Insurance

In Re: Sean Quinn 10/1/12

Thu, 02 Feb 2012 20:35:35 GMT

The bankruptcy of Sean Quin, the founder of Quinn Insurance was annulled on the basis that he had failed to disclose that he held an Irish passport and was a registered voter in the Republic of Ireland where he paid 20% of his taxes. This will permit his creditors to pursue him for debts alleged to be owed including Anglo Irish Bank which is claiming more than €2 billion.

Delaney v Pickett and Tradewise Insurance Services (CA) 21/12/11

Thu, 02 Feb 2012 20:34:29 GMT

A car passenger could not claim under the Motor Insurers' Bureau Agreement after he had been injured while in possession of cannabis with an intent to supply, as the vehicle was being used in the course or furtherance of a crime within cl. 6 (1) (e) (iii) of the Agreement and "crime" was not restricted to "serious crime".

Starlight Shipping v Allianz Marine & Aviation (Comm) 19/12/11

Thu, 02 Feb 2012 20:32:34 GMT

The terms of a settlement agreement in a Tomlin order could be enforced without lifting the stay and without the need to issue fresh proceedings. The decision of the Court of Appeal in Hollingsworth v Humphrey did not address declarations, specific performance or damages other than under contract. Whether its impact was limited to the RSC and did not apply to the CPR did not need to be determined.

Thewlis v Groupama Insurance Co Ltd (TCC) 5/1/12

Thu, 02 Feb 2012 20:31:39 GMT

Following a claim under a household insurance policy in respect of subsidence damage the homeowner made an offer to settle before issuing proceedings. The letter stated that the offer was made pursuant to Part 36 and remained open for acceptance for 21 days after which it could only be accepted if costs were agreed or the court gave permission. The offer was not accepted within the 21 day period and proceedings were issued. Five months later insurers purported to accept the offer. The homeowner denied that insurers could because in reality the offer was not a Part 36 offer because it did not comply with all the requirements of Part 36. The Court held that a failure of the letter to comply with the requirement under CPR 36.3 was fatal and because it was unclear that the intention of the homeowner was that the offer should have the consequences of the new Part 36 regime introduced in April 2007 on its proper construction the offer was not open for acceptance by insurers after 21 days.

Teal Ass. Co. Limited v W.R.Berkley Ins. (Europe) Limited & Anr (CA) 15/12/11

Thu, 02 Feb 2012 20:22:40 GMT

The Black and Veatch insurance programme consisted of a tower of insurance contracts providing it with worldwide cover for any one claim (and in annual aggregate) of US$60 million in excess of the deductible and self insured retention. The first layer was written by Lexington Insurance. Above this were three further layers of excess of loss insurance written by Black and Veatch's captive insurer Teal. There was then a 'top and drop' policy for an additional cover of up to £10 million per claim once the tower was exhausted. This too was underwritten by Teal and reinsured with the Defendants. The 'top and drop' was limited to non-US claims whereas the tower provided worldwide cover. Teal contended that on the proper construction of the various excess of loss and the 'top and drop' policy was that each level would only be affected when the relevant insurer either accepted liability or was held liable by judgment following the Post Office v Norwich Union Insurance principles. This would allow Teal in effect to s elect the order of claims it put forward to ensure that the American claims used up the tower cover and the non-American claims were reserved for the 'top and drop' policy and then for reinsurers. The Court of Appeal held that once Lexington as first layer insurer was liable then the other layers of insurance would be impacted in an orderly fashion. This was the proper commercial construction of the contracts applying Rainy Sky v Kookmin.

Liberty Insurance PTE Ltd & Anr v Argo Systems FZE (CA) 15/12/11

Thu, 02 Feb 2012 20:21:36 GMT

Insurers were not estopped from raising a new allegation of breach of warranty some 7 years after the original letter of declinature and where proceedings had already taken place against brokers. At no stage did the insurers' correspondence or conduct give rise individually or cumulatively the essential unequivocal representation required for estoppel by representation.

Digital Satellite Warranty Cover Ltd v the Financial Services Authority (CA) 29/11/01

Thu, 05 Jan 2012 19:57:56 GMT

The FSA brought public interest petitions to wind up a business providing extended warranty contracts on the basis that the contracts they were entering were contracts of general insurance within the meaning of the Regulated Activities Order and the business should have been authorised. The type of insurance that the business was offering (benefits in kind) was not subject to Directive 73/329, and that because the amendment to the Directive 84/641 addressed only benefits in kind insurance in relation to assistance for persons travelling, the FSA could not regulate other 'benefits in kind' insurance. On their proper construction the directives were to be construed as laying down a minimum regulatory framework which did not exclude national government's right to extend regulation to a wider class of benefits in kind insurance.
Feeling low? Relationship difficulties? Confused about life?

Aizkir Navigation Inc v Al Wathba National Insurance Co. PSC (Com) 16/11/11

Thu, 05 Jan 2012 19:56:13 GMT

A clause in a marine insurance policy providing that claims 'be settled in accordance with English Law and practice and shall be so settled in Abu Dhabi (UAE)' was an exclusive jurisdiction clause in favour of the Abu Dhabi courts. On the facts there was no overwhelming or very strong reason to displace the jurisdiction clause and the claim had no connection with England other than the choice of law clause.

Brown Quinn & Anr v Equity Syndicate Management Ltd & Anr. (Comm) 21/10/11

Thu, 08 Dec 2011 22:02:00 GMT

Insurers were not entitled to assist on the appointment of a panel solicitor under a before the event insurance policy providing cover for legal expenses. The selection of another solicitor would not of itself be a breach of the insured's obligation to act reasonably. The assessment of reasonable costs would depend on the Court's assessment. While the Court may take in to account the fact that there were other solicitors willing to accept panel rates it would also have regard to assessing the reasonableness of all the other relevant factors including those set out in Wraith v Sheffield Forgemasters (the location of the chosen solicitors; their specialisation and any special qualifications for taking on the relevant claim; the complexity of the claim; the importance of the claim to the insured; the substance and strength of the proposed defendant to such claim; and the nature of the work required to be carried out).

Faraday Reinsurance Co Ltd v Howden North America & Anr (Comm) 1/11/11

Thu, 08 Dec 2011 22:01:45 GMT

Service outside the jurisdiction was not set aside where the insurer had much the better of the argument that there had been an implied choice of English law. While the mere placing of a policy in the London market was not conclusive there many factors pointing to this: the risk was broked and issued in London; the policy was on a London market underwriting slip which referred to London market institutions and features; the stamp applied to the slip employed London market abbreviations; and notifications were to be to London brokers. While the applicable law was not definitive in terms of determining the suitable forum, it was appropriate for the English court to determine the proceedings in relation to the issues of law even where this might not obviate the need for a trial in another jurisdiction.

Faraday Reinsurance Co Ltd v Howden North America & Anr (Comm) 1/11/11

Thu, 08 Dec 2011 22:01:44 GMT

Seashell of Lisson Grove Ltd & Ors v Aviva Insurance Ltd & Ors (Comm) 1/11/11

Thu, 08 Dec 2011 22:00:52 GMT

A business and property insurance policies contained limited breach of warranty clauses. The limitation clause in the business policy was intended to limit the common law effect of a breach of warranty so that the insurer was only released from liability for losses causally linked to the breach of warranty. On the construction of the clause insurers could only refuse to indemnity the damage linked to the breach of warranty. They could not exclude the entire claim. A non-invalidation clause extended to misrepresentations, non-disclosure and breach of warranty claims.

All Leisure Holidays Ltd v Europaische Reiseversicherung & Ors (Comm) 17/10/11

Thu, 08 Dec 2011 21:59:52 GMT

On their proper construction, passenger protection insurance policies provided for cover even where passengers had not submitted a claim form. The scheduled cruises were cancelled and the passengers had sustained a loss.

Bakewells v Royal Sun Alliance and Chartis 27/9/11

Thu, 08 Dec 2011 21:58:50 GMT

A firm of solicitors was not permitted to recover its liability to funders of its clients ATE policies under its policies of professional indemnity insurance. This sort of liability was not encompassed by the Law Society's minimum terms and conditions as the proximate cause of the loss was the firm's contractual undertaking to pay their client's liability to the funder.

Jones v Environcom & Ors (CA) 13/10/11

Thu, 10 Nov 2011 15:49:22 GMT

An insurance broker was sued on the basis that it had failed to obtain suitable insurance in respect of the company's hot works. Had the point been disclosed the company would in effect have been uninsurable. On appeal the company sought to argue that the broker was liable to the company because had it acted properly then it would have had to change its practices and the fire that subsequently occurred would have been avoided. The Court of Appeal did not permit the point to be raised on appeal as it was a fundamentally new case.

French v Groupama Insurance Company Ltd (CA) 11/10/11

Thu, 10 Nov 2011 15:48:33 GMT

Where parties agreed that correspondence containing offers was to be treated as privileged and that privilege would be waived for the purposes of costs it was not for the trial judge to go behind that agreement. However where an insurer had made an offer that was not consistent with the then Part 36 regime and had not made a formal Part 36 offer and it was faced by a litigant on person who had reduced the claims and on the basis of the particular facts, the appropriate order was no order for costs from the date the offer could have been accepted.

Hackney Empire Ltd v Aviva Insurance UK Ltd (TCC) 21/9/11

Thu, 10 Nov 2011 15:47:26 GMT

An insurance company's liability under a bond securing the performance of the obligations of a contractor under a building contract was not discharged by the payment under a side agreement of sums in response to the contractor's potential claims. The side agreement was not a variation to the building contract and would, in any event, have fall within the terms of the indulgence clause in the bond.

PT Buana Samudra Pratama v Marine Mutual Ins. Assoc. (NZ) Ltd (Comm) 29/9/11

Thu, 10 Nov 2011 15:46:29 GMT

A 'follow the leader' clause provided that the insurers would follow 'in respect of all decisions, surveys and settlements regarding claims within the terms of the policy, unless those settlements are to be made on an ex gratia or without prejudice basis.' On its proper construction the clause required the following market to follow settlements both as to liability and quantum and applied even where there had been an antecedent breach of warranty.

Fallows v Harkers Transport (CC) 2/9/11

Thu, 27 Oct 2011 21:13:00 GMT

In motor traffic cases the use by an insurer of a wholly owned subsidiary to undertake repairs in respect of vehicles either directly or through sub-contractors was permissible. However it was impermissible for the insurer to recover by way of a subrogated claim a higher price than was actually paid by its subsidiary to sub-contractors for those repairs even if that higher price was stated on the invoice from the subsidiary to the insurer. Even if those inflated sums were to be treated as 'administrative charges' of the insurer they were not recoverable. Permission to appeal was granted. The judge concluded by reminding the insurer involved and its lawyers of the professional duty to bring the attention of the judgment to judges in other cases even though it would not be binding.

Pope v Energem Mining (IOM) Ltd (formerly Branch Energy Ltd) (CA) 5/9/11

Thu, 27 Oct 2011 21:11:56 GMT

The appellant made a claim against the former employer of her deceased son. Her son was a geologist who was working for his employer in Angola when he was abducted and presumed to be killed by rebels. Clause 5.5 of her son's employment contract required the insurance company to insure his life for 60 times his basic monthly salary. However, the insurance policy had a cap of £400,000 on liability arising out of any one event. The appellant wished to receive the full amount and brought an action to recover. The insurance company made a payment of £123,000, together with interest, into court. On appeal, it was decided that the judge had appeared to have made an arithmetical error in determining the sum for which judgment should be given. In this regard, the appeal would be allowed in part. The balance ought to have been £121,233.83, and not the £115,890.60 as referred to in the judge's order.

Meritz Fire & Marine Insurance Co Ltd v Jan d Nul N.V. & Anr (CA) 21/7/11

Wed, 07 Sep 2011 13:30:21 GMT

On their wording, Insurers' obligations under advanced payment guarantees survived the novation of the underlying ship-building contracts. The APGs were to be operated against documents without regard to the underlying contract. o avoid this clear words would in the APGs would be required. The decision in Commercial Bank of Tasmania v Jones addressed the different and traditional "see-to-it" guarantees was not applicable to guarantees such as the APGs where payment is to be made against documents.

William McIlroy (Swindon) Limited & Ors v Quinn Insurance Limited (CA) 18/7/11

Wed, 07 Sep 2011 13:26:30 GMT

A clause in a public liability policy requiring any dispute to be referred within a set period of time to an Arbitrator in default of which the claim will be deemed to have been abandoned and not recoverable only took effect from when there was a liability for the insurer to pay which could not be unless and until the insured's liability relevant to third parties had been established by judgment, award or agreement. The decision in Walker v Pennine Insurance Co Ltd was to be distinguished not least because it did not refer to the decision in Post Office v Norwich Union Fire Insurance Society Ltd. As it is so long as the assured did not accept the insurer's repudiation it could have brought proceedings within six years of the repudiation of the claim to challenge it.

Gard Marine v Tunnicliffe & Ors (Comm) 30/6/11

Thu, 04 Aug 2011 13:44:36 GMT

The notation “(100%)” in regard to an excess or limit had a recognised and established meaning in the market writing direct insurance of offshore energy risks and facultative reinsurance to the effect that the limit or excess scaled to reflect the assured’s interest in the relevant assets.

Maritsave v National Farmers’ Union Mutual Insurance Society (QB) 1/7/11

Thu, 04 Aug 2011 13:43:22 GMT

On the evidence the insurers failed to prove that an intruder could not have broken in to the unoccupied insured property through a skylight or a window and the assured’s evidence that it had complied with its obligation to keep the property secure was accepted.

Garnat Trading & Shipping & Anr v Baominh Insurance Corporation (CA) 6/7/11

Thu, 04 Aug 2011 13:42:31 GMT

Insurers failed to overturn a decision that a risk relating to the towing of a floating dock had been fairly presented and that the insured was not in breach of a warranty of seaworthiness.

John Youngs Insurance Services Ltd v Aviva Insurance Services UK Ltd (TCC) 14/6/11

Thu, 04 Aug 2011 13:41:40 GMT

A construction company that had provided claims-handling and building-repair agents which it carried out as the insurer’s agent only owed fiduciary duties in respect of certain aspects of the relationship such as in handling insurers’ monies. There was no fiduciary duty owed in the process of carrying out the necessary repairs.

Beazley Underwriting Ltd & Anr v Travelers Companies Inc (Comm) 17/6/11

Thu, 04 Aug 2011 13:40:45 GMT

Insurers sought a declaration that they were not liable under a policy of professional indemnity insurance in respect of a liability under a Deed of Indemnity entered in to by the vendors of a group of insurance brokers to the purchaser in 1997. One of those brokers was found to have been liable to have been negligent in arranging insurance cover to a third party for the period between 1998 and 2001 on renewing a policy of insurance previously in place between 1995-1997. The indemnity was in respect of pre-completion events, but it covered a claim in respect of losses up to 12 months after completion if they arose from a continuing series of related events which commenced before completion. The Court held that the loss was caused by the failure to check on renewal in 2008 that the policy was suitable for the client’s needs and was not therefore a continuing series of related events.

Pryor v The Chief Constable of Greater Manchester Police, [2011] EWCA Civ 749

Thu, 07 Jul 2011 16:51:34 GMT

English Appeal Court case described by Lord Justice Ward as a “sorry tale” and concerning the police seizure of a vehicle believed to have been driven without a valid insurance certificate.

Mr Pryor purchased a car (a Honda) which he lent to his friend Mr Burton whilst he was abroad. He gave Mr Burton a signed letter confirming that he was the registered owner of the vehicle and stating that Mr Burton had his full permission to drive the vehicle.

Mr Burton was stopped by Greater Manchester Police for using a mobile phone whilst driving. The police asked Mr Burton to produce his licence, MOT and an insurance certificate. Mr Burton produced the paperwork including the letter from Mr Pryor and a Saga Insurance certificate for his own car (a Ford) which states that:

“The policy holder may also drive with the consent of the owner a motor car not owned by and not hired under a hire purchase or self-drive agreement to the policyholder”

However, this did not satisfy the police who phoned Saga and were informed by them (wrongly as it turned out) that Mr Burton was only insured to drive other cars under his policy if the other vehicle had its own insurance cover. According to the police computer the Honda had no cover. The police then seized the Honda under s165A of the Road Traffic Act 1988.

In terms of s165, the police can require a person driving a motor vehicle to produce various documents including a “relevant certificate of insurance”. In terms of s165A, if the person fails to produce the documents requested and the constable has reason to believe the vehicle is being driven without the documentation in place; the police can seize the vehicle.

Mr Pryor brought a claim against the police for wrongful interference with property. The claim was dismissed by the District Court on the basis that the issue was whether the police officer had reasonable grounds for believing that Mr Burton was driving without insurance. Notwithstanding the fact that Mr Burton was driving with permission and with insurance, what was important whether the Police had reasonable grounds for believing that the vehicle was being driven without insurance and the (albeit misleading) information from Saga had provided those reasonable grounds.

However, the Court of Appeal allowed the appeal finding that (in the words of Lord Justice Ward) it was “plain as a pikestaff” that the police had failed to establish grounds for seizure of the Honda and had wrongly interfered with Mr Pryor’s goods.

In order to justify seizure of a vehicle three facts must be present:

a constable in uniform must require that a driver produces a relevant certificate of insurance,
the driver must fail to produce the relevant certificate, and
the constable must have reasonable grounds for believing that the vehicle was being driven without insurance.

The Judgement in the District Court rested on the third element of the test. However, the Court of Appeal made it clear that that this element of the test only applies if the driver fails to produce the relevant certificate.

The police attempted to argue in court that the “relevant certificate” was the certificate for the Honda not the Ford, however, Lord Justice Ward said that was “simply wrong”. The purpose of the Road Traffic Act is to ensure that users of motor vehicles are insured against third party risks. Mr Pryor was covered because his policy (for the Ford) extended to his driving, with the consent of the owner, a car not owned by him. The certificate he produced said exactly that. Since the certificate he produced demonstrated that he was not guilty of driving without insurance it was plainly a relevant certificate.

As Mr Pryor had not failed to produce the relevant certificate (in terms of the second part of the test), the police constable’s belief, that the certificate did not mean what it said, was neither here nor there.

A noteworthy aside is that the insurance company clearly believed that the cover was only extended if the car being driven was itself insured by its owner. It will be interesting to see whether this case leads to a rewording of some insurance policies.

Zurich Insurance Company Plc v Hayward. 27 May 2011

Fri, 01 Jul 2011 10:15:33 GMT

Insurers had participated in the settlement of the Defendant's earlier personal injury claim arising from an incident at work. In those proceedings insurers had alleged that the Defendant while suffering from ongoing symptoms was exaggerating his symptoms. Following the trial insurers obtained evidence that was not previously available to them to the effect that the Defendant had fully recovered. When insurers applied to set aside the settlement on the basis that it was obtained by fraud the Defendant applies to strike out the claim on the basis that the issue of fraud had been determined by the compromise and the proceedings were an abuse of process. The Court of Appeal on a second appeal permitted the action to proceed on the basis that it could not amount to an abuse of process in terms of the Johnson v Gore Wood abuse and the interests of the administration of justice would usually prevail in permitting a second action where there was cogent evidence of a fraud being deployed to obtain a judgment or enhanced settlement award unless the facts were known or should have been known at the time. There was a difference in analysis as to the effect of the Tomlin order on which the settlement was reached. Smith LJ held that while the Tomlin order could give rise to an estoppel by record it would only be in respect of those matters within the Tomlin Order. The issue of fraud relied on by insurers was different. Moore-Bick LJ held that a Tomlin Order will not give rise to an estoppel by record because it is not a judicial pronouncement. However it may give rise to an estoppel by conduct or agreement.

AXA Sunlife Services Plc v Campbell Martin Ltd & Ors [2011] EWCA Civ 549 12/05/2011

Thu, 09 Jun 2011 14:42:00 GMT

Insurers should not be deprived of their costs where they had succeeded on issues of construction merely because the issue turned on the construction of their standard form contract or that they were the larger company. The parties were in a commercial relationship and the usual rule should apply. There was no basis for applying the principle relating to public law cases in which a substantial defendant may be required to bear all parties’ costs or be deprived of its own costs on the issues on which it succeeds.

Teal Assurance Company Ltd v W R Berkley Insurance (Europe) Ltd & Anor [2011] EWHC 91 (Comm) 31/01/2011

Thu, 24 Feb 2011 23:55:42 GMT

A dispute arose between insurers and reinsurers as to the allocation of liability claims made against the underlying assured on an insurance policy and an excess policy. The first layer of insurance covered both US and non-US liability claims. The excess layer covered only non-US claims. The excess layer was reinsured. The assured was the subject of both US and non-US claims. Insurers sought to attribute the US claims to the first policy of insurance and the non-US claims to the excess layer. Insurers sought to argue that preconditions to liability in the policy as to the making of claims altered the general approach to the order in which losses would erode liability under the insurance policy. As the excess policy was a “top and drop” policy under which it was stipulated that there was no obligation to pay unless the lower layers were exhausted. In a programme of “top and drop” policies the criterion determining the order in which losses eroded the underlying cover was not when the insurer w as liable under the further policy but when liability arose under the original insurance programme and they did not operate on the basis that after the end of the insurance period the insured would aggregate his losses and attribute different losses to different policies without regard to when they had been incurred.

