whether it was appropriate to grant permission to amend as a matter of discretion, a three-stage test would have needed to be undertaken by the Court, as described by Tomlinson LJ in Mercer Ltd v Ballinger [2014] EWCA Civ 996 at [15]:
“i) Is it reasonably arguable that the opposed amendments are outside the applicable limitation period?
ii) If so, do they seek to add or substitute a new cause of action? 
iii) If so, does the new cause of action arise out of the same or substantially the same facts as are already in issue in the existing claim?”
130.	Underpinning this three-stage test is not only CPR 17.1(2)(b), but also CPR 17.3(2) which provides that:
“The power of the court to give permission under this rule is subject to -
…
(1)	 rule 17.4 (amendments of statement of case after the end of a relevant limitation period).”
CPR 17.4 is in these terms:
“(1) This rule applies where-
(a) 	a party applies to amend his statement of case in one of the ways mentioned in this rule; and
(b) 	a period of limitation has expired under-
(i) 	the Limitation Act 1980 …
(2) 	The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in these proceedings.”
131.	Underpinning, in turn, these provisions of the CPR are a number of provisions in the 1980 Act. Accordingly:
(1)	Section 35(2)(a) provides that any claim involving “the addition or substitution of a new cause of action” is a new claim. 
(2)	Section 35(3) provides that: 
“Except as provided by section 33 of this Act or by rules of court, neither the High Court nor any county court shall allow a new claim within subsection 1(b) above, other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Act which would affect a new action to enforce that claim … .”
(3)	Furthermore, section 35(4) provides that: 
“Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied… .”
(4)	Pursuant to section 35(5)(a), in the case of a claim involving a new cause of action, the Court may only allow the new claim: 
“if the new claim arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action.”
132.	Section 35(3) was described by Glidewell LJ in Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409 at 1423D as being: 
“A mandatory direction to a court dealing either with an application to amend a new claim or an application to strike out a new claim added without leave, by amendment… .”
As a result, the power of the Court to allow amendments which make new claims after the relevant limitation period has expired is restricted to cases where the new claim arises out of the same or substantially the same facts as the existing claim: as Colman J explained in BP Plc v AON Ltd [2006] Lloyd’s Rep. 549 at [50]-[55] and [63], there is no jurisdiction to allow amendments which introduce new claims in any other circumstances.
133.	I shall come back to the submissions which were made by Miss Mulcahy QC in relation to the application of these various provisions, specifically in relation to the “the same facts or substantially the same facts” test, when dealing with issue (ii). What matters for present purposes is simply that CIH had the option of whether to give its consent to the proposed amendments put forward in CDL’s application and whether, given that CIH decided to give its consent, it is now open to CIH to make the limitation objections which it does. This is what I will now consider. First, however, I should mention one other provision of the 1980 Act since it also has a bearing, an important bearing, on the present issue. This is Section 35(1)(b), which concerns the consequences of an amendment having been made and provides:  
 “For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced – … (b) in the case of a new claim not made in or by way of third party proceedings, on the same date as the original action.”
134.	Returning to the chronology, on 10 October 2014, two days after BLM’s letter sending the application notice, Nabarro wrote to BLM with reference to a CMC which was due to take place on 23 October 2014. In Nabarro’s letter dated 10 October 2014, express reference was made to CDL’s application and consent was given “provided your client agrees to the associated order for costs being the usual order that CDL be liable for the costs of and consequential on the amendment (including the costs of the application)”. 
135.	The fact that CIH had given its consent was then specifically mentioned in the skeleton argument which was submitted on CIH’s behalf for a directions hearing which took place before Mr Rhodri Davies QC (sitting as a Deputy High Court Judge) shortly afterwards, on 23 October 2014. Furthermore, CDL’s counsel prepared a Case Summary for the purposes of the CMC. This identified the issues which arise in relation to CDL’s claims against CIH. A number of issues specifically focused on the Sale Agreement, including at (1) the following: “the effect of the sale agreement of 1 January 1964 …”. This was followed, more significantly, by issue (8) which stated: “can CDL pursue claims under the sale agreement going back six years;”.
136.	It was also expressly confirmed during the hearing by Mr Fenwick QC on behalf of CIH that no objection was taken to the amendment application “on the usual terms”, as made clear from the following exchanges:
“MR KENT …….. The relevance of that then is that it would enable the claimant whom I represent to amend its particulars of claim. That has been done and there is no objection to our application for permission to amend and the amended particulars of claim are at tab 1, page 26 of our bundle. 
MR FENWICK: May I go to paragraph 2 which is the first one I am really concerned with. Essentially, the claimant wants to amend his case in order to plead reliance, in particular, on the agency agreement. I have no objection to that amendment being made subject to this caveat which it is important should be clear. I do not, in accepting that Aviva exercising their rights of subrogation by bringing a claim in the name of CDL which has been restored, they make that assertion and they are entitled to run on it. I do not accept that it is necessarily open to Aviva merely by the exercise of subrogated rights rather than the appointment of a liquidator who can of course do all such things as the company can, to bring claims not simply for 78 Act contribution against joint tort feesers [sic], but to rely on a separate contractual right which is a right of the company and which would not necessarily fall within the rights of subrogation because it is a right under an agreement. Quite a different tort agreement to interpret near some 50 years later.
…
THE DEPUTY JUDGE: If I understood that, Mr Fenwick, that is by way of a herald to the defence which you will probably file, but you are not objecting to the amendments.  
MR FENWICK: The reason I say it is because I do not want somebody to say that by agreeing that they can amend, I am accepting they have proper locus to bring the claim. 
THE DEPUTY JUDGE: Yes. 
MR FENWICK: It is important. There is quite a lot of shadow boxing in this case and in my submission it is important to make clear when one is taking a point so that others can respond to it, it is intended to be constructive rather than the reverse. I do not object to the amendment on the usual terms, nor do I object to the amendment to the Part 20 defendants’ statement of case. In other words, items 2.1, 2.2, 2.3, 2.4 are agreed. There will need to be a date for us to amend our defence.” 
Consistent with this, the order drawn up after the hearing stated as regards amendment:
“The Claimant and the Part 20 Defendant have permission to amend their statements of case in accordance with the drafts attached to their proposed directions …”
137.	In these circumstances, Mr Kent QC and Mr Evans-Tovey submitted that, CIH having elected not to object on grounds that one or more of the claims was time-barred, it is no longer open to CIH to rely upon section 35(5)(a) and complain at this late stage that the amendments should not have been permitted. CIH has, in effect, agreed not to take a limitation point, it was submitted, and that is a complete answer to the objections which are now made by CIH. 
138.	Miss Mulcahy QC, Mr Lynch and Mr Ouwehand did not agree with this. Their submission was that CIH cannot be taken to have given its consent to any amendment adding a new and otherwise time-barred claim in circumstances where CIH was unaware that CDL was including in its application additional claims which had not been notified to CIH previously as claims which CDL intended to pursue and which were time-barred. They submitted that CIH had not been provided with the information necessary to work out the limitation position in respect of the new claims at the time the application was made (when no schedules of individual claims accompanied the application). CIH must, they went on to submit, suffer the consequences of any lack of clarity in its application or imprecision in its pleading: see NEC Semi-Conductors Ltd v Revenue and Customs Commissioners [2006] EWCA Civ 25 per Mummery LJ at [131]. In this regard, Miss Mulcahy QC, Mr Lynch and Mr Ouwehand relied on the fact that neither the draft Amended Claim Form nor the draft Amended Particulars of Claim include any schedule listing the claims paid by Aviva. Crucially, they submitted, the schedules which were subsequently provided when the Amended Claim Form and Amended Particulars of Claim were served on CIH on 30 October 2014 were not included in the application which CDL made to amend and so in the application to which CIH gave its consent. Nor, they pointed out, was there any suggestion at the time of the application that CDL intended to include in its application any additional underlying claims paid by Aviva which had not been previously notified to CIH as claims that it intended to pursue. On the contrary, they suggested, CDL’s application stated that it was “intended to formalise the agreement between the Parties” by adding those individuals (other than Mr Montgomery) who had been notified to CIH but had not been added to the Claim Form. They highlighted also that, as CDL’s application was made pursuant to CPR 17.1(2)(b) rather than CPR 17.4 (which applies to amendments to statements of case after the end of a limitation period), the application did not suggest that limitation could be an issue. It was in these particular circumstances, so it was submitted, that on 10 October 2014 CIH indicated that it was prepared to consent to CDL’s application for permission to amend the Claim Form and Particulars of Claim. Accordingly, Miss Mulcahy QC explained during her oral submissions, the only consent which CIH should be regarded as having given was what she labelled ‘in principle’ consent to CDL bringing claims under Clauses 2 and 5, and so not consent to any particular claims being brought under Clauses 2 and 5. 
139.	I shall address these various arguments shortly, after first completing the chronology. This starts with the fact that a week after the CMC before Mr Davies QC, on 30 October 2014, BLM served CDL’s Amended Claim Form and Amended Particulars of Claim, as well as the “Claimant’s supporting schedules of loss”. Schedule A to the Particulars of Claim listed 114 “claims paid to date by Aviva (not including those claimed in the main action” (totalling £9,525,551.80) and Schedule B listed another 31 “claims paid to date by Aviva” (totalling £2,867,862.17). Miss Mulcahy QC, Mr Lynch and Mr Ouwehand highlighted how, although many of those claims had also appeared in the Schedule to the Re-Amended Reply which had been served in March 2014, paragraph 12 of the Re-Amended Reply still at that stage (and, indeed, until very recently) stated that the claims which were being advanced as independent claims in the action (as opposed to as claims brought by way of set-off and so operating only as a defence to CIH’s counterclaims) were limited to those settled within two years of the commencement of the action. Additionally, it was pointed out on CIH’s behalf that at the time that Schedules A and B were served on 30 October 2014 no details of the date of notification or date of settlement of those individual claims were provided in those Schedules. This meant, so Miss Mulcahy QC, Mr Lynch and Mr Ouwehand were at pains to explain, that CIH was unable to work out what the limitation position was in respect of the claims paid by Aviva. 
140.	Several months then passed, during which both sides were engaged with the process of disclosure. It was in relation to that topic that on 29 January 2015 Nabarro wrote to BLM to say this:
“Our client is entitled to understand the extent of the potential liability to which it is exposed by subrogated claims being pursued by Aviva …
Are the claims set out on schedules A and B the full extent of the claims that your clients intend to make, or do you anticipate adding additional claims? If further claims are to be added, we consider it to be necessary for there to be a formalised register of claims put before the Court and that provisions should be made for it to be regularly updated (subject of course to our client reserving all of its rights including those relating to limitation).
It appears that there may be a number of limitation issues that we will need to raise with you. To the extent that it is necessary to do so, we will write to you in due course to set them out. In the meantime, all of our client’s rights and arguments are reserved in their entirety.”
141.	This was followed by a further letter from Nabarro which was sent several weeks later on 10 April 2015. In this letter Nabarro wrote to BLM as follows:
“Please can you confirm by 17 April 2015 whether or not you have notified us of all the claims which CDL intends to bring against our client in the CDL claim which have been settled to date, and if not provide details of the same forthwith …
Going forward, it will be necessary for the position regarding new claims and their notification to be formalised as (a) we are unclear on what basis it is permissible for CDL to add claims and (b) we consider the approach taken so far to be neither adequate nor robust especially given the need for our client to review and understand the limitation position …
In this context, we are of the view that the content of schedules of CDL claims that you have provided to us to date are inadequate.  They should set out the date on which the claim was settled … the date when the claim was added to the claim form/notified to us and the periods of the underlying claimants’ employment with CDL …
In the meantime, all our client’s rights and arguments on the issue of notification and limitation are reserved in their entirety.”
142.	The following month, at a CMC on 21 May 2015, Walker J directed that a ‘CDL Claims Register’ should be set up by 2 July 2015, and then be subsequently maintained and updated. Paragraph 3(5)(c) of the relevant order required that the register should include details of “the date of the underlying judgment or settlement in respect of which CDL/the Part 20 Claimant seeks an indemnity/contribution from the Defendant/Part 20 Defendant”. In a note prepared for the hearing before Walker J by CDL’s counsel the following was made very clear:
“The amended Particulars of Claim now plead a primary case based upon a contractual indemnity under an Agreement for sale between CDL and CIH dated 1 January 1961 in reliance on clauses 2 and 5 of that agreement. The claims under the 1978 Act and the Senior Courts Act are now alternative claims. Declarations are sought in respect of the alleged right of indemnity under the Agreement for Sale in relation to future claims against CDL which Aviva Plc will have to satisfy.”
Furthermore, in a draft list of issues prepared on CIH’s behalf, in a section dealing with set-off, the following issue was identified: 
“If CIH is so entitled, is CDL entitled to set off against CIH’s counterclaim only claims settled within 2 years prior to the commencement of the action or all claims by or in respect of former employees for asbestos related disease whenever such claims were settled or paid?” 
143.	On 2 July 2015 the ‘CDL Claims Register’ was served, and this was followed by service of a further ‘CDL Claims Register’ on 9 September 2015.  Subsequently, on 25 November 2015 Nabarro wrote to BLM noting as follows: 
“… paragraph 27 of the Claimant’s Re-Amended Reply in the main CDL action dated 28 July 2015 indicates that the claims which are pursued in the CDL action are limited to claims made against CDL which settled within 2 years of the commencement of the action.  The main CDL action was commenced on 11 May 2012.  Schedule A, which sets out the Claimant’s primary claim, refers to information being used from as far back as 1997 and includes claims settled as long ago as 2002. Please clarify what limitation period you contend is applicable to these claims and whether you propose to make any amendments to Schedule A.”
This was, in effect, addressed in CDL’s and Aviva’s skeleton for the CMC which took place last December before me, where the following was stated:
“For the avoidance of doubt CDL accept that a claim for indemnity under the Agreement is statute barred if the underlying claim was settled more than 6 years before the action was started (and if more than 2 years if recourse to the 1978 Act is needed).  However, it remains CDL’s case that, if which is denied, there are rights of set-off in equity, no relevant limitation period applies to this equitable defence. It ought now to be sufficient for the parties to refer to the Register to see the claimed dates of settlement so that any issue about that may be raised in correspondence and proof required as appropriate.”
Miss Mulcahy QC, Mr Lynch and Mr Ouwehand suggested that, notwithstanding what was stated in this passage, it still remained unclear which claims were being pursued as claims (as opposed to being included for the purpose of set-off) and also whether those claims were being pursued pursuant to the contractual indemnities and/or the 1978 Act. They did not explain, however, why if there was perceived to be this uncertainty, they did not raise the point at the CMC or in correspondence at the time.