Global Process Systems Inc & Anor v Berhad [2011] UKSC 5 01/02/2011

Thu, 24 Feb 2011 23:54:41 GMT

During the transfer of an oil rig by a barge from Texas to Malaysia three of its four legs became detached. This arose as a result of [1] a build up of stresses within each leg during the course of the voyage; [2] which resulted in weakness within the structure; [3] such that the impact of a particular wave in a particular direction resulted in the shearing of the metal of one leg; [4] this in turn led to more concentrated stresses in the other three legs; and [5] the loss of two further legs following further directional impacts with other waves. The nature of the waves that ultimately led to the loss of the legs was foreseeable. Insurers sought to rely on the inherent vice exclusion in the policy however the Supreme Court unanimously held that the proximate cause was the perils of the sea rather than inherent vice – the breaking of the legs was neither expected nor contemplated and only occurred under the influence of a wave of a direction and strength catching the first leg right at the ri ght moment. The Supreme Court expanded on Lord Diplock’s definition of inherent vice in Soya GmbH Mainz Kommanditgesellshcaft v White [1983] 1 LLR 122.

Masefield AG v Amlin Corporate Member Ltd & Anor [2011] EWCA Civ 24 26/01/2011

Thu, 24 Feb 2011 23:53:50 GMT

The ‘capture’ of a ship by pirates in Somalia did not as a matter of law amount to an absolute total loss under the Marine Insurance Act. Such acts of ‘capture’ are factually sensitive. Where there was not only a chance, but a strong likelihood that payment of a ransom amount comparatively small relative to the value of the vessel would lead to the return of the vessel and cargo, there was not a constructive loss in the marine insurance context. The test is whether there was an ‘unlikelihood of recovery’ rather than an uncertainty of recovery. The payment of a ransom was not of itself contrary to public policy.

Sharon's Bakery (Europe) Ltd v Axa Insurance UK Plc & Anor [2011] EWHC 210 (Comm) 09/02/2011

Thu, 24 Feb 2011 23:53:06 GMT

Insurers were entitled to avoid liability on the basis of material non-disclosure and fraudulent means or device. Prior to inception the assured had used a false invoice in submissions to a third party financing business. This represented a ‘moral hazard’ that should have been disclosed. The invoice was subsequently submitted in support of the claim and amounted to a fraudulent means or device.

Global Process Systems Inc and another (Respondents) v Syarikat Takaful Malaysia Berhad (Appellant), [2011] UKSC 5, 01/02/2011

Fri, 11 Feb 2011 00:14:32 GMT

This appeal concerns the scope of the exclusion in a marine insurance policy for loss caused by “inherent vice” in the subject matter insured.

The oil rig “Cendor MOPU” had been laid up in Galveston, Texas. In May 2005, it was purchased by the Respondents for conversion into a mobile offshore production unit for use off the coast of Malaysia. The Respondents obtained insurance from the Appellant for carriage of the oil rig on a towed barge from Texas to Malaysia.

The oil rig consisted of a platform and three legs extending down to the seabed. The rig was carried on the barge with its legs in place above the platform, so that the legs extended some 300 feet into the air.

The tug and barge set off from Galveston in August 2005 and arrived at Saldanha Bay, just north of Cape Town, in October 2005 where some repairs were made to the legs. The voyage then resumed but on the evening of 4 November 2005 one leg broke off and fell into the sea. The following evening the other two legs fell off. The breakages were the result of metal fatigue caused by the motion of the waves. In addition, the impact of a “leg breaking wave” was required to generate the final fracture. The weather experienced on the voyage was within the range that could reasonably have been contemplated.

The Respondents made a claim under the policy for the loss of the three legs. The Appellant rejected the claim and the matter came for trial before the Commercial Court. The Judge held that the proximate cause of the loss was the fact that the legs were not capable of withstanding the normal incidents of the insured voyage, including the weather reasonably to be expected. Therefore the cause was inherent vice within the meaning of Clause 4.4 and the Appellant was not liable. The Court of Appeal reversed the decision, holding that the proximate cause of the loss was an insured peril in the form of the “leg breaking wave”. The Appellant appealed to the Supreme Court.

The Supreme Court unanimously dismisses the appeal. The Court finds that the proximate cause of the loss was a peril of the sea, for which the insurers were liable, and not inherent vice.

Green Island Organics Ltd v. Q.B.E. Insurance (Europe) Ltd [2011] CSOH 15

Fri, 28 Jan 2011 00:49:27 GMT

The pursuers carried on a fish farming business in Shetland and in October 2007, had taken out a contract for insurance in respect of the mortality and physical loss of Atlantic salmon farmed by them. In November 2008, it was averred that Atlantic salmon owned by the pursuers had suffered an infestation of sea lice. In March 2009, the pursuers intimated their claim to the defenders, to be indemnified under the terms of their contract of insurance.

One of the eight specified Perils under the insurance contract was in respect of “Disease”. The pursuers argued that the infestation of sea lice came under this heading. It was submitted that the general understanding of insurers of aquaculture risks, and of those whom they insure, was that insurance of farmed fish against disease covered outbreaks of sea lice. Conversely, the defenders argued that sea lice were aquatic organisms that caused physical damage and that as such, the risk was excluded in terms of the Perils of the insurance contract. It was argued on behalf of the defenders that fish damaged by sea lice were not diseased, but merely possessed a physical disability.

The Lord Ordinary accepted evidence led on behalf of the pursuers, to the effect that the presence of large numbers of sea lice on salmon causes ulceration and destruction of the skin of salmon, leading to osmotic imbalance and the death of the fish as a result of heart failure. The Lord Ordinary accepted that in ordinary usage, this was a parasitic disease, with a primary causative relationship to the mortality of the insured fish.

Examining the wording of the contract as a whole, the Lord Ordinary moreover considered that the language of the contract supported the interpretation favoured by the pursuers. Noting that expert evidence suggested that the inclusion of disease as a result of sea lice was a common feature of industry insurance contracts, and also matched business common sense, the court was satisfied that an ordinary aquaculture insurance underwriter would understand that mortality of fish caused by an infestation of sea lice would be regarded as a disease and therefore covered by the insurance policy.

Thomas Richard Turnbull v. MNT Transport (2006) Ltd and another and (1) AXA Insurance UK plc & (2) Chaucer Syndicates Ltd, t/a Chaucer Insurance [2010] CSOH 163

Wed, 05 Jan 2011 23:20:34 GMT

In September 2006, the pursuer rode his motorcycle into a violent collision with the rear of a stationary vehicle, which had been parked overnight in the street where he lived. The pursuer sought damages from the HGV driver who left the trailer in that position, and vicariously, from the haulage company by whom the driver was employed. Each of the third parties joined to the action declined to indemnify the first defenders against the pursuer’s claim. A preliminary proof took place, restricted to the issue of indemnity.

The defenders had maintained that they would be entitled to indemnities under both of the two third parties’ insurance policies. It was argued that neither of the third parties could, in the circumstances, free themselves from liability, and the court should find both obliged to indemnify the defenders on a pro rata basis. In contrast, each of the third parties advanced reasons why their own policy should be held inapplicable, and why any obligation to indemnify the defenders should fall on the other third party alone.

Having heard evidence and submissions on the correct contractual interpretation to be afforded to the relevant policy exclusions in each policy, the Lord Ordinary concluded that both insurance policies did apply to the case. The Lord Ordinary concluded that as both insurance policies applied, and the application of the “double insurance” doctrine had been cancelled out by the terms of each policy, the first defenders were entitled to indemnity from both sets of insurers if, and to the extent that, any award of damages was ultimately made in the pursuer’s favour.

Islamic Republic of Iran Shipping Lines v Steamship Mutual Underwriting Association (Bermuda) Ltd [2010] EWHC 2661 (Comm) 26/10/2010

Thu, 25 Nov 2010 13:40:13 GMT

The Court considered the effect of a licence issued under the Counter-Terrorism Act 2008 and whether it gave the P&I insurance club grounds for discharging the P&I insurance with an Iranian shipping company on the basis of frustration or supervening illegality. On its proper construction the licence permitted continuing insurance cover on a limited basis and there was no frustration of the contract.

Greene Wood McLean Llp v Templeton Insurance Ltd [2010] EWHC 2679 (Comm) 26/10/2010

Thu, 25 Nov 2010 13:39:23 GMT

Solicitors who arranged for insurance under ATE policies for their clients did not themselves benefit from an implied term in the policy that insurers would honour the policy to the insured. However because both insurers and solicitors had been involved in the preparation of a guarantee to clients that there would be no costs exposure there was a good basis for concluding that the common intention was that insurers would be primarily responsible for any such indemnity. Accordingly the settlement by solicitors (via their professional indemnity insurers) of their clients’ liability to third party costs orders was the settlement of a joint liability for which solicitors could recover from insurers. The same result would have arisen under the Civil Liability (Contribution) Act 1978.

Jacobs v Motor Insurers Bureau [2010] EWCA Civ 1208 27/10/2010

Thu, 25 Nov 2010 13:38:01 GMT

The assessment of damages in a claim on the MIB by an injured person in respect of an accident involving an uninsured third party abroad was to be assessed by reference to the English law of damages rather than that applicable to the location of the accident notwithstanding that the injured person might thereby recover more from the MIB than if the driver had been sued directly.

Garnat Trading & Shipping (Singapore) Pte Ltd & Anor v Baominh Insurance Corporation [2010] EWHC 2578 (Comm) 19/10/2010

Thu, 25 Nov 2010 13:37:13 GMT

The first claimant, acting as a broker, identified a floating dock for sale in 2005 for the second claimant. It was agreed that the first claimant would purchase the floating dock and sell it to the second claimant in a seaworthy state ready for towing. The first claimant, therefore, arranged for the floating dock to be modified. A towage plan was made for the voyage, which was approved by the surveyors and insurance for the voyage was fixed with the defendant insurance company. The purchase price was to be paid by the second claimant in two instalments, first 20% and then 80%. However, the floating dock sank in rough seas. The weather conditions had created wave heights of over six meters, which flooded the deck of the dock, causing a pontoon to break free from its restraining ropes which damaged the hull of the dock, causing its loss. The claimants agreed that they would procure the bank to return the second instalment and claim the first instalment from the insurance company. The defe ndant contended that it was not under an obligation to pay under the contract of insurance on two grounds: (i) that the claimant should have disclosed, but failed to disclose various documents which formed part of the towage plan, which contained very detailed calculation as to the stability and floodability of the dock, concluding that sea towage was permissible only in conditions up to a wave height of 3.5 meters; and (ii) that the dock was unseaworthy at the time of sailing. The Court held that the defendant could not establish that the failure to disclose the towage plan had induced the formation of the contract on the terms that were made. Accordingly, the defence of non-disclosure failed.

Sugar Hut Group Ltd & Ors v Great Lakes Reinsurance (UK) Plc & Ors [2010] EWHC 2636 (Comm) 26/10/2010

Thu, 25 Nov 2010 13:36:21 GMT

Insurers successfully avoided a claim for an indemnity in respect of a claim following a fire at nightclub premises on several grounds including material non-disclosure in respect of financial difficulties with associated companies. Before an assured could rely on waiver by reason of the limited nature of the questions in the form it had to demonstrate that those questions were answered correctly. On the facts they had not been.

Synergy Health (UK) Ltd v CGU Ins. plc (t/a Norwich Union) & Ors [2010] EWHC 2583 (Comm) 19/10/10

Thu, 25 Nov 2010 13:35:11 GMT

The claimant company was one of a number of companies in the Synergy group providing laundry and related services to the NHS. One of the premises owned and operated by Synergy was insured by the defendant insurers against, amongst other things, the risks of material damage and business interruption. The policy was renewed for the year 2006/07. The insurance was underwritten on behalf of the insurers by underwriting agents, Fusion. The insurance was placed with Fusion by the fifth defendants, (the brokers). On 3 February 2007, there was a fire at the premises which led to a claim by Synergy under that policy for material damage and business interruption losses. The material damage amounting to a claim agreed at £4m. The claim for business interruption was outstanding at £2m. However, the insurers repudiated liability and sought to avoid the contract of insurance for alleged material non-disclosure and/or misrepresentation by Synergy. The Court held that a representation as to expe ctation or belief was true if it was made in good faith. It was only a material misrepresentation made during the negotiations for the contract for insurance which entitled the insurers to avoid a contract, if they had been induced by it. Where a representation was made to the insurers four months before renewal about a matter which was material to the risk and to its renewal then if it was not subsequently corrected at renewal, the misrepresentation would be held to be implicitly repeated at the renewal date.

Kamal v Ariela & Ors [2010] EWHC 2531 (Comm) 14/10/10

Thu, 25 Nov 2010 13:25:20 GMT

In a claim against underwriters for a non-party costs order on the basis that they supported and funded a fraudulent claim shipping claim a disclosure order was sought against underwriters. Underwriters’ claim to privilege was refused because they had been used by their assured as part of the fraud and while unaware of that any privilege was overridden by the fraud exception. Disclosure was also appropriate in respect of the investigations undertaken by underwriters at the outset as to whether or not the claim was fraudulent.

Gard Marine and Energy Ltd & Ors v Glacier Reinsurance AG [2010] EWCA Civ 1052 06/10/10

Thu, 21 Oct 2010 18:54:29 GMT

Where the participation of a London market reinsurer and a Swiss reinsurer were governed by English law, and were on the same terms and part of the same placement in respect of an excess of loss policy there would be a risk of inconsistent judgments where the Swiss courts had declined to entertain the claim involving the London market reinsurer. Accordingly the English court had jurisdiction to hear the claim involving the Swiss reinsurer pursuant to the Lugano Convention 1988 Art. 6 (1).

Stonebridge Underwriting Ltd v Ontario Municipal Insurance Exchange [2010] EWHC 2279 (Comm) 10/9/10

Thu, 21 Oct 2010 18:53:13 GMT

Where a reinsurance contract had been placed in London by London brokers with a London reinsurer incorporating several standard London market clauses it was strongly arguable that the parties to the contract had impliedly chosen English law as the governing law of the contract. This was of considerable significance in determining that England was the proper place for hearing a dispute under the contract because of the distinct advantage of having the issues of construction determined by the English court. The same decision would apply if the court concluded that English law was likely to be applicable because England was the place of characteristic performance.

Joseph Fielding Properties (Blackpool) Ltd v Aviva Insurance Ltd [2010] EWHC 2192 (QB) 23/8/10

Thu, 21 Oct 2010 18:52:24 GMT

Exaggeration of claims

Travelers Insurance Company Ltd v Countrywide Surveyors Ltd [2010] EWHC 2455 (TCC) 6/9/10

Thu, 21 Oct 2010 18:50:11 GMT

The Defendant took out a professional indemnity insurance policy in which the Claimant, Travelers Insurance Company Ltd, was the lead insurer. However, the policy provided that the underwriters were not to avoid a policy for non-disclosure or misrepresentation provided that the misrepresentation was free from fraudulent intent. Potential issues of fraud arose regarding certain valuations carried out by a former surveyor of the Defendant. As a result, there was a possibility that Travelers might seek to avoid the policy for misrepresentation and/or non-disclosure. In order to obtain the necessary documentation to assess the extent of or presence of fraud, Travelers issued an application pursuant to CPR 32.16 for pre-action disclosure. The Defendant, in response, relying on the condition, contended that the court did not have the necessary jurisdiction to make the order sought on the basis that the court's powers to order pre-action disclosure did not extend to the situation where the dispute between the p arties would be determined in arbitration rather that in court. The Court decided that the existence of the arbitration agreement would, as a matter of construction of s.33 of the Senior Courts Act 1981, deprive the court of the power to make under CPR 31.16. But that was not an end of the matter because Travelers further stated that the court had the appropriate jurisdiction as a result of section 44(3) of the Arbitration Act 1996. The Court held that the underlying dispute as to the possible misrepresentation and/or fraudulent was the subject of a binding arbitration agreement and, in those circumstances, the court's powers to order pre-action disclosure are not exercisable. The Court, therefore, had no jurisdiction.

Omega Proteins Ltd v Aspen Insurance UK Ltd [2010] EWHC 2280 (Comm) 10/09/2010

Thu, 21 Oct 2010 18:49:18 GMT

The claimant, Omega Proteins Ltd, was in the business of processing by-products from animal carcasses which it supplied to customers, such as pet food manufacturers. Omega was supplied with animal carcasses by Northern Counties Meat Ltd. Northern Counties failed to act promptly to comply with a new statutory regulation, introduced following the BSE crisis, which classified (any mixture containing) vertebral columns from animals over 24 months old as specified risk material fit for disposal only. As a result, Northern Counties supplied Omega with over 220 tonnes of animal material which, unknown to Omega, was specified risk material. Omega mixed this material with other material, thereby contaminating the whole bulk of the resulting mixture which it supplied to its customers (and they, in turn, to others). A company which had ultimately purchased some of the contaminated material began an action for damages against one of Omega's customers which joined Omega as a third party. Omega in turn joined Northern Counties as a fourth party. The Court held that Omega was liable to pay damages to its customer for breach of contract and that Northern Counties was liable to indemnify Omega in respect of such liability. However, Northern Counties was in liquidation and unable to satisfy any judgment against it. Omega therefore commenced an action pursuant to the Third Parties (Rights Against Insurers) Act 1930 against Aspen which insured Northern Counties under a combined liability policy seeking a declaration that Aspen was liable to indemnify it under the policy in respect of its liability resulting from the underlying judgment. The product liability section of the policy provided cover against "all sums which the Insured becomes legally liable to pay for damages and claimants' costs and expenses arising out of or in connection with … accidental loss of or damage to property". However, the exclusions to this section included an exclusion of "any liability arising … under any c ontract or agreement unless such liability would have attached in the absence of such contract or agreement". Aspen contended that the policy claim fell within this contractual liability exclusion since the underlying judgment definitely and conclusively determined that Northern Counties was liable to Omega in contract. Omega accepted that the liability for which it sought insurance coverage arose under a contract but contended that whether or not there was cover depended on whether such liability would have attached in the absence of the contract. The Court held in favour of Omega that the contractual liability exclusion invites consideration as to what liability would have attached in the absence of a contract (but the facts were otherwise as they were), not what (if any) liability in tort would have attached in the presence of a contract.

Royal Sun Alliance Insurance plc v Rolls Royce plc [2010] EWHC 1869 (Comm), 21/7/10

Thu, 23 Sep 2010 15:52:37 GMT

The 'mermaid pod' was a self-contained marine propulsion device containing a propeller shaft and an electric motor which drove the propeller. The device was designed to be attached to the bottom of ships, and the pod could be rotated allowing it to steer the ship as well as to propel it. The device was developed by an international consortium, including a group of companies purchased by the defendant, an English company, and its subsidiary companies. The defendant had obtained primary and excess layer policies governed by English law from the claimants, who were predominantly insurers based in London, covering the defendant and its subsidiary and associated companies with respect to general liability risks, construction all risks, and professional indemnity risks. Insurers refused to indemnify the Claimant on the basis for a number of reasons including interpretation of the policies, factual and technical issues and notification points. The defendant issued proceedings in the US under the insurance polici es, seeking a declaration that the various insurance policies were responsible, and that they were entitled to an indemnity. However, the claim was by an English insured company against predominantly English insurers under an insurance policy subject to English law and placed by London market brokers. Accordingly, the defendant had not shown that the US court was the most appropriate forum for the trial of the claim.

Autofocus Ltd v Accident Exchange Ltd, [2010] EWCA Civ 788, 14/07/2010

Wed, 08 Sep 2010 18:56:19 GMT

Witness immunity

Quinn Direct Insurance Ltd v The Law Society of England and Wales, [2010] EWCA Civ 805, 14/07/2010

Wed, 08 Sep 2010 18:55:14 GMT

Access to documents by insurers following Law Society Intervention

Ghadami & Anor v Lyon Cole Insurance Group Ltd, [2010] EWCA Civ 767, 13/07/2010

Wed, 08 Sep 2010 18:52:39 GMT

Costs and the Indemnity Principle

Persimmon Homes Ltd & Anor v Great Lakes Reinsurance (UK) Plc, [2010] EWHC 1705 (Comm), 12/07/2010

Wed, 08 Sep 2010 18:51:37 GMT

ATE insurers were not liable to a successful defendant under the Third Parties (Rights against Insurers) Act 1930 s. 1 where they had been induced to enter in to the policy by the claimant by misrepresentations and non-disclosure. They were entitled to avoid the policy.

Axa Corporate Solutions SA v National Westminster Bank Plc, [2010] EWHC 1915 (Comm), 29/07/2010

Wed, 08 Sep 2010 18:50:34 GMT

AXA underwrote 100% of the banking group’s public liability and products liability policy for the period 1998 to 2004. The group was subject to a number of claims in the USA under the US Antiterrorism Act. AXA raised various coverage points including reliance on a terrorism exclusion clause. The clause was said to have been incorporated in the 2002-2003 policy year on the basis of a renewal fax with the words ‘Terrorism exclusion (wording to be agreed)’. The bank and its brokers denied that the exclusion clause was insisted upon or agreed by AXA. The Court concluded that that following the fax there was no further discussion of the exclusion. However as the words ‘Terrorism exclusion’ were words of substance and content on their own they were sufficient to have contractual force. That the parties contemplated a fuller expression did not undermine the position that the exclusion was capable of interpretation and application. It was inappropriate for the court to construe the term agreed in the abstract.