144.	In fact, it was not until several months later, after I had produced the Preliminary Issues Judgment and BLM had served an “updated Register of Claims” on 20 May 2016 that Nabarro raised the objections now before me. Specifically, in serving the further version of the register, BLM told Nabarro that they had “included only those claims which are ongoing or have settled within the relevant limitation period”. This register contained 36 claims with a value of £4.2 million and apparently applied a 2-year limitation period. On 23 May 2016, Nabarro queried whether this represented the totality of the claims being pursued. The next day, BLM explained that the previous register was merely an “extract” in respect of claims under the 1978 Act. A further “extract” was produced with two sheets attached: sheet 1 contained 68 claims with a value of £7.1 million, whilst sheet 2 contained 23 claims with a value of £2.4 million. BLM stated that “the attached Register represents the total amount pursued following the Preliminary Issues Trial”. Subsequently, on 26 May 2016, an “updated extract of the Register” was served with one sheet entitled “Settled post-May 2006”. It contained 70 claims with a value of £7.3 million. It was confirmed at a hearing which addressed consequential matters and which took place before me on 31 May 2016 that this constituted the totality of the claims now being pursued by CDL/Aviva. I gave permission to CDL to re-re-re-amend its Re-Re-Amended Reply and Defence to Counterclaim by way of an appendix to the existing pleading to particularise its case on limitation in relation to its claims under the Sale Agreement, such pleading to be served by 17 June 2016. On 14 June 2016 an updated ‘Register of Claims’ was provided which separated out CDL’s claims for indemnity (albeit these claims were described as claims for “contribution”) and those only relevant to the set off argument. There are now 66 claims in the former category totalling £7.08 million.
145.	This, then, is the context in which the submissions made by the parties concerning whether consent was given to the proposed amendments insofar as they were time-barred (or arguably time-barred) need to be considered. Miss Mulcahy QC explained that, although CIH’s position is that its consent should, strictly speaking, be regarded as only relating to CDL’s ‘in principle’ ability to claim under Clauses 2 and 5, nonetheless CIH was content that claims should be permitted to be advanced by CDL if they were in time (and so not time-barred) as at October 2014. Having considered the parties’ respective submissions, I have reached a clear view on the matter. I am satisfied that CIH is appropriately to be taken as having agreed in October 2014 to all the amendments which were contained in the statements of case which were subsequently served on 30 October 2014, including, therefore, claims which were time-barred (or arguably so) as well as claims which were not time-barred. I reject the suggestion that the consent given by CIH in Nabarro’s letter dated 10 October 2014 was merely an ‘in principle’ consent. It is wholly unrealistic to suppose that that was the position. An agreement in the abstract would have made no sense at all. As Miss Mulcahy QC herself emphasised repeatedly in her oral submissions, in these proceedings CDL is claiming an indemnity in relation to numerous underlying third party claims. The suggestion, in these circumstances, that CIH could really have thought that CDL was asking it to give its consent to amendments bringing in a cause of action under Clauses 2 and 5 yet without that cause of action linking to any underlying claims is fanciful. The position is no different when looked at objectively. The objective understanding must surely have been that the agreement given by CIH extended beyond CDL having an ‘in principle’ entitlement to assert claims under Clauses 2 and 5. This must all the more be the case in circumstances where, as again Miss Mulcahy QC emphasised, BLM had throughout been anxious to ensure that the limitation position was adequately safeguarded. The notion that, given that this was the case, CDL would merely be inviting CIH to agree on an ‘in principle’ basis is implausible to say the least. That would have been wholly inconsistent with the careful approach which had been adopted to date. I regard it as obvious, in the circumstances,  that, in giving its consent without seeing, or asking to see, the schedules referred to in paragraphs 19 and 21 or paragraphs a, d and e of the prayer, namely Schedules A and B, each of which was described as being attached, CIH should be regarded as appreciating that the amendments related to actual claims, and not something more abstract than that. The fact that CIH chose not to ask about the schedules suggests that CIH was simply not concerned about limitation. Why that might have been is a matter of speculation. It could be that, as Miss Mulcahy QC explained, at the time Nabarro were busy dealing with disclosure. It might be that CIH was simply not inclined to take a limitation point. These are matters about which it is possible only to speculate. What is nonetheless clear is that CIH gave its consent in circumstances where it must have been appreciated that a different limitation period (6 years) applies to a claim in contract under Clauses 2 and 5 when compared to the limitation period applicable to a claim under the 1978 Act (2 years). 
146.	I consider also that CIH must have known not only that CDL’s claims under Clauses 2 and 5 involved an extension to the existing claims under the 1978 Act, given the more generous applicable limitation period, but also given that the draft Amended Particulars of Claim expressly referred to two schedules (Schedules A and B) whereas the original Particulars of Claim referred only to one schedule. Clearly, therefore, CDL was putting forward claims which extended beyond the original schedule. Otherwise it would have made no sense for the draft Amended Particulars of Claim to do anything other than maintain the original reference to a single schedule. In this respect, I bear in mind that in the paragraph in the application notice coming before the passages from which I have earlier quoted, the following was stated:
“As per the Parties agreement (Exhibit ES1), a Claim Form was issued in the matter of Montgomery alone, in order to avoid initiating proceedings in a number of claims for contribution. The details of such additional claims were included in the Schedule appended to the Particulars of Claim (Exhibit ES2). Therefore those parts of the amendments of the Claimant’s statement of case, which extends the subject of this action to numerous employee claims settled by the Claimant (as opposed to solely the claim of Montgomery) is intended to formalise the agreement between the Parties.”
Exhibit ES2 was the schedule which listed 17 claims as at 17 October 2013. It was, therefore, not the same as Schedules A and B as served on 30 October 2014. As I see it, however, it would have been obvious to CIH that when the draft Amended Particulars of Claim referred to Schedules A and B, they must have been referring to different schedules since Exhibit ES2 is a single schedule and also because that schedule (as opposed to Schedules A and B) was separately mentioned earlier in the draft Amended Particulars of Claim in paragraph 14, which dealt with the original 1978 Act claim, whereas Schedules A and B were in paragraphs (19 and 20) which were concerned with the new case based on Clauses 2 and 5. It seems to me that CIH was on notice that there were different schedules which were being relied upon. This is not, therefore, a case where it can legitimately be suggested by CIH that it was under the impression that the same claims, and only the same claims, were being put forward in the context of the amended case which CDL was seeking to make. I do not, for the same reason, consider that this is a case like the NEC Semi-Conductors case where there is a lack of clarity which means that CDL should suffer the consequences suggested by CIH.  
147.	In the circumstances, I am clear that the fact that the schedules which came to be served on 30 October 2014 included additional claims is something about which CIH is in no position to complain. This is all the more the case given that, after being sent those schedules, CIH raised no complaint. CIH could have asked CDL what it thought that it was doing by adding further claims. CIH could have made it clear that it had not consented, and had not intended to consent, to the addition of claims which were not already in the schedule attached to the original Particulars of Claim. Indeed, CIH could have made an application under CPR 17.2, a provision which Miss Mulcahy QC submitted (and as I have accepted, as will appear) applies to cases where a party has given its consent to proposed amendments. CIH did not do this, which suggests that its consent in the lead-up to the CMC before Mr Davies QC was to the introduction of the additional claims. The fact that CIH made absolutely no complaint when Schedules A and B were served on 30 October 2014, and it was apparent that other claims were included over and above the 17 claims in the schedule attached to the original Particulars of Claim, confirms that CIH appreciated that other claims were to be included. 