Executors of the late Walter James Duncan McCann v Great Lakes Reinsurance (UK) Plc, [2010] CSOH 59, 19/5/10

Wed, 28 Jul 2010 22:26:52 GMT

The Scottish Supreme Court dismissed a case where there was an existing disease at the time of an accident, which resulted in death. Walter McCann, who was 70 years old, suffered a road traffic accident on 26 June 2006 in which he sustained serious injuries, including a fracture of the sternum, multiple rib fractures and pulmonary contusions. His conditions deteriorated as a result of those injuries. As a result of his serious medical condition he was vulnerable to developing pneumonia from chest injuries, which otherwise would not have been life-threatening. He eventually died of pneumonia. The court held that a normal individual who suffered similar rib fractures and a fractured sternum would not have developed pneumonia and died. Therefore, the accident could not be considered to be the sole cause; his diseases were a co-operative cause and it could not be said that in the absence of a relevant exclusion clause in an accident insurance policy, a clause protecting the insured against death which was c aused solely by “bodily injury” did not by itself prevent the insured from claiming indemnity where there were two contributing proximate causes and only one was covered by the insurance policy.

Al Khudairi and Anr v Abbey Brokers Ltd and Others, [2010] EWHC 1486 (Ch), 24/7/10

Wed, 28 Jul 2010 22:12:56 GMT

Abbey Brokers Ltd was a company carrying on business as a mortgage and insurance broker. Mr Silva, the director of the company, had taken funds from a loan obtained by a client and used them to discharge his own debts. The court held that the company was liable to their clients for breach of contract and breach of fiduciary duty. Mr Silva was liable for deceit and dishonest assistance.

Orient-Express Hotels Ltd v Assicurazioni General SPA (UK), [2010] EWHC 1186 (Comm), 27/5/10

Thu, 01 Jul 2010 17:13:29 GMT

Claims were made on a New Orleans hotel’s business interruption policy following Hurricanes Katrina and Rita in which the hotel was damaged. Following the hurricanes, parts of New Orleans were evacuated and the city was closed and so for that period of time the hotel would have been effectively closed irrespective of damage to the hotel. The policy provided cover for business interruption loss caused by physical damage. The question arose as to whether the arbitration tribunal had been correct in concluding that the hotel could only recover for those losses which would not have arisen had the damage to the hotel not occurred i.e. which satisfied the “but for” test of causation. The hotel sought to contend that the case was one of the exceptional cases where it was fair and reasonable to depart from the “but for” test and to allow recovery where two independent causes resulted in loss and the cause not included in the policy was not expressly excluded. While that approach migh t be appropriate in certain cases it would be fact dependent. As the provisions of the contract made clear that causation was to be approached on a “but for” approach and the policy provided a separate extension to the cover for prevention of access any test of fairness and reasonableness would maintain the “but for” test.

Churchill Insurance Company Ltd v Wilkinson & Ors, [2010] EWCA Civ 556, 19/05/2010

Thu, 01 Jul 2010 17:12:20 GMT

The Court of Appeal considered two conflicting decisions in respect of the potential recovery by insurers under section 151 (8) of the Road Traffic Act 1988 of sums paid in respect of personal injuries compensation to its insured under s. 151 (4) of the Road Traffic Act 1988 where the insured permitted his vehicle to be driven by an uninsured driver. The Court of Appeal referred the question of the compatibility and possible amendment or reinterpretation of section 151 (8) to the Court of Justice which appeared to conflict with the ECJ decisions on the narrow scope of exclusions under the relevant directive.

Yeganeh v Zurich Plc, [2010] EWHC 1185 (QB), 27/5/10

Thu, 01 Jul 2010 17:11:07 GMT

Although insurers failed to persuade the court that the fire was started by the assured’s own acts his attempts to exaggerate his claim by placing additional items in the premises following the fire meant that his whole claim was dismissed.

InsuranceWide.com Services Ltd v Revenue and Customs Commissioners and Anr, 22/4/10, [2010] EWCA Civ 422

Thu, 20 May 2010 20:02:29 GMT

This case concerned two appeals regarding the exemption from VAT for the provision of services by an insurance broker or an insurance agent of the services of an insurance intermediary (the insurance intermediary exemption). In each appeal, the two companies (InsuranceWide.com Services Ltd and Trader Media Group Ltd) claimed the exemption by virtue of the facility which they provided through their respective websites for the public to have access to an insurer or an insurance broker or insurance agent from whom an insurance contract could be made. On appeal, the Court had to decide whether the two companies acted as insurance brokers, which was necessary for the application of insurance indemnity exemption. The Revenue argued that the companies merely provided a ‘click through’ facility to a broker, agent or insurer and that, in the absence of any legal relationship with either the insurer or the insured or the prospective insured and in the absence of any involvement in the negotiation of th e terms of the insurance contract or its preparation or collection of premiums or handling of any claims, their activities were not that of an insurance broker for the purposes of the insurance intermediary exemption. The Court of Appeal held that the functions performed by the two companies were much more than the provision of a ‘click through’ facility to a broker, agent or insurer. It was sufficient that they were providing services characteristic of an insurance broker and which were vital to the process of introducing those seeking insurance with insurers, even if they were only part of a chain of such persons.

IRB Brasil Resseguros SA v CX Reinsurance Company Ltd, 7/5/10, [2010] EWHC 974 (Comm)

Thu, 20 May 2010 20:01:27 GMT

In considering whether arbitrators had correctly applied the law, the Court will not construe the words of the Arbitrators as if they were a statute and infelicitous paraphrasing of the correct legal test will not impugn the award where it is clear that the correct approach has been applied.

The National Farmers Union Mutual v HSBC Insurance (UK) Limited, 19/4/10, [2010] EWHC 773 (Comm)

Thu, 20 May 2010 20:00:37 GMT

A fire destroyed a property between the exchange of contracts for sale and completion. The contract for sale provided that the risk of damage to or destruction of the property passed to the purchasers upon exchange. Shortly before exchange the purchasers had taken out buildings insurance with the NFUM in respect of the property although the vendors’ buildings insurance provided cover to anyone purchasing the property until the earlier of the date of completion or termination of the policy period subject to any other insurance applying. Although reluctant to, the purchasers did complete the purchase and paid the full purchase price. Accordingly the vendors made no claim under their buildings insurance policy with HSBC. The purchasers claimed successfully under their policy with NFUM. NFUM then sought a contribution from HSBC on the basis of double insurance. The NFUM provided that where there was other insurance it would only pay its share. On the true construction of the HSBC policy there was no cov er for the purchasers because at the time of the fire the purchasers had effective insurance covering the same risk.

Hall v Newall Heating Limited and AGF Insurance Limited, 14/4/10

Thu, 20 May 2010 19:59:42 GMT

There was insufficient evidence to show that the first defendant had an insurance policy in place to cover the first defendant’s liability for the claimant’s industrial injury. While the Department of Work and Pensions has recently issued a consultation paper to consider among other things the establishment of an Employers Liability Insurance Bureau, pending the introduction of such a scheme the safety net which the Employers’ Liability (Compulsory Insurance) Act 1969 was intended to provide has not achieved its purpose.

Horwood & Ors v Land of Leather Ltd & Zurich Insurance Plc, [2010] EWHC 546 (Comm), 18/3/10

Thu, 06 May 2010 18:27:12 GMT

A control of claims clause in a product liability contract applied to both claims made against the assured and claims for contribution made by the assured. Where the assured had entered in to an enforceable settlement agreement with a third party for contribution to the assured’s third party liability then the assured could not recover under the policy. There was no need for an implied term on the facts of the case. Had there been the court would have held that there was an implied duty on the assured to act in good faith and reasonably with regard to the interests of the insurer. If contrary to the judge’s finding a reasonable person with the background knowledge available to both parties would not have understood the compromise agreement as having settled the claim for an indemnity against the third party then the assured would not have acted unreasonably or in bad faith without regard to the interests of the insurer.

Loyaltrend Ltd and another v Creechurch Dedicated Ltd (Sued on behalf of itself and on behalf of all other underwriting names of syndicate 962 2002 Underwriting Year) and others (QBD) 5/3/10

Wed, 24 Mar 2010 20:05:34 GMT

Loyaltrend was insured through its brokers from 2002 to 2006 under a continuous policy of insurance. In fact the first defendant had insured Loyaltrend from 2002 to 2003, the second defendant, Brit, from 2003 to 2004 and the third defendant from 2004 to 2006. The overall policy covered loss of profit from damage to trade contents (material damage) and business interruption loss which was that which followed from the relevant material damage. General condition 5 required the insured to give “...immediate notice to the insurers on the happening of any injury or damage in consequence of which a claim is or may be made under this policy....” In 2003, before the commencement of Brit's policy subsidence of the building occurred. The defendants were not notified. From 2004 onwards water ingress was a regular feature. When the defendants were notified in 2005 of a claim for damage and business interruption under the policy arising from the subsidence they refused to pay and Loyaltrend commen ced proceedings against all three defendants. Loyaltrend later discontinued the proceedings against the first and third defendants and pursued their claim against Brit. Brit denied liability contending that there had been no material damage of the kind which was a pre-condition to business interruption cover and that in any event there had been a failure to give timely notice to the insurer. The Court had to consider whether the claimant was entitled to claim from Brit in relation to the damage occurring in 2004-2005. The claim was dismissed as the general condition 5 was a complete answer to the claimant's claim. The test was objective not subjective. Although there had been a step change in October 2004, in the sense of a sudden perception in what was a gradual process, that did not detract from the seriousness of what was already apparent in 2003 which the claimants or their brokers should have notified to the defendant. On the evidence, it was apparent that notice had not been given by the claimant in 2 004.

Markerstudy Insurance Company Ltd and others v Endsleigh Insurance Service Ltd (QBD) 18/2/10

Wed, 24 Mar 2010 20:04:16 GMT

The first claimant was an insurance company writing motor business. Two claimants used to be in the same business until they went into voluntary run-off. The defendant provided administration and claims handling services to the claimants. Between 2001 and 2006 the parties entered into five contracts. The claimants alleged widespread breaches of claims handling agreements and contended that they had suffered six categories of loss in the region of £14 million. The Court ruled on four preliminary issues regarding the construction of the limitation of liability clauses and entitlement to interest on damages. The particular clause in question had to be construed on its own terms. There was nothing in the factual background at the time of the execution of the agreement that threw any light on the intention of the parties. The specified heads of loss, such as loss of good will and pure economic loss, were but examples of the included indirect loss. The defendant was only exempted from liability for indi rect or consequential loss.

Goldsmith Williams (a firm) v Travelers Insurance Company Limited (QB) 26/1/10

Wed, 24 Feb 2010 23:14:48 GMT

The Claimant was a firm of solicitors who had acted for the lending bank in two mortgage transactions. The sums advanced were never used to purchase the intended properties. On the first transaction the sum was to be borrowed by a partner of a law firm and the firm had acted on his behalf. In the second transaction it was that partner’s wife who had sought to borrow the monies to purchase another property from the partner. The Claimant was pursued by the lending bank and settled the claim against it for the sums stolen. The Claimant in turn received an assignment from the lending bank of its claims against the assured law firm which by then had been struck off the Register of Companies after an intervention by the Law Society. The Claimant proceeded against the defendant firm on the basis of the assignment and its entitlement to a contribution under the Civil Liability Contribution Act 1978. Having obtained judgment the Claimant brought a claim against the fraudulent partner’s law firm’s in surers under the Thirds Parties (Rights Against Insurers) Act 1930. Insurers denied liability on the basis of an exclusion clause in respect of claims arising from dishonesty or fraudulent acts. The other director of the firm had witnessed the signature of the fraudulent director on the mortgage application and certified a copy of his passport. However alone that was insufficient to establish that she had condoned her fellow directors’ fraud. However when considered against the backdrop of serial mortgage frauds perpetrated by the other director to which she had also been complicit and her own mortgage applications which contained false information and indicated her involvement in mortgage frauds meant that she should be taken to have condoned the relevant fraud.

Global Process Systems Inc and Another v Syarikat Takaful Malaysia Berhad (CA) (17 December 2009)

Thu, 04 Feb 2010 16:00:51 GMT

The Court of Appeal overturned a decision concerning the issue of proximate cause of loss. The first instance decision supported the insurer’s argument that the proximate cause of the loss of the legs of an oil rig while being towed from Texas to Malaysia was “inherent vice” and thus excluded from the “all risks” cover. The claimant insured argued that the loss was accidental and not inevitable and should be covered under the policy, and that the proximate cause was inadequate repairs carried out mid-tow. The Malaysian insurer argued that the proximate cause was the inherent vice in the inability of the legs to withstand the ordinary incidents of the voyage, meaning the loss was excluded from cover, or alternatively, that the loss was an inevitable consequence of the voyage embarked upon. The insured appealed the decision, querying whether the Commercial Court had applied the correct test for determining proximate cause. The Court of Appeal, allowing the appeal, held that a wide test had been applied at first instance: absent exceptional weather being shown to have occurred, the loss must have been attributable to inherent vice. The correct test was narrower in its scope. In considering whether damage was caused by inherent vice, an inability to withstand the ordinary incidents of the voyage was not answered by reference to what might be reasonably foreseeable as the ordinary incidents of that voyage, but by any event which would be bound to occur as an ordinary incident. On the facts, metal fatigue (i.e. the inherent vice) was not the sole cause of the loss of the legs and a leg breaking wave which was not bound to occur in the way that it did as a normal incident of the voyage in question, caused the starboard leg, followed by the other legs, to break off. Even though it was highly probable with the benefit of hindsight, this high probability was unknown to the insured and was an external fortuitous event. Therefore the loss was covered.

In the matter of London Authorities Mutual Ltd (ChD) (16 December 2009)

Thu, 04 Feb 2010 16:00:00 GMT

Provisional liquidators of a mutual insurance company were permitted to deploy some of the company’s funds to purchase retrospective insurance cover for the period during which some of its participating members had not been permitted to subscribe to the company as local authorities.

Cavell & Anr. v Seaton Insurance Co & Anr. (CA) (16 December 2009)

Thu, 04 Feb 2010 15:55:59 GMT

A compromise agreement between insurers and run-off agents following a dispute as to the conduct of the run-off excluded any claims in respect of fraud and provided for the exclusive jurisdiction of the English courts. Claims relating to breach of contractual and fiduciary obligations if amounting to fraud were to be brought in the English courts. Fraud was not to be limited to the common law action of deceit and extended to at least some cases of dishonest abuse of fiduciary position.

Sulaman v Axa Insurance Plc & Anor [2009] EWCA Civ 1331 (11 December 2009)

Tue, 29 Dec 2009 23:10:06 GMT

This was an appeal on costs that arose from a fraud practised on Axa Insurance by a number of persons who insured genuine cars against third party fire and theft. An initial instalment premium was paid and a direct debit system set up but soon after the inception of the insurance, the fraudsters claimed that the car had been involved in an accident for which the owner was to blame. There was therefore an innocent (but usually fictitious) victim who had a claim which was bound to succeed against the driver, who was himself sometimes fictitious and sometimes genuine but unaware that proceedings were to be taken against him. Claims for repairs, hire charges and such like would be made by a claims management firm and those claims would be paid by the insurers to the claims management firm or as that firm directed. When the insurers realised what was happening they refused to pay further claims; the persons whose cars had been supposedly insured began to bring actions to recover sums for which the car owners w ere supposedly liable. The insurers sought to recover all the sums they had paid out in consequence of the false claims. Six persons were joined, including Ms Sulaman. She had lied to the Court and, even though successful in her case, the trial judge only ordered that she receive one third of her costs. Ms Sulaman appealed. The Court of Appeal held that in the circumstances of the case, the judge had been entitled to make the order that he had. In light of Ms Sulaman's lies, the judge had been entitled to make an order depriving her of some part of the costs she would have otherwise recovered. The appeal was dismissed.

AC Ward & Son v Catlin (Five) Ltd & Ors [2009] EWCA Civ 1098 (10 September 2009)

Tue, 29 Dec 2009 23:08:55 GMT

The insurer provided content insurance for the claimant's wholesale distribution warehouse. The contents insured were cigarettes, tobacco and alcohol. Endorsement 6 of the insurance policy stated that theft cover in respect of the stock of cigarettes and tobacco was not operative outside of business hours unless the stock was kept within the special secure store on the ground floor. However, a significant amount of the claimant's insured goods were stored on the mezzanine floor and therefore under endorsement 6 would not be covered at weekends. The parties agreed that endorsement 6 would be removed subject to the claimant putting in place risk improvement requirements. The policy also contained two warranties: a protection maintenance warranty and a burglar alarm maintenance warranty. On 18 March 2007, burglars stole about £440,000 worth of cigarettes and tobacco from the secured area on the mezzanine floor. At the time of the burglary the alarm system was deficient and the motion detectors had been angled incorrectly. The insurers resisted liability on the grounds that the claimant had been in breach of the warranties before the loss occurred and, therefore removal of endorsement 6 could be avoided for material non-disclosure and/or misrepresentation on the basis that the claimants had not complied with all the risk improvement requirements. On a claim for indemnity against the insurers, it was held that the claimant was only in breach of warranties if there was some defect in the particular protection or the burglar alarm system, of which the claimant had become aware or should reasonably have become aware and had then failed to remedy promptly. The insurers appealed on the basis that breach of the warranties had occurred. The Court of Appeal dismissed the appeal and held that the insurers’ interpretation of the warranties were draconian and that the more unreasonable or draconian the effects of insurance terms were, the more clear and specific they had to be. Accordingly, the warranties and th eir effects can only be determined at trial having regard to the facts.

Dhami & Anor v Lloyds TSB General Insurance Ltd [2009] EWCA Civ 1326 (09 December 2009)

Tue, 29 Dec 2009 23:07:15 GMT

On 28 October 1999 the claimants, Mr and Mrs Dhami, took out a building and contents insurance policy relating to their home with the defendant. The insurance policy was renewed each year and on renewal questions asked included whether anyone normally living with them had ever been convicted of any criminal offence other than a motoring offence. Mr and Mrs Dhami answered in the negative. On 15 March 2004, the property was damaged by fire to the garage and a claim was made. At the time of the fire, the property was occupied by their sons. One of the sons had a number of criminal convictions. The claim was rejected. The claimants commenced proceedings against the defendant on the basis that they had no knowledge of their son’s criminal record. The case was dismissed as the non-disclosure was material. On appeal, Mr and Mrs Dhami attempted to introduce fresh evidence, but it was rejected as falling foul of the three Ladd v Marshall principles. The appeal was dismissed.

Equitas Ltd v R&Q Reinsurance Company (UK) Ltd [2009] EWHC 2787 (Comm) (11 November 2009)

Thu, 03 Dec 2009 17:26:11 GMT

Although actuarial models were complex, expensive, imperfect they were capable of permitting the Court to draw conclusions with confidence and to the appropriate standard of proof of the recoverable losses for each syndicate. The effect of Hill v Mercantile & General Reinsurance Co Plc did not require the court to conclude that a Claimant could not succeed unless it could present correctly aggregated losses upwards through the London Market Excess of Loss spiral.

Axa Insurance Ltd v Akther & Darby Solicitors & Anr (CA) (12 November 2009)

Thu, 03 Dec 2009 17:24:48 GMT

A cause of action relating to insurance policies issued without proper vetting was not a case of contingent liability. There was measurable relevant loss additional to the incurring of purely contingent liabilities under the policies of insurance on the inception of the policies in that any valuation of the policies at that time would have to take into account the assumed fact that there had been no proper vetting. Loss was suffered as soon as the insurance was issued.

Van Eyck (a firm) v Norwich Union Insurance Limited (Comm) (29 October 2009)

Thu, 03 Dec 2009 17:21:00 GMT

Following multiple claims made against a two partner law firm alleging monies had been paid out of the client account in respect of property transactions that had not completed, the firm’s professional indemnity insurers applied to inspect all documents now held by the Law Society after its intervention in the firm. The application was refused. An insurer of solicitors was not by provision of such professional indemnity insurance elevated to the same position of the Law Society in its entitlement to access documents. The application’s purpose was to determine whether or not insurers could avoid providing an indemnity to the firm on the grounds that both were complicit in the fraud. Access should only be permitted to those internal documents where claims have arisen and privileged or confidentiality do not arise. If a case involves fraud then that may override the rights of privilege or confidentiality. Similarly the Law Society was not in any way bound by the contractual obliga tion of the firm to deliver up documents to insurers.

Quinn Direct Insurance v The Law Society (Ch) (23 October 2009)

Thu, 03 Dec 2009 17:20:20 GMT

R&R Developments Ltd v AXA Insurance UK Plc [2009] EWHC 2429 (Ch) (28 September 2009)

Mon, 02 Nov 2009 11:37:56 GMT

Where a question on a proposal form was genuinely ambiguous, an answer to the question which on one construction was true would be sufficient for the assured even if the assured had not understood the question in that way when answering it. The contrary view expressed in Clarke, Macgillivray and Colinvaux that the subjective understanding of the assured was relevant was not supported by the authorities referred to.

Okretowe v Rallo Vito & C. Snc & Anr [2009] EWHC 2249 (Comm) (14 September 2009)

Wed, 28 Oct 2009 11:51:22 GMT

The owners of a tug boat used in the rescue of a vessel of the coast of Italy sought to bring proceedings for a declaration of non-liability against the vessel’s owners and its insurers. No formal written agreement was concluded, but the tug owners contended that the TOWHIRE terms including an English jurisdiction were incorporated and bound the vessel’s owners and its insurers because the latter had agreed to fund 80% of the hire charges. The Court found that the TOWHIRE terms were incorporated but did not bind insurers because they had never been a party to the hire contract.

Lockheed Martin Group v Willis Group Ltd [2009] EWHC 1436 (QB) (09 June 2009)

Wed, 28 Oct 2009 11:48:49 GMT

Where the Claimants had identified the wrong company in the Willis Group in its Claim Form, its post limitation application to substitute was not permitted because the identity of the intended Defendant was not clear on reasonable enquiry from the claim form or draft Particulars of Claim. Even if it had been the amendment would not have been permitted as a matter of discretion because of various factors including the significant delay.