148.	I ask myself whether it matters that, as Miss Mulcahy QC submitted, CIH did not know that certain of the claims included in Schedules A and B which had not been included in the original schedule were time-barred. I do not consider that it does. The fact, in particular, that CIH was not apparently provided with information concerning notification and settlement dates which would have enabled Nabarro to work out what the limitation position was in relation to individual claims, whether before the application to amend or in the application to amend or immediately after the application to amend when Schedules A and B were served, seems to me to be neither here nor there. It was always open to CIH to have asked CDL for that information, in the same way as CIH could have asked to see Schedules A and B when the draft Amended Particulars of Claim were sent to Nabarro as part of the application to amend. The fact that CIH did not ask for any of this information, but instead simply consented to the amendments being made cannot vitiate the consent which CIH gave. The impression I have is that, for whatever reason (Miss Mulcahy QC suggested that Nabarro simply had a lot of work to do) CIH did not think about limitation when the application was made. It was only much later, in January 2015, that limitation appears to have been considered by CIH, hence the reservation of rights set out in Nabarro’s letter to BLM dated 29 January 2015. Merely because a party does not give consideration to a point such as limitation cannot, however, entitle that party subsequently to go back on the consent which it has previously given.
149.	I also cannot accept the related suggestion made by Miss Mulcahy QC, during the course of her oral submissions, that the ‘in principle’ agreement which she maintained was all that CIH should be regarded as having entered into when consent, in the form of Nabarro’s letter to BLM dated 10 October 2014, was given to the application notice seeking permission to amend “does not carry with it a waiver of the defendant’s limitation rights insofar as CDL was purporting to pursue time-barred claims” because for there to have been such a waiver “it has to be unequivocal, unconditional”. In support of this submission, Miss Mulcahy QC took me to the decision of the Court of Appeal in Seechurn v ACE Insurance SA-NV [2002] 2 Lloyd’s Rep. 390. Particular reliance was placed on the following passage in the judgment of Ward LJ at [54]:
“… what the judge failed to consider, no doubt because his attention was not drawn to the need to do so, was whether or not there was a clear unequivocal promise or representation or common assumption, call it what you will, that the defendants would forgo their right to plead the Limitation Act 1980. I find nothing in the correspondence which justifies finding that there was any promise to that effect or anything at all like that effect. To say that the door was open to further negotiations or even to point out that the proceedings could be stayed pending medical examination, did not in my judgment, carry any implication that a limitation defence would not be taken. As Lord Steyn observed in Republic of India, there was no duty on the defendant’s solicitor to warn of this impending fall of the guillotine. Furthermore, as the authorities make clear, silence or inaction are of their nature equivocal. …”.
This was a very different case to the present case. A party which gives its consent to an application to amend is doing somewhat more than a party which merely writes the type of letter to which Ward LJ was referring. In the present case, CIH must have known that there was potential for limitation points to arise and, in those circumstances, I see no reason why its giving of consent without asking to see Schedules A and B should not be regarded as sufficiently unequivocal. This is not a case in which reliance is being placed on mere correspondence, still less correspondence at a pre-action stage designed of a “bluff or counter-bluff” character (Ward LJ’s description at [55]); this is a case in which CIH has given its consent in formal terms. Furthermore, it is not really, on analysis, a case involving the type of waiver which was under consideration in the Seechurn case, but is a case where CIH and CDL have entered into an agreement that CDL can amend. There is no basis which has been put forward based on mistake or misrepresentation which would justify the unravelling of that contract. This is understandable because it is not readily apparent how such a case could be made out.
150.	Nor am I impressed by the submission made by Miss Mulcahy QC, Mr Lynch and Mr Ouwehand that CDL ought to have made its application to amend not under CPR 17.1(2)(b), as mentioned in the application notice, but under CPR 17.4 since the latter applies to amendments after the end of a relevant limitation period. It is clear to me that an application to amend is properly made under CPR 17.1(2)(b) since that is the provision which states that, in the absence of consent from the opponent, permission is required from the Court. CPR 17.4 is merely the provision which states what test should be applied in the event that permission is sought from the Court. I accept that CDL could have addressed the test in its application. I cannot accept, however, that by not doing so, CIH’s submission based on the absence of reference to CPR 17.4 is especially compelling. This is because it was always open to CIH to ask CDL for whatever additional information concerning the proposed amendments it required in order to enable it to make a decision whether to give its consent or not. The fact that CIH instead simply gave its consent is sufficient to mean that it is now too late to advance the arguments which Miss Mulcahy QC, Mr Lynch and Mr Ouwehand put forward in this connection. I would add that this is not a case such as Busch v Stevens [1962] 1 All ER 412, as relied upon by Miss Mulcahy QC, in which the plaintiff was given leave to amend his statement of claim without the judge having been provided with any draft amended pleading. Lawton J decided that, in those circumstances, the order granting leave had been drawn up per incuriam and should be set aside. Miss Mulcahy QC submitted that similarly in the present case there was a deficiency in the application to amend. Specifically, she suggested that the Busch case supports her submission that CDL ought to have referred to CPR 17.4 in its application notice. I do not consider that it is anything of the sort. It is authority for the proposition that amendments should be before the judge when an application is made. That is not the same thing. 
151.	Additionally, in my view, it is not an answer for Miss Mulcahy QC, Mr Lynch and Mr Ouwehand to submit that CIH’s consent to the application to amend is consent which it was not open to CIH to give because the time-barred claims did not arise out of the same or similar facts to those originally pleaded, and as such the Court would have lacked jurisdiction to give permission under CPR 17.4. This is an argument which is misconceived. It is clear from CPR 17.1(2)(a) that either all parties give written consent or the permission of the Court is required. It is obvious that it is only in the latter scenario that CPR 17.4 comes into play. Nothing in section 35(5)(a) of the 1980 Act or CPR 17.4 itself suggests that the position is otherwise. Nor is there anything in CPR 17.1(2) saying that the parties cannot give their written consent to amendments which entail time-barred claims and, indeed, time-barred claims which do not meet the requirements of CRR 17.4. CPR 17.1(3) expressly carves out the case where the application to amend entails the removal, addition or substitution of a party. In those cases, an application must be made to the Court and consent of the parties is not sufficient. Had a similar carve-out been intended for time-barred claims, this would have been stated. Furthermore, the logic of CIH’s position is that the parties could never agree amendments which involve time-barred claims or claims which, although time-barred, meet the ‘same or substantially similar facts’ test. That cannot, however, be right because it would mean that there would always have to be a hearing and a determination by the Court as to whether the CPR 17.4 (2) test is met, which would lead to significant inefficiency and waste of costs. That cannot be what is required. 
152.	It would also be somewhat peculiar if written consent were not sufficient given that a limitation defence is one which a defendant must itself decide whether to raise. The 1980 Act does not extinguish or bar any cause of action and instead only operates as a bar to relief if reliance is placed on it by a defendant: see Nottingham Health Authority v Nottingham City Council [1988] 1 WLR 903 at page 906G-H per Balcombe LJ. If a defendant decides not to take the defence and if the cause of action is made out, then, the claim will succeed. This is consistent with the approach described by Tomlinson LJ in the Ballinger case. He referred at [26] to Chandra v Brooke North [2013] EWCA Civ 1559, [2014] TCLR 1 and to what Jackson LJ stated in that case at [65] to [67]:
“65.	If a claimant seeks to raise a new claim by amendment and the defendant objects that it is barred by limitation, the court must decide how to proceed. There are two options. First the court could deal with the matter as a conventional amendment application. Alternatively, the court could direct that the question of limitation be determined as a preliminary issue.
66. 	If, as is usually the case, the court adopts the first option, it will not descend into factual issues which are seriously in dispute. The court will limit itself to considering whether the defendant has a ‘reasonably arguable case on limitation’ …. If so, the court will refuse the claimant's application. If not, the court will have a discretion to allow the amendment if it sees fit in all the circumstances.
67. 	If the court refuses permission to amend, the claimant’s remedy will be to issue separate proceedings in respect of the new claim. The defendant can plead its limitation defence. The limitation issue will then be determined at trial and the defendant will not be prejudiced by the operation of relation back under section 35 (1) of the 1980 Act.”
This is an aspect to which I shall return, but for present purposes what matters is that Tomlinson LJ went on at [27] to say this:
“What that passage does not spell out is upon whom lies the burden of persuasion. Working from first principles however it is plain that, provided the defendant can show a prima facie defence of limitation, the burden must be on the claimant to show that the defence is not in fact reasonably arguable. The claimant is after all in effect inviting the court to make a summary determination that the defence of limitation is unavailable. If the availability of the defence of limitation depends upon the resolution of factual issues which are seriously in dispute, it cannot be determined summarily but must go to trial. Hence it can only be appropriate at the interlocutory stage to deprive a defendant of a prima facie defence of limitation if the claimant can demonstrate that the defence is not reasonably arguable.” 
As Mr Kent QC submitted in his oral reply submissions, this approach provides a workable solution, with a defendant under an obligation to raise any limitation point and thereby bring CPR 17.4(2) into play, whilst recognising that it is then for the claimant to persuade the Court that permission should be granted having regard to the relevant principles. 
153.	These considerations make it all the more unlikely that the Court would need always to be involved when a proposed amendment entails a claim which is time-barred or arguably so. In any event, had the application for permission to amend come before the Court in October 2014, in my view, it cannot be right to suggest that there would necessarily have been no jurisdiction to grant such permission. As far as the claims which were not time-barred are concerned, clearly there would have been jurisdiction to grant permission to amend. As to the claims which are said to have been time-barred, the question of jurisdiction turns on whether those claims “arise out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action” for the purposes of section 35(3) and section 35(5)(b) of the 1980 Act and CPR 17.4. Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted that the claims under Clauses 2 and 5 did not “arise out of the same facts or substantially the same facts as” the claims originally made in these proceedings, namely the 1978 Act claims. On this basis, they submitted that permission could not have been granted in October 2014. That seems to me to be right, but I do not consider that this is the end of the inquiry for reasons which I shall explain.
154.	As to this topic, the relevant principles are clear. The starting point is to establish what the new claim is. In this case, Mr Kent QC and Mr Evans-Tovey accepted that the contractual indemnity claims which CIH maintains are time-barred constitute new claims. In Smith v Henniker Major [2003] Ch 182 Robert Walker LJ (as he then was) following the approach of Millett LJ (as he then was) in Paragon Finance plc v DB Thakerar & Co [1991] 1 ALL ER 400, stating at [96] that “in identifying a new cause of action the bare minimum of essential facts abstracted from the original pleading is to be compared with the minimum as it would be constituted under the amended pleading.” Accordingly, determining whether or not there is a new cause of action (within the meaning of section 35(2)(a) of the Limitation Act 1980) requires a comparison between the essential factual basis of the new claim with the facts contained in the original pleading. As Longmore LJ put it in Berezovsky v Abramovich [2011] 1 WLR 2290 at [59]: “A cause of action is that combination of facts which gives rise to a legal right”. 
155.	Miss Mulcahy QC, Mr Lynch and Mr Ouwehand highlighted how in the Thakerar case Chadwick J (as he then was) noted that it would be “contrary to common sense” to hold that a claim based on allegations of negligence and incompetence on the part of the solicitor involved substantially the same facts as a claim based on allegations of fraud and dishonesty, and that Millett LJ endorsed those observations on appeal. Similarly, they submitted, it would be contrary to common sense to hold that a claim based on the Sale Agreement is based on substantially the same facts as a claim based on the 1978 Act. As they put it, another way of looking at matters is to say that the combination of facts which gives rise to the right to bring a claim based on the indemnities in the Sale Agreement is different from the combination of facts which gives rise to the right to bring a claim for contribution (which was not dependant on the Sale Agreement but instead relied on the Court of Appeal holding that CIH was a joint tortfeasor along with CDL in the Chandler case). A further instructive example, it was suggested, is provided by Hall v Meyrick [1957] 2 QB 455, a case in which a husband and wife sued their former solicitor, on the basis that the solicitor had been jointly retained by them to advise in making mutual wills. That claim was rejected but Ashworth J allowed the wife to amend her claim to allege there had been a separate retainer between her and the solicitor. The Court of Appeal allowed the appeal against Ashworth J’s decision, holding that permission to amend should not have been granted. The effect of the amendment was to allow the claimant to rely on a different contract (and therefore a different cause of action) from that which had previously been relied on, in circumstances where the relevant limitation period had expired. Hodson LJ explained the difficulty in that case at page 477 as being as follows:
“The effect of that amendment is to substitute the allegation that there was a separate retainer of the solicitor by the plaintiff as an alternative to the joint retainer which had originally been alleged. The point at once emerges that, if a separate contract is alleged between the plaintiff and the solicitor, that is an entirely new contract, a different contract from that which was originally pleaded, and, having regard to the lapse of time, the defence of the Statute of Limitations is, on the face of it, available to the defendant if he so chooses.”
156.	I am clear that Miss Mulcahy QC, Mr Lynch and Mr Ouwehand were right about the claims under Clauses 2 and 5 being new claims, and I have already stated that Mr Kent QC and Mr Evans-Tovey did not disagree. I agree also that the claims under Clauses 2 and 5 did not arise out of the same facts or substantially the same facts as the 1978 Act claims which were originally, and exclusively, put forward in these proceedings, since nowhere in the original Claim Form or Particulars of Claim was any mention made of the Sale Agreement. Nonetheless, this does not mean that an application, had it been before the Court in October 2014, would necessarily have failed. This is because the time-barred claims to which CIH now takes exception quite obviously arise out of the same facts or substantially the same facts as other claims under Clauses 2 and 5 which were not time-barred. 
157.	Miss Mulcahy QC ultimately accepted, whilst reserving CIH’s position in the event of any appeal, that it is appropriate in some circumstances (not, however, she submitted, in the circumstances of the present case) to ask whether disputed proposed amendments arise out of the same facts or substantially the same facts as other amendments in relation to which permission is given. This was the approach which was adopted by HHJ Hicks QC at first instance in the Welsh Development Agency case without criticism by the Court of Appeal in that case, Glidewell LJ referring to it at page 1416H as follows:
“He started by deciding that the correct approach was to assume that the amendments which he had already allowed to add the plea of breach of contract had been made. In this respect we are confident that he was correct, and indeed this is made clear by the fact that there has been no appeal in relation to his allowing the addition of the plea of breach of contract. Judge Hicks concluded, and again we agree, that ‘the cause of action is the same and accrued at the same time.’ It follows that it was his view that a claim in contract with regard to the 10 additional buildings was not ‘a new claim’ for the purposes of section 35.”