AC Ward & Son v Catlin (Five) Ltd & Ors [2009] EWCA Civ 1098 (10 September 2009)

Wed, 28 Oct 2009 11:46:45 GMT

Following a burglary claim, insurers declined liability on several grounds relating to security protection measures. The policy contained a burglar alarm warranty and a protection and maintenance warranty. The burglars had disturbed a vibration detector but it had not activated the alarm and the remote CCTV monitoring station had not received any footage of the incident. Insurers asserted that on the proper construction of the contract the warranties were suspensive conditions or terms limiting the risk so that there was no cover during any period of non-compliance. On insurers’ application for summary judgment, at first instance the Court held that the terms were to be considered as warranties and not conditions because among other things that was the way they were described in the policy. On appeal the Court held that insurers’ interpretation was draconian and that a full trial was required to construe the terms contained in the warranties and their effects and also because the warranties c ontained standard terms that might affect other policy holders.

Lexington Insurance Company (Respondents) v AGF Insurance Limited (Appellants) and one other action; Lexington Insurance Company (Respondents) v Wasa International Insurance Company Limited (Appellants) and one other action, [2009] UKHL 40

Thu, 03 Sep 2009 12:51:06 GMT

The issue in this case is whether certain financial consequences can be passed by an American insurer, Lexington Insurance Company (“Lexington”), to two London reinsurers, Wasa International Insurance Company Limited (“Wasa”) and AGF Insurance Limited (“AGF”).

Lexington insured Aluminum Company of America (“Alcoa”) and its subsidiary, Northwest Alloys, Inc. (“NWA”) under an American “all risks difference in conditions” (“DIC”) property damage insurance policy issued for the period from July 1977 to July 1980. Under this policy, Lexington paid Alcoa and NWA some US$103 million in respect of environmental damage to property. It paid this sum in settlement of an even larger potential liability flowing from a decision of the Supreme Court of Washington. That decision exposed Lexington to liability to Alcoa and NWA for contamination occurring at particular sites over periods much longer than the three year policy period. Wasa and AGF had a 2½% line on a London market slip reinsuring Lexington for the three year period. They maintained that, whatever the position under the insurance, the reinsurance as a matter of construction only covered property damage occurring during that period.

The issue in short is whether the English law reinsurance mirrors or follows the American insurance, so as to oblige Wasa and AGF to pay their relevant percentages of what Lexington have paid.

The House held that the “full reinsurance” clause and the “follow the settlements” clauses in general, did not and do not have the effect of bringing within the cover of a policy of reinsurance risks that, on the true interpretation of the policy, would not otherwise be covered by it. As per Lord Phillips of Worth Matravers, “Did the parties to the reinsurance implicitly agree that whatever law might be applied to interpretation of the primary cover, and whatever result this might produce, would apply equally to the reinsurance?” If yes, the contract of reinsurance would effectively be treated as one to indemnify the primary insurer in respect of any liability sustained under the primary cover. There might, as the original judge considered, be much to be said for adopting this approach. However, those who, in 1977, were party to this reinsurance did not do so.

The House unanimously allowed the appeal.

Copley v Lawn & Ors [2009] EWCA Civ 580 (17 June 2009)

Thu, 06 Aug 2009 15:08:34 GMT

The claimant's car was damaged in a road accident and the claimant wished to hire a replacement. The Court of Appeal held that a claimant who unreasonably rejected or ignored a defendant's offer of a replacement car did not forfeit his damages claim altogether but was entitled to recover at least the cost which the defendant would reasonably have incurred.

Wilkinson v Fitzgerald & Anor [2009] EWHC 1297 (QB) (11 June 2009)

Thu, 06 Aug 2009 15:06:51 GMT

The claimant was the insured and a named driver on his mother’s policy of insurance. The claimant allowed a friend, the first defendant, to drive the car even though he knew that he had been drinking and was not insured to drive the car. His friend crashed the car causing serious injuries to all. The claimant obtained judgment against his friend and the insurer accepted that it was liable to indemnify the friend’s liability to the claimant by virtue of the provisions of s.151(5) of the Road Traffic Act 1988. The insurer however claimed to be entitled to recover all such sums from the claimant pursuant to s.151(8) of the Road Traffic Act 1988 given his consent to the activities that had led to the injury. The Court of Appeal found for the Claimant. The obligation under s.151(5) to make a payment satisfying a judgment should be applied in a substantive and not just a formal sense. The reference in s.151(8) to recovery from "any person who ... is insured by the policy" could no t be construed narrowly so that it meant only the policyholder. As a matter of the interpretation of the provisions of s.151 as a whole, and taking into account relevant Council Directives (EEC 84/5 & EEC 52/166), the insurer's right of recovery under s.151(8) could not be applied in such a way as to negate the insurer's obligation under s.151(5) to pay to someone entitled to the benefit of a judgment the sum payable under that judgment by circuity of action.

Seele Austria GmbH & Co Kg v Tokio Marine Europe Insurance Ltd [2009] EWHC 2066 (TCC) (06 August 2009)

Thu, 06 Aug 2009 14:12:00 GMT

The Court of Appeal had previously held that the claim under a contractors combined policy by the negligent sub-contractor for rectification of window works and associated access succeeded only in respect of the associated access works and not in rectifying its own works. As the fault lay in workmanship rather than a design or manufacturing defect each claim for each window was a new occurrence for the purposes of the excess under the policy. In subsequent proceedings the Claimant identified 31 stone clad windows in which the access work costs were sought. However by way of its Reply the Claimant changed the identity of the windows to 31 different brick clad windows. The Defendant succeeded in its application at trial that the claim should not be permitted to continue on the basis that the claims in respect of these different windows were new claims and were now statute barred and they did not arise out of the same facts as those in respect of the other 31 stone clad windows. The judge found in the alternative that he would not exercise his discretion to amend on the basis of the possible limitation defence, the delay since the information was available, wasted time and costs and other matters.

Lexington Insurance Co v AGF Insurance Ltd [2009] UKHL 40 (30 July 2009)

Thu, 30 Jul 2009 14:10:00 GMT

Under English law a contract of reinsurance in relation to property is a contract under which the reinsurers insure the property that is the subject of the primary insurance for the period of the cover; it is not simply a contract under which the reinsurers agree to indemnify the insurers in relation to any liability that they may incur under the primary insurance. Thus even where a contract of reinsurance contained a ‘full reinsurance’ clause and a ‘follow the settlements’ clause it would not extend reinsurers’ liability to pre and post cover periods of insurance even where a judgment on this basis has been made against primary layer insurers.

Knight v Axa Assurances [2009] EWHC 1900 (QB) (24 July 2009)

Fri, 24 Jul 2009 14:07:00 GMT

The assessment of damages in a personal injuries claim brought in the English courts was to be assessed in accordance with English law principles because it was a procedural matter. The issue was one arising out of a tortious claim and the fact that the accident took place in France, the tortfeasor was French and the action was brought direct against the tortfeasor’s French domiciled insurers pursuant to a French law did not change this to a quasi-contractual claim. By contrast a claim for interest on damages pre-judgment should be characterised as a substantive issue and was therefore subject to the relevant applicable law governing the issues as to the right to interest. The rate of interest is then to be determined by the lex fori, and is subject to the discretion under s. 35A of the Supreme Court Act.

Markel International Insurance Co Ltd v Higgins [2009] EWCA Civ 790 (23 July 2009)

Thu, 23 Jul 2009 14:03:00 GMT

The finding that the director had conspired with others to defraud insurance companies by writing policies for levels over the binder limits and retaining the excess premium generated was open to him even though the director was at the time suffering from Alzheimer’s disease. His actions particularly in the light of his own evidence could not be explained by intermittent forgetfulness.

Dornoch Ltd & Ors v Westminster International BV & Ors [2009] EWHC 1782 (Admlty) (17 July 2009)

Fri, 17 Jul 2009 14:06:00 GMT

The underwriters and insured disputed the realisation of the value of a vessel that had become a constructive total loss as a result of a collision. The vessel had been salvaged and towed to a dockyard. The primary and excess level underwriters paid an indemnity to the insured and the majority (but not all) of the primary layer underwriters elected to take over the vessel. The insured caused the registration of the vessel to be removed from the Dutch register and sold the vessel to a related company for a nominal sum. A dispute arose as to the interests of the underwriters in the sale proceeds. The applicable law was Thai law under which the excess underwriters had not acquired a proprietary interest in the vessel before its sale. The other underwriters had acquired a beneficial interest. It was clear that the sale at a nominal value had been designed to prejudice underwriters’ interests and that the transaction was at an undervalue. The jurisdiction under the Insolvency Act had no territorial limits and there was ample connection with England. The Court ordered the current owner of the vessel to transfer it to the excess underwriters’ nominee for sale.

Bell Taverns (Scotland) Ltd v. The National Insurance and Guarantee Corporation Limited [2009] CSOH 69

Wed, 20 May 2009 09:51:00 GMT

On 4 September 2006 a fire caused significant damage to a hotel in Perthshire which was owned by the pursuers. The pursuers held a contract of insurance issued by the defenders which made provision for loss and damage caused by fire. A dispute arose between the parties as to the amount to which the pursuers were entitled under that policy. At debate two issues arose in relation to the construction of the policy:- (1) the meaning of the average provision; and (2) the provision imposing a limit on the liability of the defenders. The disputes in relation to the average clause concerned:- (a) whether the average clause applied to claims in relation to the three extensions, namely the costs imposed by public regulations, the professional fees and the costs of demolition and removal of debris; and (b) the denominator, namely what were the total costs of reinstating the whole of such property? In relation to the dispute on the application of the limit of liability the issue was whether the limit of liability contained in the policy applied only to the costs actually incurred in reinstating the building or did it apply to the aggregate of those sums and claims in respect of expenditure on the matters referred to in the extensions? Here the court considered the questions posed by parties in relation to the construction of the insurance policy.

Dunlop Haywards (DHL) & Anor v Erinaceous Insurance Services Ltd & Ors [2009] EWCA Civ 354 (28 April 2009)

Mon, 27 Apr 2009 23:00:00 GMT

In a claim against insurance brokers for negligence and breach of contract for failing to obtain the policy it was supposed to, one of the insurance brokers’ defences was that the client had suffered no loss because the policy obtained could be rectified. Another defence was based on the construction of the policy. The insurance brokers sought to join the excess layer underwriters to the claim. Underwriters opposed their joinder on the basis that the claims were so weak that in the terms of CPR 19.2 (2) it was not ‘desirable’ to join them. In considering rectification in insurance the preparation of the policy itself from the slip was often a matter of administration and the focus of enquiry for continuing common intention is up to the time of making the slip. Similarly where the essential terms are agreed in a signed quotation sheet and/or FON and the preparation of the slip is itself administrative focus on the earlier period is required. As there were materials supportive, contrary and equivocal the matter needed to be resolved at trial and it would be appropriate to join underwriters. Whether a Defendant could raise by way of defence the issue of rectification of a contract to which it was not party was left open, the issue not having been taken by the Claimants or underwriters.

Temple Legal Protection Ltd v QBE Insurance (Europe) Ltd [2009] EWCA Civ 453 (06 April 2009)

Sun, 05 Apr 2009 23:00:00 GMT

The issues arose out of the provision of ATE insurance by QBE. Under a binder, QBE authorised Temple to enter in to cover-holder agreements between Temple and solicitors whereby the latter could issue certificates of ATE insurance to clients. Because of the continuing underwriting nature of ATE insurance after inception and the deferred payment of the premium the responsibility for run-off of the policies after termination of the binder became an issue. On construction of the contractual arrangements Temple was not a party to any particular contract of insurance. Although Temple was required to continue performing certain of its obligations under the binder, including management of the claims, that did not give it a right to do so. That would be inconsistent with the nature of the relationship whereby Temple was an agent and therefore fiduciary. Once the loyalty on which such an appointment was based had ended it would be odd without express words for the parties to have agreed that Temple could continue to act as of right.

Global Process Sytems Inc & Anor v Syarikat Takaful Malaysia Berhad [2009] EWHC 637 (Comm) (31 March 2009)

Mon, 30 Mar 2009 23:00:00 GMT

The claimant assured, GPS, claimed against the defendant insurer Syarikat Takaful in respect of the loss of three legs of a ‘jack-up’ rig which was being towed on a barge from Texas to Malaysia. The rig was a self elevating ‘jack-up’ rig consisting of a working platform which could be jacked up and down according to the sea depth at the in-service location. The issue to be determined was the proximate cause of the loss of the legs of the rig while being towed from Texas to Malaysia. The voyage was covered under a policy of marine insurance underwritten by a Malaysian company providing 'Takaful' insurance, which is based on Islamic principles. The policy incorporated the Institute Cargo Clauses (A) of 1 January 1982 and provided cover for “all risks”, subject to specified exclusions, including “inherent vice”. The claimant owners of the rig argued that the loss was accidental and not inevitable, and so within the terms of the “all risks” cover, and that the proximate cause was inadequate repairs carried out mid-tow. The defendant insurer argued that the proximate cause was the inherent vice in the inability of the legs to withstand the ordinary incidents of the voyage, meaning the loss was excluded from cover, alternatively, that the loss was an inevitable consequence of the voyage embarked upon. The claim was dismissed. The court held that it was clear from the expert evidence that the legs did not have sufficient inherent fatigue life to complete the tow and the legs of the rig suffered extensive cracking on the first part of the voyage.It is well established that insurers can rely on inevitability of loss to decline to pay a claim. Insurance is about risks, not certainties and the words “all risks” do not cover all damage however caused, such as damage as a result of inevitable ordinary wear and tear and depreciation. The question of inevitability must be judged at the point of inception. On the evidence, the failure of the rig legs was very probable, but it was not inevitable. Therefore, subject to any relevant exclusion, the loss was within the scope of cover. In deciding the proximate cause of the loss, the test to be applied is essentially one based on the common sense of the ordinary businessman or seafarer. As a matter of common sense, the rig legs failed not because of the repairs, but despite them. The defendant insurer had successfully proved that the proximate cause of the loss had been the inherent vice in the inability of the rig legs to withstand the normal incidents of the voyage. The loss therefore fell within the “inherent vice” exclusion clause and the claim failed.

Youell & Ors v La Reunion Aerienne & Ors [2009] EWCA Civ 175 (11 March 2009)

Wed, 11 Mar 2009 12:52:00 GMT

A dispute arose between London market insurers and French market insurers in respect of liability of the London market to contribute to a settlement entered in to by the French market. The French market commenced arbitration proceedings in Paris against the London market for a contribution to the settlement. The London market applied to the English courts for a declaration of non-liability under an alleged mandate to compromise the underlying claim whose existence the London market denied. The French market challenged the English courts’ jurisdiction on the basis of the derogation for arbitration in Article 1 (2) (d) of the Brussels I Regulation. The French market’s application was refused because when the substance of the London market’s case was analysed the underlying disputes were not claims covered by the arbitration exclusion which arose in the underlying company policy. In such a situation the options available for the French market were to seek a stay under section 9 of the Arbitration Act 1996, to defend the case on its merits or to ignore the proceedings. Each would have also faced its own difficulties.

Direct Line Insurance Plc v Fox (QB) 10 March 2009

Tue, 10 Mar 2009 12:53:00 GMT

Insurers who entered an agreement with an assured in respect of a fire claim were unable to recover monies paid out by way of an interim payment when subsequently the assured dishonestly sent a VAT invoice in support of a final payment under the agreement because the purpose in sending the forged document was not to establish an element of claim under the policy as in Britton v Royal Insurance but rather to assert that a condition precedent in the agreement had been satisfied. The agreement to compromise the claim was a separate agreement to the insurance contract and the duty of utmost good faith did not apply.

Porter v Zurich Insurance Company [2009] EWHC 376 (QB) (05 March 2009)

Thu, 05 Mar 2009 12:49:00 GMT

Where an assured started a fire to his own property his claim under the policy would fail on its terms and for reasons of public policy unless he could prove on the balance of probabilities that he was insane within the meaning of the M’Naughten rules at the time he started the fire. Subsequent breaches of the co-operation clause for late notification in respect of additional theft claims would not prevent recovery unless insurers could prove that had they been able to investigate the claims would have rejected or that it was impossible now to investigate the claims.

Hamishmar Insurance Agency Ltd & Anr v Firstcity Partnership Ltd (Comm) 20/2/09

Fri, 20 Feb 2009 00:00:00 GMT

After underwriters audited the cover-holder’s records, they brought a claim for breach of contract. The cover-holder compromised this on the basis that the binders would be commuted with underwriters meeting 100% of claims paid and 70% of all outstanding claims. The cover-holder then sought to recover its costs of dealing with the audit and the claim from its Lloyd’s Broker whom it alleged had mishandled business written under the binders. By way of Defence and Counterclaim the Lloyd’s Broker alleged that it had funded nearly US$500,000 of premia due to underwriters on behalf of the cover-holder. This issue was referred to an expert accountant for determination. In a dispute as to that determination the Court held that the scope of the expert’s reference was to be determined by the letter of instruction and that the letters between the parties leading up to that letter were negotiating positions.

Ansari v New India Assurance Ltd [2009] EWCA Civ 93 (18 February 2009)

Wed, 18 Feb 2009 00:00:00 GMT

Confirming in an insurance proposal form that premises were protected by an automatic sprinkler system was a representation not just that the building was fitted with the system, but that it was functioning and capable of operating. A sprinkler system is intrinsically different to an intruder alarm in that it is intended to function permanently without the need for human intervention. Thus turning off the system altered the facts on which the insurance had been underwritten unless the system was turned off temporarily for service or repairs. So too did the change of business run from the property from the sale of kitchenware to saddles, harnesses, scooters and mini-motorbikes. In determining whether those changes of fact were material a different test to that in Pan-Atlantic v Pine Top was appropriate because the change arose during the currency of the policy. To be material after inception within the meaning of the notification clause the change must significantly affect the risk or to take the risk outside what was in the reasonable contemplation of the parties at the time the policy was issued.

Seele Austria GmbH Co v Tokio Marine Europe Insurance Ltd [2009] EWHC 255 (TCC) (17 February 2009)

Tue, 17 Feb 2009 00:00:00 GMT

An application to amend Particulars of Claim after issues on liability had been determined to introduce a policy construction point was not permitted on the basis that the issue had either been determined in the liability trial or, if it had not, it should have been.

Greene Wood & McLean LLP v Templeton Insurance Ltd [2009] EWCA Civ 65 (12 February 2009)

Thu, 12 Feb 2009 00:00:00 GMT

There was an arguable case that a contract by which solicitors could make clients parties to an ATE policy contained an implied term that the insurer would meet valid claims under the policy and that the solicitors could recover sums paid out under guarantees to the clients under the policy. For the purposes of service out of the jurisdiction a claim ‘in respect of a contract’ does not require both Claimant and Defendant to be parties to the contract as the White Book rules suggest. Under the 1978 Contribution Act the liability of solicitors to their clients pursuant to an undertaking that they would not be liable for costs was the ‘same damage’ as the loss the clients suffered in respect of their costs liability to third parties in consequence of the failure by insurers to pay for the same. It did not matter that the solicitors might also have become liable for the same sums through negligence.

Bedfordshire Police Authority v Constable [2009] EWCA Civ 64 (12 February 2009)

Thu, 12 Feb 2009 00:00:00 GMT

In a public liability policy cover for ‘damages’ including liability for compensation payable by the police authority caused in a riot. It extended to more than just tortious or quasi-tortious liability and applied to contractual and statutory liability where a party’s responsibility was engaged. Although the police authority had not caused the damages for which compensation was claimed and its liability arose irrespective of fault it derived from the police authority’s responsibility to keep the peace. The qualification that the liability to damages should arise out of the business of the police authority did not exclude liability for compensation caused by a third party rioting. The liability arose as a result of the sums which the police authority became liable to pay in the course of its business.

Dornoch Ltd & Ors v Westminster International BV & Ors [2009] EWHC 201 (Admlty) (12 February 2009)

Thu, 12 Feb 2009 00:00:00 GMT

In a dispute between excess layer insurers and the insured as to the rights to the insured property after a constructive total loss the joinder of the primary layer insurers was not necessary or desirable where a trial was imminent and there was no reason why the primary layer insurers would not agree to be bound by the decision. That the primary layer insurance was subject to an exclusive Dutch jurisdiction clause did not fall for decision.

Tarn Insurance Services Ltd v Kirby & Ors [2009] EWCA Civ 19 (27 January 2009)

Tue, 27 Jan 2009 00:00:00 GMT

The company’s administrators sought to recover sums paid over to its alleged de facto directors on the basis of alleged breaches of fiduciary duty. One of the defendants gave an undertaking to administrators to provide information and documents, but did not comply with it. A freezing injunction was obtained together with an order requiring disclosure in default of which his defence was to be struck out. The defendant failed to comply and sought successfully relief from sanctions. On appeal the Court of Appeal provided guidance as to the assessment of relief from sanctions and identified the correct test as being whether the unless order remained a proper order in the circumstances at the time of the application for relief. In the absence of any change in circumstances and given the gravity of the failure of the defendant to comply it remained so.

Sun Life Assurance Company of Canada (UK) Ltd v HM Revenue & Customs [2009] EWHC 60 (Ch) (20 January 2009)

Tue, 20 Jan 2009 00:00:00 GMT

The issue in this case was whether Sun Life Assurance, as a company which carried on basic life assurance and general annuity business, pension business and permanent health insurance, was entitled to deduct unused losses in making its computations of profit for tax purposes under s.89 of the Finance Act 1989, which states that the policy holders' share of the relevant profits for an accounting period of a company carrying on life assurance business or, as the case may be, basic life assurance and general annuity business are references to the amount arrived at by deducting from those profits the Case I profits of the company for the period in respect of its life assurance business… Section 393 of the Income and Corporation Taxes Act 1988 states that where in any accounting period a company carrying on a trade incurs a loss in the trade, the loss shall be set off for the purposes of corporation tax against any trading income from the trade in succeeding accounting periods; and (so long as the company continues to carry on the trade) its trading income from the trade in any succeeding accounting period shall then be treated as reduced by the amount of the loss). It was held that s.393 of ICTA 1988 did not have any application to s.89 of the 1989 Act. Accordingly, for the purpose of determining the rates of tax applicable to the policy holders' share of profits in any given accounting period, Sun Life Assurance was not entitled in respect of that business (basic life assurance and general annuity business) to deduct unused losses in making its Case I computations of profit.

Jones v Environcom Ltd & Anor [2009] EWHC 16 (Comm) (16 January 2009)

Fri, 16 Jan 2009 00:00:00 GMT

Insurers of a recycling facility purported to avoid liability in respect of a fire claim on the basis of alleged non-disclosure of hazardous equipment and previous fires at the facility. Insurers issued proceedings for a declaration. The assured defended the claim and counter-claimed for an indemnity under the policy. Insurers then sought security for costs against the defendant. This was resisted on a number of grounds including the overlap in costs between the claim and counterclaim and the absence of any separate issue to be determined on the counter-claim. In making an order for security for costs the Court concluded that the claim and counter-claim were independent and that it was likely that even if the claim was discontinued that the counter-claim would be continued and that the costs for the purposes of an application for security for costs of a countercliam need not as a matter of law be confined to the counter-claim and there was no basis for limiting them to the additional costs of a counterclaim.

Allianz Insurance Company- Egypt v Aigaion Insurance Company SA [2008] EWCA Civ 1455 (19 December 2008)

Fri, 19 Dec 2008 00:00:00 GMT

Where the parties had agreed in negotiations that a particular warranty should be included in a reinsurance policy and through oversight it had been omitted in the final version of the slip sent for agreement by reinsurers, an e-mail from reinsurers in response which in accepting the slip referred to previous negotiations was an acceptance on the terms of the slip and was not a counter-offer. The issue of whether the contract could be rectified did not fall for consideration.

Reilly v National Insurance and Guarantee Corporation Ltd [2008] EWCA Civ 1460 (19 December 2008)

Fri, 19 Dec 2008 00:00:00 GMT

An endorsement which provided that a products liability extension to a Public Liability policy did not provide an indemnity in respect of any claim arising out of “the failure of any fire or intruder alarm switchgear control panel or machinery to perform its intended function” was to be construed disjunctively. The absence of commas separating the fire or intruder alarm and the subsequent words was inconclusive. While there clause was capable of being read in more than one way, it should not automatically be construed in favour of the assured and although its commercial object was not wholly clear, a failure in machinery or switchgear independent of a fire or intruder alarm would be excluded. However the incorrect filling or pressurisation of carbon dioxide cylinders or leakage from the valve was not a failure of machinery within the meaning of the endorsement.

Quantum Processing Services Company v AXA Insurance UK Plc (CA) 15/12/08

Mon, 15 Dec 2008 00:00:00 GMT

Where an assured had disclosed that he was going to undertake scuba diving to his insurers, once the insurer had accepted that activity as covered by the policy, the general conditions had to be read as covering that particular activity even though they excluded hazardous activities such as scuba diving.

Korea National Insurance Corp (KNIC) v Allianz Global Corporate & Speciality AG [2008] EWCA Civ 1355 (02 December 2008)

Tue, 02 Dec 2008 00:00:00 GMT

There is no general rule that if an allegation might embarrass a foreign sovereign it follows that will also embarrass diplomatic relations with the United Kingdom and that such issues are non-justiciable. The Court should not rule that allegations are non-justiciable on the basis of potential embarrassment to inter-state relations in the absence of some indication from the Foreign and Commonwealth Office that some such embarrassment might be caused to the relevant diplomatic relations.

Pratt v Aigaion Insurance Company SA [2008] EWCA Civ 1314 (27 November 2008)

Thu, 27 Nov 2008 00:00:00 GMT

A warranty in a marine insurance policy that the owner or experienced skipper would be on board and in charge ‘at all times’ did not apply when the vessel was moored applying the contra proferentem rule of construction or one the basis of the construction of the clause in context.

Durham v BAI (Run Off) Ltd and Others (QB) 21/11/08

Fri, 21 Nov 2008 00:00:00 GMT

An employer’s liability insurance providing cover for “injury sustained or disease contracted” on its true construction meant that the relevant insurer was liable under the policy if it was the relevant insurer at the time of inhalation of the asbestos fibres even if that did not cause an injury until a time after the insurer was no longer on cover.

Kallang Shipping SA Panama v Axa Assurances Senegal & Anor [2008] EWHC 2761 (Comm) (19 November 2008)

Wed, 19 Nov 2008 00:00:00 GMT

Insurers were held liable for procuring a breach of a third party agreement and for the damages suffered by the ship-owner while the vessel was arrested and detained by a foreign court. The time charter and voyage charter contained a London arbitration clause. This clause was expressly incorporated in to the bills of lading. On discharge in Dakar, the cargo insurer claimed that there was substantial damage and shortage and threatened arrest of the ship unless a bank guarantee was provided. In response to an offer from the shipowner’s P&I club to put up security the insurer obtained an order from the Sengalese court arresting the ship. The vessel was not released until the English court granted an anti-suit injunction and the club has issued a “competent court or tribunal” letter of undertaking. The shipowner alleged that in maintaining the arrest the recipient of the cargo was in breach of the arbitration clause and that the insurers had caused or procured that conduct and wrongfully induced or procured the breach of contract. The court found that the insurers were liable, being satisfied that the purpose of the arrest went well beyond obtaining security for a claim in England and it was to achieve Senegalese jurisdiction; that insurers were the driving force behind arresting the vessel; that insurers were well aware of the English arbitration clause; and their knowledge, conduct and intent were sufficient to make them liable.

Korea National Insurance Company v Allianz Global Corporate & Specialty AG [2008] EWHC 2829 (Comm) (18 November 2008)

Tue, 18 Nov 2008 00:00:00 GMT

The North Korean insurance company’s attempt to enforce a North Korean judgment against the defendant reinsurer was refused on the basis that it was non-justiciable because the reinsurer’s defence was based on allegations of fraud by the North Korean state which would embarrass the United Kingdom’s foreign relations.

Limit No 2 Ltd v Axa Versicherung AG [2008] EWCA Civ 1231 (12 November 2008)

Wed, 12 Nov 2008 00:00:00 GMT

The representation by brokers on a cover-sheet to the draft slip which said “As a matter of principle they … would not normally write construction unless the original deductible were at least £500,000 and preferably £1,000,000” was a statement of current practice and current intention of future practice, the latter of which was not on the evidence held. While the use by the judge at first instance of the word “current policy” was ambiguous in context it was clear he was referring to the syndicates’ then intention. It was not seriously arguable that a statement by brokers was merely a statement of opinion or expectation. However at renewal 19 months later that representation could not be said to be continuing.

HLB Kidsons (A Firm) v Lloyd's Underwriters Subscribing To Lloyd's Policy No 621/PK1D00101 & Ors [2008] EWCA Civ 1206 (05 November 2008)

Fri, 31 Oct 2008 00:00:00 GMT

In considering whether four presentations to insurers had been sufficient to bring subsequent claims within the strictures of a claims notification clause the Court of Appeal partially overturned the first instance judge. In particular the judge should not have rejected insurers’ concession that the second presentation was a limited notification. Although a claims bordereau could not extend a notification it could assist in its interpretation. The accompanying claims bordereau referring to “possible tax errors in fiscal engineering work” amounted to notification of circumstances on an objective reading. The presentation was a successful notification to the company market and not just the leading underwriters.

Markel Capital Ltd v Gothaer Allgemeine Versicherung AG & Anor [2008] EWHC 2517 (Comm) (24 October 2008)

Fri, 24 Oct 2008 00:00:00 GMT

For the purposes of a claims notification clause, the words “A as per B” where A was the reinsured and B the manager of a pool of insurers did not fix A with the knowledge of B for the purposes of time running under the claims notification clause.

American Reliable Insurance Company & Ors v Willis Ltd [2008] EWHC 2677 (Comm) (24 October 2008)

Fri, 24 Oct 2008 00:00:00 GMT

Willis had admitted various findings of fact made in earlier proceedings to which it was not a party on the basis that it felt constrained by the decision of that judge. It subsequently applied to withdraw its admission. Its application was refused save in respect of admissions relating to the honesty of a witness it would be calling in any event and on condition that Willis provided particulars of the materials to be relied on in demonstrating that the judge’s conclusion as to the witness’s honesty was misfounded.

Youell & Ors v La Reunion Aerienne & Ors [2008] EWHC 2493 (Comm) (22 October 2008)

Wed, 22 Oct 2008 00:00:00 GMT

The protection offered by the insurance jurisdiction articles in the Brussels Convention did not apply to disputes between insurers themselves even in respect of an assigned claim from a third party who would have benefited from them.

Whiteley Insurance Consultants (a/k As Kingfisher Travel Insurance Services), Re v [2008] EWHC 1782 (Ch) (25 July 2008)

Fri, 25 Jul 2008 00:00:00 GMT

The financial consultants had issued insurance policy documents on behalf of named or un-name underwriters without authority or where the underwriters did not exist. The liquidators sought directions from the Court as to how to deal with claims made by those clients who had been provided with such ‘insurance’. Before 14 January 2005 when insurance intermediaries were required to be authorised however it would have been a breach of the general prohibition under s. 19 of FSMA 2000 to issue a policy. As the intermediary had been acting as principal albeit ostensibly as agent it was issuing and performing contracts of insurance and carrying out a regulated activity. Therefore in respect of policies issued before 14 January 2005, the agreements were unenforceable against the ‘assured’ and the ‘assured’ was entitled under section 26 of FSMA to elect to recover any premium paid and compensation, subject to the Court’s discretion. In this instance as the policyholders were likely to have obtained alternative insurance no compensation equivalent to interest could be recovered on the premia. However for the period subsequent to 14 January 2005 when the intermediary was authorised, albeit not to issue policies, the Insurers Rules applied for valuing the amount of premium, if any, to be returned and that it did not matter that some policies contained an extension in terms of delay.

Kamidian v Holt & Ors [2008] EWHC 1483 (Comm) (18 July 2008)

Fri, 18 Jul 2008 00:00:00 GMT

In a claim on an art exhibition loan insurance the representations made on proposal as to the provenance of an antique clock were to be construed as reflecting the generally received opinion and not just the subjective belief of the assured. The nature of the assurance was fundamentally different to that in Economides. In addition the Claimant had failed to prove that he had any title in the antique clock.

Equitas Ltd v Allstate Insurance Company [2008] EWHC 1671 (Comm) (17 July 2008)

Thu, 17 Jul 2008 00:00:00 GMT

The application for a case management stay was refused because of an existing Texas arbitration between the Defendant and a third party. Where an exclusive English jurisdiction clause was present, the threshold for a case management stay required exceptional grounds particularly given that a jurisdictional stay was precluded by Regulation 44/2001 Articles 4 (1) and 23. There was minimal overlap between the proceedings; the involvement by the Claimant in the Texan proceedings was consistent with the usual business relationship of a quota share reinsurer; and a stay would cause prejudice by requiring the Claimant to intervene in the foreign arbitration proceedings or rely on the current parties with the risk that the Claimant would be held to be bound to the outcome of the arbitration as a privy and thereby indirectly subverting the principle in Owusu v Jackson.

Greene Wood & McLean v Templeton Insurance Ltd [2008] EWHC 1593 (Comm) (10 July 2008)

Thu, 10 Jul 2008 00:00:00 GMT

Where solicitors had settled their clients’ disbursements after they had advised that irrespective of the result the clients would not be liable for disbursements because of an ATE Policy they had no real prospect of arguing an implied term in the ATE policy that the solicitors could enforce the ATE policy. It was a contract between the client and insurers. It was arguable that a claim might succeed under the Civil Liability Contribution Act 1978 on the basis that although the damage was not contractual it was in respect of a contract and was the same damage.

Harris & Ors v The Society of Lloyd's [2008] EWHC 1433 (Comm) (01 July 2008)

Tue, 01 Jul 2008 00:00:00 GMT

In claims brought by names alleging deceit against Lloyd’s for the description of the effects of Reinsurance to Close when members joined the claims were struck out for abuse of process. They could and should have been brought in an earlier action by names against Lloyds. Additionally there was no real prospect of establishing deceit because there of the absence of evidence to show that Lloyds knew that the representations made were false and furthermore the claims were time barred as the facts relied on were reasonably discoverable more than six years before the issue of proceedings.

Bedfordshire Police Authority v Constable & Ors [2008] EWHC 1375 (Comm) (20 June 2008)

Fri, 20 Jun 2008 00:00:00 GMT

The police’s public liability policy which provided for cover in respect of all sums which they became legally liable to pay as damages for accidental damage to property arising out of the usual activities of the police included a claim by a third party for compensation under the Riot (Damages) Act 1886 against the police for destruction of property caused during a riot.

Mopani Copper Mines Plc v Millennium Underwriting Ltd [2008] EWHC 1331 (Comm) (16 June 2008)

Mon, 16 Jun 2008 00:00:00 GMT

Mopani constructed a new copper smelting facility in Zambia. There was to be a gradual handover of parts of the plants as they completed testing and commissioning. It had obtained construction all risks insurance from a Zambian insurance company with London reinsurance. Mopani sought clarification as to whether the reinsurance policy extended to operational risks. The reinsurance slip had been varied on a number of occasions. One version contained reference to operational risks cover both in the general description and within a condition. The reference in the condition section was later crossed out in part and “tba” added. In construing the slip the Court reviewed the authorities as to using deleted words as an aid to interpretation. It is generally illegitimate to do so unless the fact of deletion showed what the parties had agreed to and there was ambiguity in the words that remained. Even then care had to be taken as to what inferences could be drawn from those deleted words. On construction of the amended slip, the reference to operational cover had been part of a prospective means of providing additional operational cover that had not been needed. The policy did not extend to the completed elements of the project once they had become operational.

West London Pipeline and Storage Ltd & Anor v Total UK Ltd & Ors [2008] EWHC 1296 (Comm) (09 June 2008)

Mon, 09 Jun 2008 00:00:00 GMT

Disclosure: The Defendants sought disclosure of the insurance arrangements of the third party from whom they were seeking a contribution in respect of the Buncefield oil explosion. The existence and scope of insurance cover were not material to the issue of apportionment under the Civil Liability (Contribution) Act 1978 and in such circumstances the Court had no jurisdiction to require disclosure of the insurance position. Insurance policies were not disclosable under Part 31 as part of standard disclosure or otherwise.

Markel International Insurance Company Ltd v Surety Guarantee Consultants Ltd & Ors[2008] EWHC 1135 (Comm) (03 June 2008)

Tue, 03 Jun 2008 00:00:00 GMT

Fraud : Markel granted a binding authority to the Defendant to bind surety bonds to its account. The authority was terminated when Markel’s underwriter left and another insurer provided a new authority to the underwriter who in turn entered in to an underwriting management agreement with the Defendant for binding surety bonds. Both insurers alleged that the Defendant wrote bonds that exceeded the limits of the authorities and retained the extra premiums generated. The Defendants alleged that there had been a silent co-surety on the bonds which exceeded the financial limits so as to prevent insurers’ liability exceeding the authorised limits. The Court held that the bordereaux misstated the position; there had been a failure to account for premium; the Defendant was in breach of its fiduciary duty by making a secret profit and a director and employee of the Defendant were party to a conspiracy to defraud; were in breach of their fiduciary duties; were liable for procuring the breaches of the Defendant’s contract; and for committing the tort of conspiracy to injure by unlawful means

Lexington Insurance Company & Ors v Multinacional De Seguros SA (Rev 1) [2008] EWHC 1170 (Comm) (23 May 2008)

Fri, 23 May 2008 00:00:00 GMT

Claims Co-operation: Reinsurers were entitled to rely on subsequent breach of a claims co-operation clause even where they had previously repudiated liability for the underlying claim as a result of an earlier breach of the claims settlement clause. A claim was made under a property and business interruption claim by a Venezuelan company. Reinsurers took the view that the claim should be refused. Insurers considered otherwise and advise the assured of this. As a result reinsurers refused to indemnity insurers on the basis that they had breached the claims settlement clause. Reinsurers issued a claim form seeking a declaration of non-liability. Without prejudice to this stance reinsurers at the same time continued to discuss the settlement of the claim with insurers. Subsequently reinsurers took the view that the underlying claim was time barred. Again insurers disagreed and, without involving reinsurers, obtained a non-binding ruling from the Venezuelan Insurance Superintendencia that the claim was not time barred. Insurers then wrote to the assured indicating that reinsurers stance on the time bar issue was “legally incorrect” and their attitude “incomprehensible”. In fact the claim was time barred. Reinsurers sought to rely on these latter actions as a further breach of the claims settlement clause. Insurers argued that having repudiated liability for the claim on the basis of a breach of the claims co-operation clause reinsurers could not rely on a subsequent breach. The Court disagreed and held that at the time of initial repudiation reinsurers were not in the position of an election with mutually inconsistent rights and waiver did not arise. It made commercial sense for reinsurers to co-operate on a without prejudice basis in further investigations with insurers as they may have been wrong as to their right to repudiate. Thus reinsurers were entitled to rely on any subsequent breach of the claims settlement clause. The renunciation by insurers of the time-bar defence was a breach of the claims settlement clause and even if was still tenable insurers’ conduct amounted to a breach of the claims settlement clause.

Byrne (A Minor) v The Motor Insurers Bureau & Anor [2008] EWCA Civ 574 (22 May 2008)

Thu, 22 May 2008 00:00:00 GMT

Limitation: As the European Court had ruled that protection under the national scheme implementing Directive 84/5 had to be equivalent to that applying to insured drivers, children were entitled to bring claims against the MIB on the same basis as under the Limitation Act 1980 s. 28.

Seele Austria GmbH & Co KG v Tokio Marine Europe Insurance Ltd [2008] EWCA Civ 441 (07 May 2008)

Wed, 07 May 2008 00:00:00 GMT

In a majority judgment (Waller LJ dissenting) the Court of Appeal held that the scope of a contractors all risks policy was extended by a memorandum providing cover for intentional damage necessarily caused to insured property to enable the replacement repair or rectification of such insured property which was in defective condition. This was not conditional on damage being caused by the defective works to other property. The defective windows each represented a separate occurrence, being a series of occurrences not arising out of one event.

Scottish Coal Company Ltd & Ors v Royal and Sun Alliance Insurance Plc & Ors [2008] EWHC 880 (Comm) (28 April 2008)

Mon, 28 Apr 2008 00:00:00 GMT

The owners of a coal mine unsuccessfully attempted to mine through a roadway that bisected a panel being mined leading to a roof collapse. Insurers sought to avoid liability on the basis that this mining amounted to a material change in risk that had not been disclosed. The Court found that although there had been material non disclosure, by granting an extension with full knowledge of the potential for avoidance for non-disclosure underwriters had affirmed the contract. Insurers were not entitled to avoid on the basis that there had been a material change in risk - the cover afforded protection against all mining operations and although the new method of mining increased the risk it did not alter it.

Artibell Shipping Company Ltd. v Markel International Insurance Company Ltd & Ors [2008] EWHC 811 (Comm) (24 April 2008)

Thu, 24 Apr 2008 00:00:00 GMT

Abuse of Process: Where the assured had issued proceedings on the eve of the expiry of the limitation period and there had been an expectation that negotiations would follow the close of pleadings there was no basis for a finding that the assured had no intention of progressing a claim and thus the failure to fix a case management conference could not amount to an abuse of process. Where the extent of the delay meant that a trial of the action was unlikely to take place until twelve years after the date of the casualty then there was a real risk of it being struck out, however where the Defendant had not taken any action to restore the claim and was not materially prejudiced by the delay such an action would be disproportionate.

Temple Legal Protection Ltd v QBE Insurance (Europe) Ltd [2008] EWHC 843 (Comm) (23 April 2008)

Wed, 23 Apr 2008 00:00:00 GMT

Run-off: The legal expenses insurance agency was not entitled to conduct the run-off of the business after termination of an underwriting agency agreement after a deterioration in relations between the parties. Neither the binder nor the common law principles of agency precluded insurers from revoking such authority despite it putting the agency in potential breach of its contractual arrangements with coverholders as such agreements were to be construed as co-terminus with the underwriting agreement.