158.	It may at first blush be thought to be not wholly clear whether the approach adopted by HHJ Hicks QC (and endorsed by the Court of Appeal) was an approach which was focusing on section 35(2)(a) of the 1980 Act, and so whether there was a “new claim”, or whether what was being considered was whether the claim concerned arose out of the same or substantially the same facts as other claims for which permission to amend was given, so bringing section 35(5)(a) and CPR 17.4(2) (or its RSC equivalent) into play. It would appear that HHJ Hicks QC and the Court of Appeal considered that amendments which are allowed can be taken into account in both ways, since Glidewell LJ went on to refer (again with approval) to HHJ Hicks QC having concluded that  another proposed amendment (a claim in tort) met the ‘same or substantially similar facts’ test set out in RSC Ord. 20, r. 5(5) on the basis that “all the relevant facts had already been pleaded in the unamended statement of claim plus the amendment to add the breach of contract” (see page 1418A).   
159.	In subsequent cases, the Welsh Development Agency case appears to have been treated as though it included the latter approach. For example, in Secretary of State for Transport v Pell Frischmann Consultants Ltd [2006] EWHC 2909 (TCC), Jackson J (as he then was) cited the passages from the Welsh Development Agency case at [34], before going on at [38(v)] to refer to one of the propositions which he derived from the authorities which he had reviewed as being that:
“When carrying out the analysis required by section 35 of the 1980 Act and CPR r. 17.4, the judge must treat as part of the original claim those amendments which he has already decided to allow.”
160.	Similarly in Her Majesty’s Revenue & Customs v Noorasa Begum & ors [2010] EWHC 1799 (Ch) David Richards J (as he then was) said this at [37] in the context of discussion in relation to section 35(5)(a) and CPR 17.4(2) and so concerning the ‘same or substantially similar facts’ test: 
“A further point on which HMRC relies is that, in determining the questions under s.35 and CPR 17.4, it is entitled to take into account not only amendments already made, even outside the applicable limitation period, but also amendments which the court hearing the application will in any event allow. It was so held by the Court of Appeal in Welsh Development Agency v Redpath Dorman Long [1994] 1 WLR 1409 at 1416. Miss Newman accepted this proposition.”
161.	It is clear, therefore, that if in October 2014, had CDL’s application been dealt with at a hearing, the Court had allowed the amendments introducing claims under Clauses 2 and 5 which were not time-barred, it would then have been appropriate for the Court to have gone on to consider the ‘same or substantially similar facts’ test by reference to the amendments concerning those claims under Clauses 2 and 5, and not to confine itself to asking whether the test was satisfied having regard to CDL’s pre-existing claims under the 1978 Act. In these circumstances, it seems to me that the submission made by Miss Mulcahy QC that the Court would necessarily have lacked jurisdiction to allow the claims under Clauses 2 and 5 which were time-barred, or which were arguably time-barred, cannot be right. It is a different question whether, had there been a hearing, the Court would actually have granted permission in relation to the time-barred or arguably time-barred claims. It may well be that the Court would have decided not to do so, in which case, then, clearly and as decided by Colman J in BP plc v Aon Ltd [2006] 1 Lloyd’s Rep. 549 at [55], the Court would have had no jurisdiction to allow the amendments as a matter of discretion. I cannot conclude, however, that the Court would necessarily have taken this approach. On the contrary, in my view, it is quite likely that the Court would have considered, applying the approach approved in the Welsh Development Agency case, that the ‘same or substantially similar facts’ test was satisfied, and so that there was jurisdiction to grant permission to amend. It follows from this that I cannot accept that CIH is correct to say that, in the circumstances, it was not open to it to agree to the claims which were time-barred or which were arguably time-barred. More generally, if that submission were right, it would mean that in any case a defendant which has given its consent to amendments, even where there is no doubt at all as to what the amendments entailed, could later adopt the stance that that consent should be treated as though it had not been given on the basis that, had the application to amend gone to a hearing, the Court would, or even just might, have taken the view that the ‘same or substantially similar facts’ test had not been satisfied. This would make the orderly conduct of litigation, even the simplest litigation, wholly unworkable. 
162.	I should mention two other matters which were raised by Miss Mulcahy QC in this context, before coming on to deal with a further submission which was made by Mr Kent QC. These matters are related. First, Miss Mulcahy QC suggested that, had CIH appreciated that some of the claims in Schedules A and B were time-barred claims, CIH would not have given its consent to any of the claims, including, therefore, the claims which were not time-barred or arguably time-barred, with the result that it would not have been open to the Court, when considering the time-barred claims, to have regard to the similar claims under Clauses 2 and 5 which were not time-barred. The difficulty with this submission is, of course, that, had there been a hearing and had CIH not agreed to the claims which were not time-barred being introduced into the proceedings, the Court would need itself to have made a decision as to whether to allow the amendments relating to those claims. On the face of it, and subject to a second point which was raised by Miss Mulcahy QC, it seems to me that the Court would in all probability have allowed such amendments to be made. After all, even on Miss Mulcahy QC’s approach, CIH was agreeing to CDL being permitted to assert a cause of action ‘in principle’ under Clauses 2 and 5. Furthermore, as claims which were not time-barred, or even arguably so, it is not easy to see why permission should not have been granted. 
163.	Miss Mulcahy QC did not agree, hence the second point to which I have referred. She submitted that the right course for the Court to have adopted, in circumstances where the claims under Clauses 2 and 5 involved both claims which were time-barred (or arguably so) and which were not time-barred, would have been to decline to grant permission to amend across the board. For these purposes, Miss Mulcahy QC relied on the following further passage from Glidewell LJ’s judgment in the Welsh Development Agency case at pages 1420A-D:
“(viii) The approach of the court should differ according to the nature and effect of the proposed amendments. If the amendment adds a ‘new claim’ and the relevant limitation period expired between the date of the writ and the date of the amendment, section 35(1) will, after amendment, deprive the defendant of a limitation defence he would otherwise have had. In such a case the onus is on the plaintiff to show that he is within the statutory limits and to satisfy the conditions prescribed by the statute and the rules.
(ix) If, however, the amendment, though clearly adding a new claim, alleges that at the date of the amendment either the primary limitation period or the section 14A limitation period has not expired, the amendment should be allowed, unless it is so clear on the facts that the relevant limitation period has expired or that if a fresh action were brought it would be struck out under R.S.C., Ord. 18, r. 19 as being an abuse of process: see Ronex Properties Ltd. v. John Laing Construction Ltd. [1983] Q.B. 398 per  Donaldson L.J., at p. 405 and  per  Sir Sebag Shaw, at pp. 407–408.
(x) Where issues of both kinds arise or may arise, the court's approach should be that set out in paragraph (viii) above. Any injustice to the defendants by depriving them of a limitation defence they would otherwise have would thus be avoided, while the plaintiffs can commence a fresh action to which, if they are correct, limitation will not be a defence.”
It was with this guidance in mind that Jackson LJ stated as he did in the Chandra case at [65] to [67]. I do not, however, consider that this guidance assists Miss Mulcahy QC in the present case. This is because neither of the two scenarios described in (viii) and (ix) applies in relation to claims under Clauses 2 and 5 which, as Miss Mulcahy QC accepts and would have been obliged to accept had the matter come before the Court in October 2014, were not time-barred. The situation in (viii) is where the claim is time-barred and the question is whether section 35(5)(a) and CPR 17.4(2) can be satisfied. The situation in (ix) is where there is a dispute as to whether a claim is time-barred. Neither is the situation where there is no dispute that the claims are not time-barred. It follows that in relation to such claims the guidance does not apply. This is all the more the case given that Miss Mulcahy QC repeatedly stressed during the course of her oral submissions that it is necessary to consider the claims in this case as separate and distinct, by which she meant the underlying claims brought against CDL by its employees and in relation to which CDL seeks to be indemnified by CIH. In my view, this consideration weighs against Miss Mulcahy QC’s submission. 
164.	The last matter with which I should deal concerns a submission which was made by Mr Kent QC in relation to the Re-Amended Reply. This was that, since in very large measure the Schedules A and B which came to be served on CIH on 30 October 2014 simply mirror the claims which were listed in the schedule to the Re-Amended Reply and Defence to Counterclaim which had been served on 31 March 2014, so this is a case where it would have been open to CDL to have overcome the section 35(5)(a) and CPR 17.4(2) hurdles by pointing to the similarity between the proposed amendments sought to be made in October 2014 and the claims as listed in the schedule to the Re-Amended Reply and Defence to Counterclaim. Mr Kent QC submitted, in short, that the claims in Schedules A and B were, as he put it, “already in issue”. He suggested that it is immaterial that no reference was made to such claims being made under Clauses 2 and 5; indeed, as at 31 March 2014, the Sale Agreement had still to come to BLM’s attention and so the claims could not have been brought under Clauses 2 and 5. What matters, Mr Kent QC suggested, is simply that the claims in the schedule served on 31 March 2014 overlap with the claims set out in Schedules A and B, and so (albeit in the context of a set-off defence rather than as freestanding and independent claims) CIH was already facing the claims, including those to which it now takes exception because they are time-barred or arguably time-barred. 
165.	In this regard, Mr Kent QC placed reliance on Goode v Martin [2002] 1 WLR 1828, in which the Court of Appeal permitted a claimant to meet the CPR 17.4(2) test by pointing to the fact that the case which she sought to advance by way of amendment was a case which was founded on the defendant’s own version of events. Brooke LJ rejected the defendant’s contention that for the purposes of CPR 17.4(2) a claimant cannot do this since “the same facts as are already in issue on any claim” are not apt to embrace facts which are in issue on the defence to a claimant’s claim. He said this at [42]:
“I can detect no sound policy reason why the claimant should not add to her claim in the present action the alternative plea which she now proposes. No new facts are being introduced: she merely wants to say that if the defendant succeeds in establishing his version of the facts, she will still win because those facts, too, show that he was negligent and should pay her compensation.”
Although I do not doubt the correctness of this statement of the legal position, I am nonetheless doubtful that, on the facts of the present case, the submission made by Mr Kent QC should be accepted. I consider that there is a difference between a relatively simple case such as the Goode case and the much more complex type of case involved in these proceedings. The fact is that at the time that the Re-Amended Reply and Defence to Counterclaim was served there was no claim under Clauses 2 and 5. The only claim was under the 1978 Act. The case was a different case. The fact that the underlying claims were essentially the same as those listed in Schedules A and B does not, in my view, make it appropriate to conclude that the ‘same facts or substantially similar facts’ test is satisfied because the two different causes of action require different inquiries: whereas the claims under Clauses 2 and 5 entail no investigation as to CIH’s liability in respect of “the same damage”, that could not be said of the claims under the 1978 Act at least as they stood prior to the introduction of the claims under Clauses 2 and 5.  In these circumstances, I prefer not to base my decision on this submission as advanced by Mr Kent QC. 
CPR 17.2
166.	Lastly, I come on to address an issue which arose during the course of the hearing. This concerns CPR 17.2(1), which provides as follows:
“If a party has amended his statement of case where permission of the court was not required, the court may disallow the amendment.”
Although no application has to date been made by CIH under CPR 17.2, and clearly any application, were it to be made, would now be very substantially out of time given that the amendments with which the application would be concerned were made as long ago as October 2014, the parties were agreed that it would nonetheless be helpful were I to decide whether, as a matter of principle, CPR 17.2 applies to a case where written consent has been given to the relevant amendments under CPR 17.2(a). If CPR 17.2 does not apply to cases where consent has been given, then, if consent has been given, no application under CPR 17.2 can be made. In the present case, as I have explained, I have concluded that CIH gave its consent to the amendments. It follows that my conclusion in relation to this further issue is of potential significance for CIH.
167.	Miss Mulcahy QC, Mr Lynch and Mr Ouwehand submitted, quite simply, that the words “where permission of the court was not required” are apt to cover both amendments made pursuant to CPR 17.1(1) (amendments made prior to service) and CPR 17.1(2)(a) (amendments made with the written consent of the other parties) since both of these provisions relate to amendments where the permission of the Court is not required. They highlighted how the notes to the provision at 17.2.1 state in relevant part that “[a]n application under [CPR 17.2] is appropriate if the amendment challenged is one which, if permission to amend it had been necessary, that permission would not have been granted”. They went on, more significantly, to point out that the editors of the Green Book (The Civil Court Practice 2016) explicitly deal with the issue of consent, with the following being stated in the notes at page 519 as follows:
“Because CPR 17.2 applies to amendments even when made with the consent of the other parties, a party may apply to have the amendment set aside notwithstanding that he has previously consented to the amendment …”.
They submitted that both the wording of CPR 17.2(1) (considered in the light of CPR 17.1) and the relevant commentary in the Green Book support the view that a party who has consented to an amendment may apply pursuant to CPR 17.2 for the court to disallow that amendment. Although not directly on the ‘consent’ point, they observed also that the notes at page 518 describe one of the situations in which the Court may disallow an amendment pursuant to CPR 17.2 as being where “a cause of action - based on new facts - has been included outside the relevant limitation period (see CPR 17.4 for the addition of causes of action after the expiration of a relevant limitation period)”. 
168.	Mr Kent QC and Mr Evans-Tovey made submissions to the contrary. They examined the pre-CPR position, highlighting in particular that under the RSC amendments by consent were not addressed until the last rule in Ord. 20, namely r.12 which provided at (1) that “Notwithstanding the foregoing provisions of this Order any pleading in any cause or matter may, by written agreement between the parties, be amended at any stage of the proceedings”. The submission was made that this demonstrates that the ability to apply to the Court under the equivalent of CPR 17.2, namely Ord. 20, r. 4, was not available to a party which gave its consent to the relevant amendment. I prefer, however, not to express a concluded view in relation to that submission in circumstances where what matters for present purposes is CPR 17.2 and in circumstances also where the point which I must determine would appear not to have been addressed in the context of the RSC. As noted by May LJ in Godwin v Swindon BC [2002] 1 WLR 997 at [42], it is not “generally helpful to seek to interpret the Civil Procedure Rules by reference to the rules which they replaced and to cases decided under former rules”. In making this observation, May LJ referred back to an earlier case, Vinos v Marks & Spencer plc [2001] 3 All ER 784, in which he had stated as follows at [17]:
“Mr Lord, on behalf of the defendants, made written submissions and Mr Peirson made oral submissions by reference to what they submit the position would have been under the former Rules of the Supreme Court.  In my judgment, these submissions are not in point.  The Civil Procedure Rules are a new procedural code, and the question for this court in this case concerns the interpretation and application of the relevant provisions of the new procedural code as they stand untrammelled by weight of authority that accumulated under the former Rules … There is, in my judgment, no basis for supposing that rule 7.6 in particular was intended to replicate, or for that matter not to replicate, the provisions of former rules as they had been interpreted.”