Tesco Stores Ltd v Constable & Ors [2008] EWCA Civ 362 (16 April 2008)

Wed, 16 Apr 2008 00:00:00 GMT

Scope of Cover: During the construction of a Tesco supermarket over a railway cutting, the tunnel protecting the railway collapsed causing the railway line to be closed. Tesco had entered in to a deed of covenant with one of the railway operators who used the line under license from Network Rail. The deed of covenant provided that Tesco would pay the railway operator such sums as fairly compensated them for any costs, losses or expenses arising out of the construction. Tesco settled the railway operator’s claim for lost passenger revenues and other claims. Insurers refused to indemnity Tesco on the basis that cover was provided only for contractual losses that were co-extensive with a liability in tort and as the railway operator’s claims did not arise out material damage to property in which the operator had sufficient proprietary interest they did not fall within the cover. The Court of Appeal upheld the decision at first instance that despite a contractual extension clause the cover provided was in respect of tortious claims. The policy provided cover for sums that Tesco became liable ‘at law for damages in respect of: (a) death of or bodily injury …; (b) loss or damage to material property …; (c) obstruction, loss of amenities, trespass, nuisance or any like cause’. The Court placed significance on the fact that the policy was a public liability policy which would normally cover tortious liability. The cover was defined and limited by the words ‘in respect of’. This meant ‘for’ and not merely ‘caused by’, ‘consequential upon’ for ‘in connection with’. The contractual extension was subject to this clause and could not be used as an aid to construction of the description of cover. The contractual extension applied to tortious claims for which Tesco became liable under contract.

Reilly v National Insurance & Guarantee Corporation Ltd [2008] EWHC 722 (Comm) (11 April 2008)

Fri, 11 Apr 2008 00:00:00 GMT

Exclusion Clauses: Insurers could rely on an exclusion in respect of third party liability arising out of “the failure of any fire or intruder alarm, switchgear or control panel machinery” despite having issued a policy to fire and alarm installers contrary to its standard underwriting criteria. The learned judge reviewed cases on the meaning of ‘machinery’ (The Arsa; Lovelidge v Anselm Odling & Sons Ltd and Aktion Maritime Corporation of Liberia v S Kasmas & Brothers Ltd) and held that it might be possible for working parts of electronic or computerised or digital mechanisms to be described as machinery. In construing the particular clause he held that ‘machinery’ was to be read disjunctively to ‘control panel’ and that a failure in the underlying fire fighting apparatus rather than the control panel was excluded. The words ‘fire or intruder alarm’ were not descriptive of the words that followed and did not limit the meaning of ‘machinery’. The commercial purpose of the clause was to exclude liability for a failure of the product installed by the contractor to carry out its function. Permission to appeal was given.

Tyco Fire & Integrated Solutions (UK) Ltd v Rolls-Royce Motor Cars Ltd [2008] EWCA Civ 286 (02 April 2008)

Wed, 02 Apr 2008 00:00:00 GMT

A construction contract provided for the employer to take out joint names insurance on the following terms: “The Employer shall maintain, in the joint names of the Employer, the Construction Manager and others … insurance of existing structures … against the risks covered by the Employer’s insurance policy.” After a flood caused by defective works, the contractor sought to avoid liability on the basis that the effect of this joint names insurance clause was to preclude an action against it for negligence based on the decision in Co-operative Retail Services Limited v Taylor Young Partnership Limited [2002] UKHL 17. As the contracts were materially different, the CRS decision was of limited assistance to the contract in issue. On its proper interpretation the Employer could recover against the contractor. The obiter comments of Lord Bingham in CRS did not amount to a “rule of law” in respect of joint-names insurance, but related to the facts of the contract in that case.

Dunlop Haywards (DHL) Ltd. & Anor v Erinaceous Insurance Services Ltd [2008] EWHC 520 (Comm) (01 April 2008)

Tue, 01 Apr 2008 00:00:00 GMT

Joinder of Parties: In December 2004, the defendant insurance brokers (the brokers) were instructed to consolidate and renew the professional indemnity insurance for the Erinaceous group except for those carrying on insurance-related business. The brokers engaged a sub-broker at Lloyds. The sub-broker obtained cover for £10 million and a further excess layer of £10 million. The excess layer limited cover to liability arising from the insured’s commercial property management activities only. Excess insurers denied liability for a number of claims made arising out of alleged negligent and/or fraudulent valuations on the basis that these were not commercial property management activities. In proceedings against the brokers, the brokers sought to join the excess insurers for the purposes of rectification of the excess layer. The excess insurers resisted this on the basis that no claim was made by any of the parties against them. Although the court had jurisdiction to make an order for joinder as the case for rectification was so weak, excess insurers should not be put in the position of participating in proceedings. The brokers had joined the sub-broker in Part 20 proceedings. The application by the sub-broker for summary judgment was refused because the brokers had a real prospect of success of showing that the sub-broker had acted in breach of its instructions and that on examination of the primacy of the obligations breached and the causative potency of the breaches that the sub-broker was responsible. The brokers had a realistic prospect of establishing that the claimants had reasonably relied on a representation made to them by the sub-brokers and that the sub-brokers assumed responsibility for exercising reasonable care in the placing of excess professional indemnity cover.

Pratt v Aigaion Insurance Company SA [2008] EWHC 489 (Admlty) (14 March 2008)

Fri, 14 Mar 2008 00:00:00 GMT

Construction of Terms: The claimant was the owner of a fishing trawler. He took out a policy of marine insurance with the defendant through insurance brokers with an insured value of £120,000. The period of cover was for 12 months from June 2006. The policy required among other things 'Warranted Owner and/or Owner's experienced Skipper on board and in charge at all times and one experienced crew member.' In December 2006, the vessel was fishing from North Shields for prawns. On 11 December the vessel caught fire. There were two quotes for repairs, both of which were higher than the insured value of the vessel. The claimant claimed under the insurance. The defendant declined to pay on the basis that no-one was on board the vessel when the fire started and that therefore the 'at all times' warranty had been breached. The court held that the phrase 'at all times' in the context of a requirement for the owner or an experienced skipper to be on board had to be interpreted literally without ambiguity and that therefore insurers were entitled to rely on the clause.

Brit Syndicates Ltd & Ors v Italaudit SpA & Ors [2008] UKHL 18 (12 March 2008)

Wed, 12 Mar 2008 00:00:00 GMT

The umbrella ‘not for profit’ company responsible for managing and maintaining the worldwide organisation of Grant Thornton firms was listed as an Assured Firm by an extension ‘solely in respect of claims made against [it] arising from claims made against a member firm of Grant Thornton International insured by the terms and conditions of the policy”. Grant Thornton Italy had audited the accounts of a Parmalat company. Claims by Parmalat investors were brought against both Grant Thornton Italy and the umbrella company. Insurers sought to avoid the policy against Grant Thornton Italy ab initio and therefore declined to cover the umbrella company on the basis that there was no insurance in place in terms of Grant Thornton Italy. The House of Lords overturned the Court of Appeal in holding that the umbrella company was covered for vicarious / partnership liability irrespective of whether insurers were entitled to avoid liability on the underlying policy.

Morton Insurance Brokers Ltd. v Sidhu [2008] EWHC 417 (QB) (06 March 2008)

Thu, 06 Mar 2008 00:00:00 GMT

Recovery of Losses from Employees: The claimant was an insurance broker. A large part of its business was motor insurance. The insurance company was Sabre Insurance Company Limited (the insurer). The defendant was employed by the claimant as an insurance clerk and subsequently as a manager. Following a suspicious claim by a customer, the insurer conducted an investigation of that claim. The insurer concluded that the defendant had backdated a manual insurance cover note issued to that customer. A mediated settlement was reached whereby the claimant agreed to pay to the insurer a sum in settlement of its claim in respect of manual cover notes issued by the defendant which it concluded had been backdated by him. The defendant was summarily dismissed for gross misconduct. The claimant brought proceedings against the defendant, seeking damages for breach of contract in the sum it paid to the insurer in settlement of its claim. The defendant's good employment record with the claimant and the absence of any evidence that he had profited from such wrongdoing had to be taken into account. However, there had been compelling evidence that the defendant had backdated the disputed cover notes. Accordingly, the claimant was entitled to recover its losses caused by the defendant's breach of contract.

WASA International Insurance Company Ltd v Lexington Insurance Company & Ors [2008] EWCA Civ 150 (29 February 2008)

Fri, 29 Feb 2008 00:00:00 GMT

Settlements: Lexington insured the property of Alcoa. The period of insurance cover ran from 1st July 1977 to 1st July 1980. Lexington purchased facultative reinsurance with Wasa and AGF for the same years and limit of liability on the assumption that it was “back-to-back” cover. Alcoa subsequently sought to recover remedial clean up costs from Lexington. The US Court held that Lexington was liable for these costs, irrespective of whether the damage was sustained before, during or after the inception date. Lexington settled with Alcoa on this basis and sought to recover under the reinsurance cover treaty. Reinsurers declined to pay on the basis that the reinsurance policy was governed by English law and accordingly they could only be liable for the costs of remedying damage to property which actually occurred during the three year period of cover. The Court of Appeal decided that the key question was not so much whether the parties intended the cover to be “back-to-back” (whatever that might mean) but whether the parties intended that wording to have the same meaning in both contracts. Where the policies provided cover for property for the same period it was natural to infer that the parties intended the wording to have the same meaning in each contract. The same or equivalent wording in the insurance and reinsurance should generally be given the same construction unless there were clear indications to the contrary and that accordingly Lexington could recover from reinsurers.

Kosmar Villa Holidays Plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147 (29 February 2008)

Fri, 29 Feb 2008 00:00:00 GMT

Condition precedent: The insurance policy covered accidental injury to holiday makers and contained a condition requiring Kosmar Villa Holidays (“KVH”), a specialist tour operator, to notify insurers immediately of the occurrence of any injury. KVH only notified insurers a year later. Although insurers wrote to KVH requesting further information and informed KVH’s solicitors that it would take over the conduct of the claim that did not amount to waiver by estoppel. The repudiation for breach of the condition precedent several weeks later was consistent with insurers’ right to a reasonable time to consider whether or not to repudiate the claim. Breach of a procedural condition remained the area of estoppel not election.

Ansari v New India Assurance Ltd. [2008] EWHC 243 (Ch) (18 February 2008)

Mon, 18 Feb 2008 00:00:00 GMT

Indemnity: The Claimant’s commercial premises were destroyed by fire. When he had applied for insurance he had stated that the premises were to be used for a friend’s business of “wholesaling kitchenware” and that they were protected by an automatic sprinkler system. After investigation insurers cancelled the policy on the basis that the premises were being used to store motorised mini motorbikes and scooters and the sprinkler system had been turned off, because there had been a material alteration to the premises or business or the facts stated in the proposal form leading to termination. The insured sought to rely on the non-invalidation clause protecting his interest as freeholder where the risk of destruction or damage was increased without his authority or knowledge, but on the facts was likely to have known of these matters. Although a warrant or representation as to the condition of a property was not to be treated as covering the future, that did not prevent the insurer from requiring notice to be given of any subsequent change of fact that was material to the insurance.

Standard Life Assurance Company v Egan Lawson Ltd [2000] EWCA Civ 293 (21 November 2000)

Wed, 13 Feb 2008 00:00:00 GMT

Cover: Standard Life was exposed to multiple low value claims from retail customers in respect of mortgage endowment advice. Under its policy it had cover for £100 million excess £25 million. The aggregation clause for calculating the excess was in respect of “each and every claim and / or claimant”. This did not permit the aggregation of related claims made by separate claimants notwithstanding that the effect was to render the cover almost useless and the market would not have understood the words to have that effect. The placing brokers were in breach of duty despite the problem not have been identified by solicitors who were instructed to consider other aspects of the policy. Although Standard Life was an insurer no deduction should be made for contributory negligence a because the brokers had repeatedly reassured Standard Life that it had cover in respect of its liability for claims which in their nature were individually likely to be well under the policy excess but which together might exceed that figure. The transfer under Part VII of FSMA 2000 had been effective in terms of the claims against brokers.

Palmer v The Estate of Kevin Palmer Deceased & Ors [2008] EWCA Civ 46 (06 February 2008)

Wed, 06 Feb 2008 00:00:00 GMT

Costs: Where an insurance company had funded, controlled and directed in its own interest the defence of a personal injury claim against its insured and had without reference to its assured rejected a Part 36 Offer within the limits of the policy cover, it had been appropriate to order it personally to pay costs incurred in the claim.

Patel v Windsor Life Assurance Company Ltd [2008] EWHC 76 (Comm) (25 January 2008)

Fri, 25 Jan 2008 00:00:00 GMT

Fraud: The Claimant was the beneficiary under a number of life insurance policies on the life of a third party. The Claimant had assisted on completing the application forms. At trial the Claimant could not explain the discrepancies in the application forms. Also although it was said that the third party had died on a trip to India, it was found that the death certificate and entry in the crematorium registry were falsified and the doctor in which surgery the third party had been alleged to have died denied ever having treated the third party. In light of the Claimant’s previous convictions for dishonesty the Court could not accept his evidence unless corroborated by a third party. In addition in the absence of any explanation as to why the Claimant had been made a sole beneficiary, it was an inference that the third party had a fraudulent motive in taking out the policies. In the absence of corroboration it was to be inferred that the representations of the third party on the applications were false and made with the intention to defraud insurers. As the third party had failed to disclose a material fact when applying, namely that he was seeking to defraud the insurers the policy was voidable.

Zeller v. British Caymanian Insurance Company Ltd (Cayman Islands) [2008] UKPC 4 (16 January 2008)

Wed, 16 Jan 2008 00:00:00 GMT

Life Insurance: The insurer of a group health policy could not repudiate liability where the assured had believed he had answered the questions on the health questionnaire accurately.

Francis & Ors v Wells & Anor [2007] EWCA Civ 1350 (19 December 2007)

Wed, 19 Dec 2007 00:00:00 GMT

The coincidence of two parties being involved in three accidents in the course of a year together with the inconsistencies and uncertainties in the Claimants’ accounts of were consistent with a conspiracy for a staged accident. While not probative the judge had misdirected himself in not considering the evidence as a whole and finding that the accident had not been proved on the balance of probabilities. The case would be submitted for retrial.

AXA Insurance UK Plc v Cunningham Lindsey United Kingdom (An unlimited Company) [2007] EWHC 3023 (TCC)

Tue, 18 Dec 2007 00:00:00 GMT

Loss Adjusters: Insurers accepted liability under a householders’ policy for the reinstatement of an old farmhouse after subsidence. The expectation of costs was about £72,000 which was within the sum insured of just over £200,000. The ultimate costs were estimated at over £1,500,000. On the issue of causation several heads of loss were irrecoverable as insurers had not been liable for them to the assured. The assured was only entitled to the costs of removal of the defective work and its replacement with suitable work and materials as well as associated professional fees, accommodation and furniture costs and limited general damages. AXA were not entitled to have damages assessed on a “top-down” approach.

Mehnaz v Sabre Insurance Co Ltd [2007] EWCA Civ 1525 (12 December 2007)

Wed, 12 Dec 2007 00:00:00 GMT

After an unsuccessful defence of a claim on a motor insurance policy arising out of an allegedly stolen vehicle insurers were liable to pay all of the Claimant’s costs and not the 60% the trial judge had ordered.

C v D [2007] EWCA Civ 1282 (05 December 2007)

Wed, 05 Dec 2007 00:00:00 GMT

The Bermuda Form providing for London arbitration and for New York governing law meant that the parties had chosen London as the forum for remedies seeking to attack the award. On its proper construction the contract incorporated the framework of the Arbitration Act 1996. The fact that Arbitration Act 1996 allowed parties to contract out of its non-mandatory provisions did not mean that the proper law of contract to refer disputes to arbitration could constitute an 'agreement to the contrary' and thereby import a method of challenge to the award not permitted by the seat of the arbitration.

Korea National Insurance Corporation v Allianz Global Corporate & Speciality AG [2007] EWCA Civ 1066 (30 October 2007)

Fri, 30 Nov 2007 00:00:00 GMT

Reinsurers declined to pay insurers who had provided cover under an aviation hull and liability policy. Insurers obtained judgment against reinsurers in Korea. In proceedings to enforce that judgment in this jurisdiction, reinsurers alleged that their liability had been compromised prior to the Korean judgment and that it had accordingly been obtained by fraud. In response to an application for summary judgment on this point reinsurers relied only on their statement of case in which they alleged that a meeting had taken place at which reinsurers had agreed to pay up to a third of their overall liability to the extent they were able to. In granting summary judgment, the Court found that despite the statement of truth there was no real prospect of successfully defending on this basis because there was no record of any such agreement; the correspondence after the date of the alleged agreement was wholly inconsistent with an agreement having been reached; and the terms suggested were incapable of giving rise to a legally binding agreement. The Court of Appeal endorsed this decision and commented that the judge was entitled to look at other evidence and not simply accept the assertion in the Defence as being correct. It did not matter that the Statement of Truth was signed by the person who was present at the meeting. The Statement of Truth was signed in the capacity of a representative of the party and not as a personal witness statement. Ultimately the correspondence after the alleged meeting confirmed no basis for suggesting that Insurers had the relevant knowledge of any agreement for fraud at the time judgment was obtained.

Coromin Ltd v AXA Re & Ors [2007] EWHC 2818 (Comm) (30 November 2007)

Fri, 30 Nov 2007 00:00:00 GMT

Anglo American’s captive insurer sought a declaration that it was entitled to indemnification by some reinsurers of various layers of the reinsurances (excess of US$50 million up to US$ 1 billion) for the period 30 June 2004 to 30 June 2005 arising out of an accident at a copper mining and processing facility in Northern Chile where the motor which drove the mill failed as a result of a design defect. The policy was “All Risks” with an exclusion for damage or business interruption caused by a defective condition due to design defect but with an Extension which reintroduced that element of cover. To benefit from the Extension, newly constructed or installed equipment was required to satisfy certain pre-conditions including “official acceptance … following formal handover certificate procedure”. Although the motor was part of the Mill for the purposes of the Extension it was identifiably separate and had met the four pre-conditions.

The Law Society of England and Wales & Ors v Shah & Ors [2007] EWHC 2841 (Ch) (30 November 2007)

Fri, 30 Nov 2007 00:00:00 GMT

The Law Society sought to recover compensation paid out to defrauded members of the public from innocent partners of the law firms who were discharged bankrupts. Although the actions against the bankrupts were struck out the actions against their insurers, the Assigned Risks Pool were permitted to continue under the Third Parties (Rights against Insurers) Act 1930. The underlying cause of action had not been destroyed as a result of the bankrupts’ discharge from bankruptcy. For the purposes of establishing a claim capable of notification under the policy it would be sufficient for the third party claim to be admitted in bankruptcy whether or not it had been subsequently quantified.

Poole & Ors v HM Treasury [2007] EWCA Civ 1021 (24 October 2007)

Sat, 24 Nov 2007 00:00:00 GMT

Lloyd’s names argued that had the UK government implemented the requirements of Directive 73/239 (coordination of taking up and pursuit of the business of direct insurance) they would not have suffered losses in the course of their underwriting or their losses would have been less. The Directive did not grant rights to those Names in the capacity in which they sued and accordingly the Names could not make out Francovich liability.

AIG Europe (Ireland) Ltd v Faraday Capital Ltd [2007] EWCA Civ 1208 (22 November 2007)

Thu, 22 Nov 2007 00:00:00 GMT

The assured company announced that it would need to restate its accounts. This led to a fall of a third in its share value. Insurers did not notify reinsurers of the ensuing shareholder class action until they had settled the claim. Reinsurers refused indemnity, relying on a claims co-operation clause requiring insurers “upon knowledge of any loss or losses which may give rise to a claim” to advise reinsurers at the latest within 30 days. As there was a trigger event (the company announcement) there was a loss within the meaning of the claims co-operation clause which might give rise to a claim. It did not matter that the share price subsequently recovered. The case of Royal Sun Alliance v Dornoch [2005] EWCA Civ 238 was different in that there was no definitive trigger event to show a loss until settlement of the claim. Insurers were aware of the loss once the class action was notified to them by the company. The Court declined to rule on whether or not reinsurers have to prove subjective or objective knowledge on behalf of insurers and the position remains as per Aikens J in Dornoch where he held that objective knowledge would be sufficient until the Court of Appeal does determine this issue.

Outokumpu Stainless Ltd v AXA Global Risks (UK) Ltd & Ors (Comm) 8/11/07

Thu, 08 Nov 2007 00:00:00 GMT

A property damage clause with a radioactive contamination extension clause was restricted to physical damage related loss and did not extend to pure economic loss. Cleaning or decontaminating the property would be recoverable. The cost of disposal of a part requiring replacement would not be covered unless it fell within the debris removal rubric. The cost of disposal of radioactive dust and valueless slag fell was not covered.

Limit No 2 Ltd v AXA Versicherung AG [2007] EWHC 2321 (Comm) (17 October 2007)

Wed, 17 Oct 2007 00:00:00 GMT

A representation about the normal level of deductibles was false and entitled reinsurers to avoid the treaty for the original Treaty year 1996. The extension from a 12 month to 19 month period into 1997 was not a separate contract. It amended the original treaty and could not survive its avoidance. In the absence of new underwriting information the original representation remained uncorrected and operative at the 1998 renewal and reinsurers were also entitled to avoid the 1998 Treaty.

AXA Insurance (UK) Plc v Cunningham Lindsey United Kingdom [2007] EWHC 2464 (TCC) (17 October 2007)

Wed, 17 Oct 2007 00:00:00 GMT

An amendment during the course of a trial the consideration of which would have required examination of the other party’s expert’s conduct would not be permitted because it would force the instruction of a new expert which could not be achieved mid-way through the trial without disproportionate costs and expenditure.