169.	I focus, in the circumstances, instead on the submissions which Mr Kent QC and Mr Evans-Tovey made in relation to CPR 17.2 itself. As to this, besides what is stated in the notes in the White Book and in the Green Book, the only other commentary which is relevant, although it does not address the consent issue directly, is contained in Zuckerman on Civil Procedure: Principles of Practice (3rd Ed. 2013) at paragraphs 7.44 and 7.45, where this is stated:
“CPR 17 distinguishes between amendments that do not require the consent of the parties or court permission and amendments that are conditional on such consent or permission. A party may amend his statement of case at any time before it has been served on any other party (CPR l7.1(1)). The reason is obvious, before a statement of case has been communicated, the opponent has not had a chance to rely on it and therefore an amendment would in no way affect his position. Accordingly, a claimant may unilaterally amend the claim form and particulars of claim between the time of issue of and the time that these documents have been served on the defendant.  Similarly, a defendant may amend his defence between the time it was filed and the time that it was served on the claimant. It follows that there is only a narrow window for unilateral amendment of statements of case, which closes once the statement of case has been served on the relevant party.
However, the freedom to amend a statement of case prior to service is not absolute, since CPR 17.2 empowers the court to disallow even such amendment. It is difficult to imagine such a case other than those involving scurrilous or fraudulent allegations. Given that the discretion would only be exercised in an extreme case, one wonders whether CPR 17.2 is necessary seeing that the court has a general power under CPR 3.4(2)(b) to strike out a statement of case that ‘is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings’. An application under the latter provision has the added advantage that it is free of a time limit, whereas an application under CPR 17.2 has to be made within 14 days (CPR 17.2(2)).”
170.	Mr Kent QC and Mr Evans-Tovey relied on these passages as demonstrating that the focus is on the situation where an amendment has been made before service under CPR 17.1(1), and then the amended statement of case is served on the other party. They suggested that this shows that CPR 17.2 “provides a control on CPR 17.1(1)”. That is plainly right. It does not follow, however, that, as Mr Kent QC and Mr Evans-Tovey suggested, CPR 17.2 is confined to performing that role, with no application to CPR  17.1(2)(a) also. It is on that issue that the editors of the Green Book say what they say. The question for me is whether I agree with the view which they express, bearing in mind that no authority is there cited and bearing in mind that there would appear to be no authority which deals with the point. 
171.	At first blush it makes little sense for CPR 17.2 to apply to a case where consent has been given under CPR 17.1(2)(a). When consent has been given, the other party has had its opportunity to consider the proposed amendments. In contrast, therefore, to the situation in CPR 17.1(1), the other party already knows what the amendments are going to be. As a result, it may be thought to be unnecessary, and even undesirable, to permit that party to bring the matter before the Court under CPR 17.2.  The amending party has not unilaterally amended under CPR 17.1 but has instead obtained the other party’s consent. As Mr Kent QC and Mr Evans-Tovey submitted, in such circumstances, there would appear to be no good reason for CPR 17.2 extending to a case where consent has been given. Against these considerations, however, is the fact that CPR 17.2 nowhere states that it is confined to a CPR 17.1(1) case and has no application to a CPR 17.1(2)(a) case. It would have been very straightforward for this to have been stated had this been the intention. The fact that it has not been must be accorded some significance. Instead, CPR 17.2 simply refers to a party having “amended his statement of case where permission of the court was not required”. These are words which are wide enough, in their own terms, to apply not only to CPR 17.1(1) but also to CPR 17.1(2)(a) since the latter situation, where consent is given, is necessarily a case where the permission of the Court is not required. As a matter of language, therefore, it seems to me that CPR 17.2 is apt to cover the ‘consent’ case as well as the unilateral amendment case covered by CPR 17.1(1). I consider that, in these circumstances, and given also what is stated in the notes in the Green Book, the right conclusion in the present case is that CPR 17.2 applies to a case to which CPR 17.1(2)(a) applies. 
172.	I ask myself what type of case involving consent having been given might result in an application under CPR 17.2. My answer is that it would have to be a relatively rare case. However, I do not rule out a case, for example, where the amending party has misled the other party and obtained consent by those means. I can conceive that, in such a situation, even though it might well be that the other party would be able to allege vitiation of consent, that other party ought to be able to bring the matter before the Court in short order, hence the requirement that any application is made within 14 days, in order that matters can be put right without the other party having to establish vitiation on conventional grounds. There may be other situations where an application could also be made. Whether on the facts of the present case, where it is not suggested that CDL intentionally misled CIH but that CDL nonetheless did not provide CIH with Schedules A and B, if CIH had made an application under CPR 17.2 within 14 days, the application would have been successful is not a matter which it is appropriate that I should address at this juncture. Nor is the question of whether, were an application now to be made, a time extension would be available. These are matters which, in the event that CIH were to make an application under CPR 17.2, are for another day.  
Conclusion
173.	In conclusion, therefore, I decide as follows:
(1)	The 1978 Act Issue: in the light of the Preliminary Issues Judgment coupled with section 7(3)(a), CIH is precluded from claiming a contribution against CDL pursuant to section 1 of the 1978 Act in respect of CIH’s counterclaims which are based on CDL’s own negligence and joint liability in tort to the third party claimants who have claimed against CIH in respect of the “same damage”.
(2)	The Straddlers Issue: 
(a)	Mesothelioma claims: Aviva is precluded from bringing claims in CDL’s name for mesothelioma in full in ‘straddler’ cases where there is any material exposure on or after 25 November 1964;
(b)	Divisible disease (diffuse pleural thickening) claims: Aviva is precluded from recovering via a subrogated claim in CDL’s name that proportion of damages and claimant’s costs which relates to the period of exposure after 25 November 1964 relative to the total period of insured exposure; 
 (c)	Lung cancer claims: Aviva is precluded from recovering via a subrogated claim in CDL’s name damages and claimant’s costs in ‘straddler’ cases for that proportion of lung cancer claims which relates to the period of exposure after 25 November 1964 relative to the total period of insured exposure; 
(d)	Defence costs: Aviva is precluded from recovering via a subrogated claim in CDL’s name defence costs it has paid in relation to any ‘straddler’ cases irrespective of the disease at issue and whether the indemnity to CIH is full or proportionate. 
(3)	The Limitation Issue:
(a)	In the case of both the Clause 2 indemnity and the Clause 5 indemnity the time when the entitlement arises is not the date of the claim but the date of establishment or realisation (whether by a judgment, an arbitral award or agreement).
(b)	CIH is precluded from now asserting its time-bar case because it consented to the amendments to which that time-bar case relates, with the consequence that the relevant ‘end date’ in respect of those amendments for the purposes of the 1980 Act is the date when the proceedings were commenced. 
(4)	CPR 17.2: CPR 17.2 applies to a case to which CPR 17.1(2)(a) (amendment by consent) applies.