AXA Insurance (UK) Plc v Cunningham Lindsey United Kingdom [2007] EWHC 2464 (TCC) (17 October 2007)

Wed, 17 Oct 2007 00:00:00 GMT

Insurancewide.com Services Ltd v Revenue & Customs Rev 1 [2007] UKVAT V20394 (15 October 2007)

Mon, 15 Oct 2007 00:00:00 GMT

This VAT case looked at whether a ‘comparison service’ provided by a company on a website used by prospective customers for insurance cover from various insurers was exempt from paying VAT. The company, acting as an intermediary, received commission from the insurers to whom it introduced clients. The company treated the supply of the services as exempt under the Value Added Tax Act 1994 Sch.9 Group 2. The Tribunal found that although the company was acting as an intermediary, it failed to qualify as an 'insurance agent’ at any stage a as it did not have the power to bind the insurers. Therefore, the company was liable to pay VAT on the supply of such services.

General Motors Corporation v Royal & Sun Alliance Insurance Plc & Ors [2007] EWHC 2206 (Comm) (02 October 2007)

Tue, 02 Oct 2007 00:00:00 GMT

Where there were multiple proceedings in different jurisdictions the effect of a consent order to stay the English proceedings where the other proceedings were being discontinued amounted to an exclusive jurisdiction agreement conferring jurisdiction on the English courts.

Tesco Stores Ltd. v Constable & Ors [2007] EWHC 2088 (Comm) (14 September 2007)

Fri, 14 Sep 2007 00:00:00 GMT

The construction of a new Tesco superstore required the enclosure of a section of railway in two tunnels. Network Rail owned the track and land. Chiltern had a contractual right to run trains on the track. Tesco was required by the regulator to take out public liability insurance in respect of legal liability which may be incurred in respect of “death or bodily injury to any person and loss or damage to property arising from activities authorised by each licence holder”. Under a Deed between Chiltern and Tesco, Tesco agreed to pay Chiltern “on demand such sums as shall from time to time fairly compensate them for all and any costs, losses or expenses arising out of or resulting (directly or indirectly) from … the carrying out of the Works … on its existing and / or future railway passenger business.” A section of the tunnel collapsed causing significant damage, but not to any property belonging to Chiltern. Chiltern was unable to operate its service for 51 days and recovered from Tesco a sum under the Deed. Tesco sought indemnity under the public liability of its policy in respect of the lost revenues to Chiltern including future diminished revenues. Insurers refused to pay the claim on the grounds that the policy only provided cover in respect of Tesco’s liability to third parties who as a result of carrying out the project works suffered the kind of harm that would give rise to an action in tort. As the damage suffered by Chiltern was pure financial loss recoverable only in contract under the Deed it was not recoverable under the Policy. The Court accepted insurers’ arguments that on its true construction the indemnity only reflected claims in tort and concurrent liability in tort. It did not extend to Tesco’s contractual liability under the Deed.

Bee v Jenson [2007] EWCA Civ 923 (13 September 2007)

Thu, 13 Sep 2007 00:00:00 GMT

The defendant admitted liability when he collided with the claimant’s stationary car. The claimant used a hire car whilst his car was being repaired as his insurance covered the provision of a replacement vehicle at no cost to the insured in the event of an accident caused solely by another identified insured driver, where the insured's own vehicle could not be driven as in this case. The claimant brought proceedings to claim for the car hire as the defendant objected to paying for it. The Court of Appeal decided that the claimant was entitled to recover the reasonable cost of hire from the defendant's insurers notwithstanding that they had negotiated an undisclosed discount from the hire company.

HLB Kidsons (A Firm) v Lloyds Underwriters Subscribing to Lloyds Policy No 621/PKID00101 & Ors, Rev 1 [2007] EWHC 1951 (Comm) (09 August 2007)

Thu, 09 Aug 2007 00:00:00 GMT

The claimant was a firm of chartered accountants and in 2002 merged with Baker Tilly. The defendants were Lloyd’s underwriters and insurance companies and had provided the claimant with professional indemnity insurance cover on a claims-made basis under an insurance policy incepting on 1st May 2001 for a period of 12 months. The claimant became insured under Baker Tilly’s policy when it was time for renewal from 1st May 2002. The action was to obtain a declaration from the Court as they believed that they should be indemnified for having notified the insurers of circumstances giving rise to claims in accordance with a general condition in the insurance policy. The claimant relied on two letters dated August 2001 and March 2002 sent during the currency of the policy as constituting valid notice of the claims. The Court ruled that the letter of August 2001 did not constitute effective notification to the underwriters of any circumstances which might give rise to a loss or claim against the claimant. The notifications were in some instances deliberately vague as to the possibility of a claim and sent to the placing rather than the claims teams. The letter sent to the claims team was insufficiently clear and was also inadequate for purposes of notification. That letter which did amount to notification of a claim was only in respect of the limited claims identified and not the broader scheme contended for.

HLB Kidsons (A Firm) v Lloyds Underwriters Subscribing to Lloyds Policy No 621/PKID00101 & Ors, Rev 1 [2007] EWHC 1951 (Comm) (09 August 2007)

Thu, 09 Aug 2007 00:00:00 GMT

R& V Verischerung AG v Risk Insurance & Reinsurance Solutions SA & Others 30/7/07 (CA)

Mon, 30 Jul 2007 00:00:00 GMT

The Defendant insurance intermediaries were under the day-to-day control of Jean-Claude Chalhoub. The Claimant insurers and reinsurers entered in to two binders under which they purported to authorise Risk to write contracts of reinsurance on its behalf obtained through the London market. The binders had an addendum under which Risk was granted an additional commission of 40% of the gross premium written in the first year of the binders in return for which the insurers would cede a 30% shareholding in one of the intermediary companies. The premium was earned by another intermediary and accordingly the shareholding in that for which the shareholding was to be ceded was worthless. The insurers alleged that the entry in to the agreements were not only unauthorised but also arose as a result of a conspiracy. At first instance the judge had found evidence for such a conspiracy. With one exception there was no realistic prospect of success on the numerous applications for permission to appeal, particularly where in relation to an earlier permission to appeal Risk had failed to meet conditions and had then relied on impecuniosity without disclosing how its litigation had been funded.

Aegis Electrical & Gas Services Co Ltd v Continental Casualty Co 27/7/07 (QBD)

Fri, 27 Jul 2007 00:00:00 GMT

The claimant syndicate insured an oil refinery. It sought reinsurance from the defendant. The reinsurance slip described the type of cover as 'machine breakdown, boiler explosion and business interruption and was expressed to be subject to certain attached terms and conditions. Additional conditions attached to a reinsurance slip containing definitions of "Accident" and "Object" were effective to restrict the cover provided by the reinsurance to losses from "Accident" as defined in respect of property within the definition of "Object". The court ruled that in the circumstances damage to a reactor unit caused when it overheated was not the result of an explosion as a matter of the ordinary usage of explosion.

Europ Assistance Insurance Ltd v Temple Legal Protection Ltd [2007] EWHC 1785 (Comm) (25 July 2007)

Wed, 25 Jul 2007 00:00:00 GMT

The claimant was a wholly-owned subsidiary of the Italian insurer, Assurazioni Generali SpA. The defendant was an underwriting agency which worked exclusively in the field of legal expense insurance and had done so since 1999. The defendant wrote after the event insurance with the claimant as carrier under the authority granted by a binding authority agreement effective from January 2003. Termination of the binding authority in December 2005 did not affect accrued rights and liabilities and the defendant remained obliged and entitled to conduct the run-off of existing insurance at that date. Some 7000 policies remained in force. The claimant applied for interim injunctions and declarations to restrain the defendant from continuing to conduct the run-off. It was accepted that the determination of the application was a matter of discretion and that the exercise turned on the adequacy of damages as a remedy, the balance of convenience and conservation of the status quo. In the circumstances the balance of convenience and other material factors militated against the grant of interim injunctive relief to restrain the defendant from continuing to conduct the run-off of after the event insurance which it had written under the binding authority.

Korea National Insurance Corporation v Allianz Global Corporate & Specialty 24/7/07 (Comm)

Tue, 24 Jul 2007 00:00:00 GMT

The Claimant was seeking to enforce a judgment obtained against the Defendant in a North Korean court. The Defendant resisted the claim on the grounds that the judgment was defective in that the Claimant had not followed the proper procedure for representative proceedings and had misled the North Korean court about a settlement. The Claimant had complied with the procedure for representative proceedings and there was no realistic prospect of showing that a compromise had occurred given the size of the claim and the absence of any written record of such a compromise.

Korea National Insurance Corp v Allianz Global Corporate & Speciality AG 24/7/07 (Comm)

Tue, 24 Jul 2007 00:00:00 GMT

The claimant insured a North Korean airline under an aviation hull and liability insurance policy covering a period between 1st November 2004 and 31st October 2005. The claimant was reinsured for the same period. The defendant was the representative of the reinsurers. Following an accident involving a helicopter belonging to the insured crashed into a warehouse in July 2005, the claimant informed the reinsurers and then loss adjusters were appointed. The relief centre that owned the building made a claim against the insured and then obtained judgment in December 2005 which in turn requested reimbursement from the claimant. The defendant contended that there was a defect in the Korean judgment for failing to disclose a settlement agreement had been reached and therefore the court lacked jurisdiction. The Court decided that it was unlikely and wholly improbable that the claimants and reinsurers would reach a settlement without a written record of the agreement, given the scale of the claim.

Korea National Insurance Corp v Allianz Global Corporate & Specialty AG [2007] EWHC 1744 (Comm) (24 July 2007)

Tue, 24 Jul 2007 00:00:00 GMT

Bank of Scotland v Euclidian [No 1] Ltd & Others 20/7/07 (QBD)

Fri, 20 Jul 2007 00:00:00 GMT

The court was required to determine preliminary issues arising in connection with a conditional fee agreement scheme for personal injury claimants and a condition of the relevant master certificate of insurance that constituted a collateral contract of indemnity between the Bank of Scotland and Euclidian, who were the insurers. The court determined that the true construction of an indemnity clause in a master certificate of insurance relating to a conditional fee agreement scheme for personal injury claimants was that, as between the claimant bank and the defendant underwriters, the risk of loss resulting from the vetting of claims was with the underwriters.

HIH Casualty & General Insurance Ltd v JLT Risk Solutions Ltd [2007] EWCA Civ 710 (12 July 2007)

Thu, 12 Jul 2007 00:00:00 GMT

An insurance broker who, after placing a risk, becomes aware of information which has a material and potentially deleterious effect on the insurance cover which he has placed is under an obligation to act in his client's best interest by drawing it to the attention of his client and obtain his instructions in relation to it irrespective of whether he is in a potential conflict having acted for both insured and insurer in placing reinsurance. However on the facts of the case such a breach had not lead to insurers paying on the claims. To the extent that contributory negligence might have been relevant, insurers were 100% contributory negligent on the basis of their knowledge that reinsurers were refusing liability on two thirds of the film finance slates and had not confirmed the position in respect of the final third.

United Insurance Company of Libya v Aon Ltd [2007] EWHC 1583 (Comm) (05 July 2007)

Thu, 05 Jul 2007 00:00:00 GMT

Insurers claimed that in placing reinsurance brokers had misrepresented and concealed the brokerage being earned. On the facts the total commission had been disclosed. In respect of a subsequent policy insurers alleged that the brokers had not placed reinsurance in accordance with instructions. However insurers should have been aware of how it was being placed. It was also alleged that in respect of renewal the brokers had acted in breach of contract and of fiduciary duty. At the time insurers had sought alternative quotes from the market and accordingly there was no relevant contract.

eSure Insurance Limited v Direct Line Insurance plc 29/6/07 (Ch)

Fri, 29 Jun 2007 00:00:00 GMT

Direct Line objected to the registration of eSure’s logo using a computer mouse on wheels as it was too similar to Direct Line’s telephone on wheels, which was well established. The Court found that the use of the eSure’s trade mark would take an unfair advantage of the very distinctive character of Direct Line’s earlier trade mark of high reputation and there would be a likelihood of confusion on the part of the public. Therefore, it could not be registered under the Trade Marks Act 1994.

Steadman-Byrne v Amjad & Ors [2007] EWCA Civ 625 (27 June 2007)

Wed, 27 Jun 2007 00:00:00 GMT

Half way through a trial for personal injuries following a road traffic accident, the Judge called both Counsel in to his chambers and advised them that he did not consider the Claimant’s witnesses to be dishonest and whilst he had not yet heard the Defendant’s evidence he could not see how the Defendant could win. The Judge made comments, which included: it was ‘flavour of the month’ for insurers to prosecute claimants with Asian sounding names; insurance companies are trying to send out a message about fraudulent claims to the Asian community, if there was such a thing; the Defendant worked for the police; someone with a police background always thinks that they are right or never thinks that they are wrong and find it difficult to accept that they might be mistaken; and the Defendant may or may not be mistaken, but he believes that he saw two people in the car. It was these further comments that gave grounds for the appeal and the Defendant was granted permission to appeal because the Judge had in effect shut out the Defendant and in so doing he had showed bias. The Court of Appeal reiterated that both the common law and the European Convention on Human Rights recognise the fundamental right of every litigant to have a tribunal free of bias and the objective appearance of bias being the premature formation of a concluded view adverse to one party and allowed the appeal.

Jafray & Ors v Society of Lloyds 26/6/07 (CA)

Tue, 26 Jun 2007 00:00:00 GMT

Where an appeal had been heard, the Court of Appeal would not reopen it in light of new evidence of perjury at the original trial unless the case was so clear as to be irrefutable; such complaints should be commenced by way of a new action to set aside the original decision rather than by reopening the appeal.

Sunderland Marine Mutual Insurance Company Ltd v Wiseman & Ors [2007] EWHC 1460 (Comm) (22 June 2007)

Fri, 22 Jun 2007 00:00:00 GMT

On the basis of a claim that a fishing vessel had sunk, insurers made a payment. Subsequently it was discovered that the assured had scuttled the vessel. In his statement he identified the Defendant as being responsible. Although the authorisation and payment of the claim had been made in the jurisdiction it did not mean that the claim could be brought there. The conspiracy and dishonest representations had been made in Scotland. The Court decided that the claim and circumstances had a strong connection with Scotland and almost none with England and accordingly the English Court had no jurisdiction.

Seele Austria GmbH & Co v Tokio Marine Europe Insurance Ltd [2007] EWHC 1411 (Comm) (21 June 2007)

Thu, 21 Jun 2007 00:00:00 GMT

The Claimant sought cover under a Combined Contract Works and Third Party Liability Policy in respect of loss and expense arising out of the rectification of defective “punched” windows as part of a building project at Paternoster Square. The windows were defective as a result of a number of reasons including incorrect manufacture, installation and subsequent damage by works. However on the proper construction of the memoranda the sub-contractors would be subject to the same threshold for loss as those assureds who had paid the premium.

Byrne (a minor) v The Motor Insurers Bureau Secretary of State for Transport [2007] EWHC 1268 (QB) (05 June 2007)

Tue, 05 Jun 2007 00:00:00 GMT

The untraced drivers agreement did not provide protection equivalent to or as effective as the protection provided by the common law in respect of insured drivers because of the different time bars for minors. The MIB procedure should have provided for a deferred start to the limitation period for minors as found in section 28 of the Limitation Act 1980. Court of Appeal authority precluded the application of the Marleasing principle to construe the agreement in this way. As the Second Directive was capable of having direct effect the doctrine of precedent was not applicable where Community law prevailed. However as the MIB was not an emanation of the State, the directive was not directly enforceable against it. The Secretary of State was in principle liable to Francovich / Factortame damages on the basis that there had been a lack of thoroughness in checking the untraced drivers agreement for compliance with the Second Directive at the time of its implementation.

ABB Asea Brown Boveri Ltd & Ors v Hiscox Dedicated Corporate Member Ltd & Ors [2007] EWHC 1150 (Comm) (16 May 2007)

Wed, 16 May 2007 00:00:00 GMT

ABB with its US subsidiary and its Dutch subsidiary set up a joint venture company to enter into a power purchase agreement with the local electricity board and was required to give a deposit of two per cent of the project cost. Fifty per cent of that deposit was financed by another company. ABB had terminated the power purchase agreement and sought the return of the deposit, but it had not been returned. ABB made a claim against the insurers under its contract frustration indemnity insurance on the basis that there had been an unfair forfeiture of the security deposit. The issue between the parties was in relation to the date of the operation of any insured peril to the extent that the limitation period had expired and ABB sought to amend its pleadings to substitute its subsidiaries as claimants because a mistake had been made. It was argued by the insurers that the amendment to substitute the claimants would deprive them of a time bar defence. The Court held that the mistake was genuine and granted permission for the claim to be amended.

AXA Insurance UK Plc v Norwich Union Insurance Ltd. [2007] EWHC 1046 (Comm) (14 May 2007)

Tue, 15 May 2007 00:00:00 GMT

Axa sought a determination of the court that it was NU and not itself who was liable to indemnify the third party with respect to liability arising from an accident. Axa argued that NU is liable under a Motor Liability Policy. NU argued that Axa was liable under an Employers’ Liability Policy. Both Axa and NU had insured Floodlighting & Electrical Services Limited. An employee of Floodlighting had been injured whilst, in the course of his employment, using a lorry equipped with an elevating bucket and boom to dismantle roadside decorations. While the lorry was stationary beneath the decorations, the employee had ascended in the bucket. The boom had been struck by a passing vehicle and the employee had fallen from the bucket. The central question was whether it was compulsory under the Road Traffic Act 1988 that Floodlighting be insured against its liability to its employee. If it was compulsory, then NU was liable to indemnify Floodlighting under the motor insurance; if it was not compulsory, then it was Axa who was liable to indemnify Floodlighting under the employers’ liability. This depended upon whether the employee was a person who, at the time of the accident, had been “carried in or upon a vehicle” within the meaning of s.145(4A) of the RTA. It was decided that the word “carried” in s.145(4A) is to be understood to be referring to a person being transported and Floodlighting's liability to its employee was insured by Axa under the Employers' Liability Policy.

Ilangaratne v British Medical Association [2007] EWHC 920 (Ch) (09 May 2007)

Wed, 09 May 2007 00:00:00 GMT

The BMA was insured. Its insurers had instructed solicitors directly. It was argued that there should be no liability for the BMA’s costs because it was not under a retainer with its solicitors. Although the argument was rejected on the basis that in such a situation the courts will readily infer a retainer between the insured and the solicitors the cost assessors noted that the hourly rates charged were higher than those normally charged to insurers the court considered that an investigation should have been made. A letter from the solicitors to insurers setting out a bracket rate for the partner and fixed rates for other solicitors did not amount to a retainer but was evidence of the standing charges which would be applied.

A F Blakemore & Son Ltd v Machin & Anor [2007] EWHC 963 (Ch) (02 May 2007)

Wed, 02 May 2007 00:00:00 GMT

Although the terms of the Pension Scheme provided that payments were to be based on earnings including bonuses the trustees determined that in respect of these two employees they should not. That the employees had entered in to a compromise agreement on their departure in respect of “all matters arising out of their employment” with the company did not apply to pension benefits under the scheme. The Ombudsman had failed to deal with the evidence that there had however been an oral agreement between the company and the employees that overrode the provisions of the scheme.

Zurich Insurance Co v Revenue & Customs Commissioners [2007] EWHC Civ 218 (CA) (Date Uncertain)

Tue, 01 May 2007 00:00:00 GMT

The case was concerned about whether certain consultancy services provided by a Swiss company with a UK branch was liable to pay VAT on such services in the UK. The Court of Appeal found that the supply of services was made to a UK establishment and therefore VAT was due to be paid in the UK.

Equitas Ltd & Anor. v Horace Holman & Company Ltd. [2007] EWHC 903 (Comm) (27 April 2007)

Fri, 27 Apr 2007 00:00:00 GMT

The Defendant Lloyds broker was the administrator for several outward contracts of reinsurance to protect Lloyd’s Syndicates for 1992 and earlier years. They had been in run-off since January 2003. Equitas sought damages arising from alleged failures by the broker to provide its ledgers and other accounting documentation. There was a mutual exchange of ledgers and documents under a consent order. Ultimately the only issue between the parties was costs and some relatively small sums said to be due from the broker. It was argued that Equitas should not have pursued their claim further once they had received the documents and that they should not be entitled to the entirety of their costs. The Court reduced the costs by one half for that period.

Wasa International Insurance Company Ltd. v Lexington Insurance Co [2007] EWHC 896 (Comm) (25 April 2007)

Wed, 25 Apr 2007 00:00:00 GMT

In applications for declarations relating to a contributing facultative reinsurance contract in respect of an underlying insurance of a US company’s worldwide physical loss and damage issues arose as to whether reinsurers were liable for environmental remedial costs sustained prior and subsequent to the three year period specified in the contract. Under English law the reinsurers could only be liable for those costs incurred during the policy period.

Encia Remediation Ltd v Canopius Managing Agents Ltd [2007] EWHC 916 (Comm) (24 April 2007)

Tue, 24 Apr 2007 00:00:00 GMT

In construing the Environmental Consultants Professional Indemnity Policy the Court found that the risks of the two relevant businesses were broked side by side and that all underwriters knew and appreciated what had in the 2001/2002 year been one risk became in 2002/2003 two risks. Consequently the cover extended to all of the claimant’s business activities including design and build contracts. The use of the words “and as more fully declared” did not amount to a limitation.

Merrill Lynch International Bank Ltd. v Winterthur Swiss Insurance Company [2007] EWHC 893 (Comm) (20 April 2007)

Fri, 20 Apr 2007 00:00:00 GMT

In an application for summary judgment under a Credit Indemnity Insurance Policy in respect of the bank’s credit exposure under an ISDA Master Agreement and interest rate collar transactions with Eurotunnel. When Eurotunnel commenced a statutory procedure under French bankruptcy intended to offer interim protection to allow for reorganisation of the companies experiencing insurmountable financial difficulties known as a procedure de sauvegarde the Bank claimed under the policy contending that this amounted to a Bankruptcy event. However Eurotunnel disputed that a bankruptcy event had taken place and tendered the next payment under the ISDA Agreement. Insurers reserved their rights and sought clarification as to whether an insured event had occurred. Subsequently the Bank issued notification of a contingent event claim. In its response to the application for summary judgment insurers contended that no Counterparty Bankruptcy had occurred; that the Bank had not been entitled to terminate the ISDA Master Agreement; on its true construction no Bankruptcy Trigger Event had occurred as the termination of the ISDA Master Agreement preceded the Counterparty Bankruptcy; and that the proper notification procedures had not been followed. The Bank was entitled to summary judgment.

Kosmar Villa Holidays Plc v The Trustees of Syndicate 1 2 4 3 [2007] EWHC 458 (Comm) (04 April 2007)

Wed, 04 Apr 2007 00:00:00 GMT

In an application for an indemnity under a professional indemnity claim in respect of a personal injuries claim, the successors to the insurers sought to resist the claim on the basis that the assured had failed to provide immediate notification of the occurrence of the claim. There were at least 16 previous claims the occurrence of which had not been notified to the insurers which nonetheless had been accepted. On notification of the claim the insurers had, not in correspondence relating to the detail of the claim, reserved their rights and went on to contact the third party’s solicitors requesting that correspondence be sent to the insurers. The assured sought to rely on the insurers’ conduct in dealing with its representatives and its historical treatment of others claims in establishing a waiver or estoppel. They were successful in respect of the insurers dealing with the particular claim.

Arbory Group Ltd v West Craven Insurance Services (QBD)_ 13/3/07

Tue, 13 Mar 2007 00:00:00 GMT

The company’s insurance broker had failed to advise it as to the correct method of calculating insured gross profit leading to it being significantly underinsured. Although the loss was suffered by the company’s subsidiaries, as it was clearly understood that the Claimant represented the totality of the business that was being conducted the claim could properly be brought by it as insurers’ would not have taken nor been able to take issue with the manner in which the insurance had been arranged. The Claimant was entitled to damages for loss of profit representing the difference between what he should have received had proper insurance been effected and what was received as well as the loss of profits caused by the non-receipt of business interruption monies. There was to be no deduction for contributory negligence as the company had read the form and the explanatory notes and could have done no more.

Halifax Life Ltd v The Equitable Life Assurance Society [2007] EWHC 503 (Comm) (13 March 2007)

Tue, 13 Mar 2007 00:00:00 GMT

Jurisdiction. The High Court had jurisdiction under the Arbitration Act 1996 s. 70 (4) to order a tribunal in an arbitration to set out its reasons in sufficient detail to allow the matter to be considered. Although the Court had no such statutory power it could by virtue of its inherent jurisdiction and case management powers or as a remedy in relation to the contractual appointment provisions order the expert to provide such reasons. The expert had not provided adequate reasons for various issues raised by one party and as such the appropriate course was to adjourn the hearing of the claim for a declaration that the determination was binding and enforceable, to direct the expert to state his detailed reasons and restore the hearing once the reasons were available.

Anders & Kern UK Ltd (t/a Anders & Kern Presentation Systems) v CGU Insurance Plc (t/a Norwich Union Insurance) [2007] EWHC 377 (Comm) (01 March 2007)

Thu, 01 Mar 2007 00:00:00 GMT

Insurance cover was provided for (i) damage to buildings caused by theft or attempted theft involving entry into the premises by forcible or violent means; and (ii) theft involving violence or threat of violence to directors or employees of the company. Cover under the first part was subject to a condition that an alarm system was in operation when the premises were unattended. If the system failed a key-holder would remain on-site unless insurers agreed otherwise. After the alarm system had been tampered with the company’s key-holder did not feel safe staying on the premises and left. Insurers were entitled to decline liability on the basis of the breach of the condition because the condition had become incorporated into the policy as the terms were standard terms and the company was aware that there were standard terms; there was no reason to imply a term in to the policy that the key-holder would be permitted to leave the premises when in fear of personal danger; and the burglary fell in to the first category of theft.

Fisk v Brian Thornhill & Son (A Firm) [2007] EWCA Civ 152 (28 February 2007)

Wed, 28 Feb 2007 00:00:00 GMT

In contribution proceedings between a retail insurance broker and a wholesale insurance broker, the retail broker was entitled to a 25% contribution to his liability to the client by reason of the wholesale broker’s breach of duties to both him and the insured in failing to advise that the risk was to be placed with a new underwriter (and not a renewal as described) and making unauthorised warranties.

Tradigrain SA & Ors v Intertrek Testing Services (ITS) Canada Ltd & Anr [2007] EWCA Civ 154 (CA) 28/2/07

Wed, 28 Feb 2007 00:00:00 GMT

An employee of the Defendant’s storage company permitted the Claimant’s product to be taken without prior payment. The Claimant suffered loss. The Defendant’s insurance policy extended to provide cover for the Claimant. Insurers sought to recover the sums paid out to the Claimant from the Defendant and its subsidiary on the basis that the loss had been caused by the wrongful acts or omissions of its employee. The policy contained a recourse clause against “representatives”. Although in German insurance law the word “representatives” was a term of art, it had been defined in the policy and was limited to a group including appointed directors. The employee had not been so appointed. In addition the “gross negligence” under German law involved a subjective and objective element which were not made out on the facts. Finally the Defendant was entitled to rely on a limitation clause even if gross negligence were to have been made out.

Noble Assurance Company & Anor v Gerling-Konzern General Insurance Company (UK Branch) [2007] EWHC 253 (Comm) (22 February 2007)

Thu, 22 Feb 2007 00:00:00 GMT

The captive insurer claimant provided cover against liability for events, exposure to conditions or use of the assured’s products causing personal injury or property damage. The policy contained an arbitration clause for resolution of disputes in London. The governing law was that of New York. A $50 million layer of reinsurance subject to an excess of $100 million was provided by the Defendant. This had previously been provided direct to the assured as excess insurance. An incident arose in respect of a joint venture in which a subsidiary of the assured. Reinsurers argued that they were only liable in respect of an apportioned share of the subsidiary. Settlement negotiations took place and the parties entered into a written agreement headed “Agreement to Arbitrate Dispute”. An arbitration then took place in London. Judgment was provided on 1 November 2006. Reinsurers then issued proceedings in Vermont seeking to restrain enforcement of the arbitrators’ decision and seeking to rescind the reinsurance agreement on the basis of non-disclosure, fraudulent and negligent mis-representation. In the Vermont proceedings, insurers argued that the claims were an abuse and amounted to res iudicata as they were essentially the same arguments as had been put forward in the arbitration proceedings. A second arbitration was then commenced in respect of the same issues in the Vermont proceedings. The English Court had previously granted a temporary injunction in respect of the Vermont proceedings on the basis that they were in breach of an arbitration agreement mandating arbitration in London and that they amounted to an abuse of process. In an application to continue the injunction the Court refused the application on the basis that justice would be better served by a declaration as to the parties’ rights rather than an injunction notwithstanding that the Vermont proceedings were “vexatious, oppressive, and an abuse of process and / or unconscionable”.

Tate Gallery (Board of Trustees of) v Duffy Construction Ltd & Anor [2007] EWHC 361 (TCC) (15 February 2007)

Thu, 15 Feb 2007 00:00:00 GMT

During works at the Tate Gallery a temporary water supply came apart between the coupling and valve. Significant water damage occurred. Insurers settled the Gallery’s claim. They then sought by way of a subrogated claim to recover against the contractor who had fitted the temporary water supply. The contractor was a co-insured under the Gallery’s policy in respect of certain specified perils including “flood, … bursting or overflowing of water tanks, apparatus or pipes”. The Court tried as preliminary issues whether the de-coupling was a specified peril under the JCT 1980 “flood” or “burst pipe” and set out factors to be considered in respect of a flood and the issues of co-insurance. Jackson J listed six factors in determining whether a “flood” had occurred: whether the source of water was natural; whether the source of water was external or internal; the quantity of water; the manner of its arrival; the area and character of property upon which the water was deposited; whether the arrival of that water was an abnormal event. He stated that “ultimately it is a question of degree whether any given accumulation of water constitutes a flood.” In considering whether there had been a bursting of apparatus or pipes, Jackson J identified three factors: whether the incident occurred because of internal pressure rather than external intervention; whether the integrity of the pipe or apparatus was broken; whether the incident was sudden and violent. A pipe can burst even where the component parts are not themselves damaged. On the co-insurance argument there was an implied term in the policy that one party could not sue another co-insured for loss or damage for which they were both co-insured. However this did not extend to the situation where the co-insured’s breach of policy meant that insurers were entitled to avoid cover. Thus to the extent that insurers could show that the contract was in breach of condition precedent to take reasonable precautions to prevent loss or damage, insurers could bring a subrogated claim.

Louise Jestina Phillips (as representative of the estate of Neville Britton Phillips, Deceased) v (1) Mohamed Ratiq and (2) the Motor Insurer’s Bureau ("MIB") CA (Civ) 14/2/07

Wed, 14 Feb 2007 00:00:00 GMT

Clause 6.1(e) of the Uninsured Drivers' Agreement 1999 provided an exception to the MIB's obligation to satisfy compensation claims where "the claimant" voluntarily allowed himself to be carried in an uninsured vehicle. Accordingly, the MIB was obliged to satisfy any judgment for damages obtained by the dependant of a deceased in a fatal accident claim against an uninsured driver, notwithstanding that the deceased knew that the driver was uninsured.

Equitable Life Assurance Society v Canada Life Ltd. [2007] EWHC 229 (Ch) (14 February 2007)

Wed, 14 Feb 2007 00:00:00 GMT

Business Transfer. In the circumstances, it was appropriate to sanction a scheme for the proposed transfer of part of an insurance business to another insurance company where the objections of policyholders did not warrant the disregarding of the views of the independent expert.

Phillips v Rafiq & Anor [2007] EWCA Civ 74 (13 February 2007)

Tue, 13 Feb 2007 00:00:00 GMT

MIB Claims. Clause 6.1(e) of the Uninsured Drivers' Agreement 1999 provided an exception to the MIB's obligation to satisfy compensation claims where "the claimant" voluntarily allowed himself to be carried in an uninsured vehicle. Accordingly, the MIB was obliged to satisfy any judgment for damages obtained by the dependant of a deceased in a fatal accident claim against an uninsured driver, notwithstanding that the deceased knew that the driver was uninsured.

Churchill Car Insurance v Kelly, High Ct, 08/02/2007

Thu, 08 Feb 2007 00:00:00 GMT

Heads of claim dishonestly put forward but proven. The fact that the respondent had dishonestly put forward unjustified heads of loss did not disentitle him in law from recovering such heads of loss as were indisputably made out.

Kyle Bay Ltd (t/a Astons Nightclub) v Underwriters CA (Civ Div) 7/2/07 (unreported)

Wed, 07 Feb 2007 00:00:00 GMT

Compromise. The assured had taken out a business interruption policy. After a fire the issue arose between loss adjusters acting for insurers and the assured as to whether the policy was declaration-linked or not. The schedule stated that the policy was declaration-linked. The policy terms were requested but not provided to the assured. Insurers’ loss adjusters maintained that the policy was based on gross-profits. Negotiations proceeded on the basis that the policy was not declaration-linked. After a compromise agreement was reached, the assured discovered that the policy was declaration-linked and therefore not subject to average. In seeking to set aside the compromise on the basis of negligent misrepresentation and / or common mistake, the Court of Appeal upheld the judge’s finding that whilst the common mistake was significant it did not render the agreement “essentially or radically” different and thus should not be set aside for common mistake. The judge’s finding that the assertion that the policy was non declaration-linked was a contention rather than a representation was upheld.

Stax Claimants v Bank of Nova Scotia Channel Islands Ltd & Ors [2007] EWHC 143 (Ch) (01 February 2007)

Thu, 01 Feb 2007 00:00:00 GMT

“After-the-event” insurance cover. In a group action of 45 claimants against the Bank of Nova Scotia & Ors directions were given in order to protect the claimants ATE cover until the substantive hearing listed for 2008. Although the parties had originally preferred a lead case approach, because of the third party actions brought by the Defendants, the reluctance of any of those third parties to be a lead case, the limitations of the ATE insurance cover to a per case basis and the allegations of fraud. The Court refused to make a final ruling pending further investigations in to the funding possibilities.

CA Blackwell (Contracts) Ltd v Gerling Allegemeine Verischerungs AG (2007) QBD 30/1/07 (unreported)

Tue, 30 Jan 2007 00:00:00 GMT

Losses incurred during a road construction project and caused by a combination of factors, including heavy rainfall; the nature of drainage employed at the site; and the quality of the materials used, were fortuitous and not inevitable losses and were covered by an "all-risks" policy of insurance.

C A Blackwell (Contracts) Ltd v Gerling Allegemeine Verischerungs-AG, High Ct (Comm) 30/01/2007

Tue, 30 Jan 2007 00:00:00 GMT

’All-risks’ policy. Losses incurred during a road construction project and caused by a combination of factors, including heavy rainfall, the nature of drainage employed at the site and the quality of the materials used, were fortuitous and not inevitable losses and were covered by an "all-risks" policy of insurance.

R+V Versic. Ag v Risk Ins. & Ors [2007] EWHC 79 29/01/07 (Comm)

Mon, 29 Jan 2007 00:00:00 GMT

Judgement. Although there were arguments as to whether the judgment had been rightly entered against two of the Defendants, those Defendants could not use the slip rule under CPR 40.12 or the powers under CPR 3.1 (7) to vary or revoke a Court order made where the necessary issues had been canvassed before the trial judge.

Bee v Jenson [2006] EWHC 3359 (Comm) (21 December 2006)

Thu, 21 Dec 2006 00:00:00 GMT

Road Traffic Accident. Where a replacement vehicle had been supplied to an insured driver through a company nominated by his insurers, after his car had been damaged in a road traffic accident, there was nothing in the principles of subrogation or in the hire agreement which prevented the driver from recovering the full cost of hiring the replacement vehicle given that the rate of hire was reasonable.

Bee v Jenson [2006] EWHC 3359 (Comm) (21 December 2006)

Thu, 21 Dec 2006 00:00:00 GMT

Subsequent to a road traffic accident the Claimant was provided with a hire car. The Defendant's insurers argued that he should not be liable for that part of the cost of hire which represented the commission paid by the hire company to the insurers and should be limited to the reasonable cost to the insurers of the cost of hire. Insurers were not permitted to go behind the rules of subrogation and to argue that a payment for which the Claimant was liable should be reduced.

English and American Insurance Company Ltd v AXA Re SA [2006] EWHC 3323 (Comm) (20 December 2006)

Wed, 20 Dec 2006 00:00:00 GMT

Summary Judgment and "WP" Correspondence. EAIC had provided professional indemnity insurance to an American company. EAIC along with a number of other insurers in the London Market became subject to multiple claims over several years. By the time these claims emerged, EAIC was in administration. EAIC's administrators were not prepared to agree to participate in the London Market settlement agreement. AXA had provided reinsurance to 100% of the policies issued by EAIC. When EAIC sought an indemnity AXA resisted payment. AXA claimed that EAIC's conduct in not negotiating in respect of the London Market agreement or at least liaising in this regard with AXA had prejudiced its position. After a mediation had taken place, in response to EAIC's request, AXA set out its position in a letter. AXA offered to indemnify EAIC up to the amount EAIC would have been liable to had it signed the London Market agreement. The letter stated that AXA was reserving its rights. AXA asserted that EAIC were not entitled to rely on the letter as it was subject to without prejudice privilege. The Court held that whilst EAIC were entitled to rely on the letter as it was not sent on a without prejudice basis. However on construction of the letter AXA were not estopped from denying liability. Nonetheless the Court could rely on it in the absence of any other evidence in granting summary judgment to the amount recognised in the letter on the basis that it was compelling evidence that AXA had no plausible defence.

English & Americal Insurance Co Ltd v AXA Re SA, High Ct (Comm) 20/12/2006

Wed, 20 Dec 2006 00:00:00 GMT

Summary judgment was granted to an insurer against a reinsurer on grounds that the insurer's settlement with the assured was, in law, the settlement of a claim that fell within the risks covered by the reinsurance contracts. The insurer was able to rely on purported "without prejudice" letters from the reinsurer as evidence that the reinsurer had no defence to a claim up to the sum specified therein.

St Paul Travelers Insurance Company Ltd v Dargan & Anor [2006] EWHC 3189 (Ch) (15 December 2006)

Fri, 15 Dec 2006 00:00:00 GMT

St Paul's provided professional indemnity insurance to Ballast. St Paul provided indemnity to Ballast in respect of a claim by a third party relating to a construction project. St Paul believed that Ballast had a valid claim for contribution from the Defendant sub-contractor. Payment in respect of certain invoices and remedial works was withheld by Ballast. In the meantime Ballast went in to administration. It was the view of the administrators and then liquidators that the claim for contribution by Ballast had limited prospects. After correspondence between the liquidators and those acting for St Paul, the liquidators served a notice under section 178 of the Insolvency Act 1986 with a view to permitting St Paul to take such steps as it wished. There was no assignment of the cause of action to St Paul. The sub-contractor disputed St Paul's rights to apply for a vesting order of the claim under section 181 (3) (a) of the Insolvency Act 1986 on the basis that it had an insufficient interest. The court accepted that a proprietary right in Ballast's cause of action was required and that St Paul had not acquired the same.

Zurich Professional Ltd v Karim & Ors (QBD) 15/12/06

Fri, 15 Dec 2006 00:00:00 GMT

Insurers sought a declaration that they were not liable to indemnify a firm on the basis that the mother of two of the partners who exercised control over its financial dealings had acted fraudulently and dishonestly. The policy excluded liability to the extent that any claim arouse out of "dishonesty or a fraudulent act or omission." Although the partners had not condoned all of the relevant acts or omissions they must have known or been reckless to the knowledge of the illegitimate flows of money into the firm and as such their conduct had been dishonest and Zurich were entitled to rely on the exclusion.

Alba Life Ltd. & Ors, Re [2006] EWHC 3507 (Ch) (08 December 2006)

Fri, 08 Dec 2006 00:00:00 GMT

Business transfer. The Court decided to sanction a proposed scheme of arrangement for the intended transfer of long-term insurance business on the basis that it was clear that the scheme would be fair to all classes of policyholders.

Richardson v Watson & Anor [2006] EWCA Civ 1662 (06 December 2006)

Wed, 06 Dec 2006 00:00:00 GMT

In a fatal accident case brought against an uninsured driver the widow of the deceased driver failed to notify the MIB within the relevant three month period from issuing the claim. By the time new proceedings were commenced the primary limitation period had passed. At first instance the judge followed Walkley v Precision Holdings and held that he would not in any event have exercised his discretion under section 33 of the Limitation Act 1980 in favour of the Claimant. The House of Lords in Horton v Salder overruled the decision in Walkley. On appeal the Court of Appeal held that as the claim would proceed in any event in the name of the Deceased's child as the Limitation period had not yet run as against that claim, section 33 could and should properly be exercised in favour of permitting the widow to bring her and her child's claim.

Brit Syndicates Ltd & Ors v Grant Thornton International & Anor [2006] EWCA Civ 1661 (06 December 2006)

Wed, 06 Dec 2006 00:00:00 GMT

Where a policy provided that a parent company would only be covered in respect of claims made against it arising from claims made against a related company "insured by the terms and conditions of the policy" cover would not apply to the parent company where the related company was not insured by reason of a material non-disclosure on inception however it would cover claims where liability to the related company could be avoided because of a breach of condition or a failure to meet a condition precedent to liability.

Colonial Fire and General Insurance Company Ltd v. Harry (Trinidad and Tobago) [2006] UKPC 53 (22 November 2006) (View without highlighting)

Wed, 22 Nov 2006 00:00:00 GMT

Third Party Rights. The Privy Council held that for the purposes of s. 10 (3) of the Motor Vehicles Insurance (Third-Party Risks) Act it was only necessary to join the policyholder and where the driver was a different individual, this was a matter of commercial judgment.

Poole & Ors v HM Treasury [2006] EWHC 2731 (Comm) Langley J 8/11/06

Wed, 08 Nov 2006 00:00:00 GMT

Implementation of Directive. Lloyds names were not entitled to bring a claim against the Government for the alleged failure to implement Council Directive 73/239/EEC. The Claimants had alleged that had the Government implemented the Directive by July 1976 then there would have been a system for ensuring that Lloyds' syndicates had adequate reserves to meet their liabilities. The purpose of the directive was to harmonise the direct sales of insurance to the retail public. It did not provide a right to insurers to be regulated. Had there been such a right it would have been time barred in any event.

KR & Ors v Royal & Sun Alliance Plc [2006] EWCA Civ 1454 (03 November 2006)

Fri, 03 Nov 2006 00:00:00 GMT

Third Party Rights. The Claimants brought proceedings for damages arising out of abuse in residential children's homes. Insurers participated in the trial of the claims against their assured. The Claimants succeeded against the assured and then sought to recover direct against insurers under the Third Parties (Rights against Insurers) Act 1930. Insurers sought to rely on an exclusion clause under the policy relating to deliberate acts of the insured. The perpetrator of some of the abuse was the director of the assured who had day to day overall control. The principle in Beresford v Royal Insurance Co Ltd [1938] AC 586 that an insured cannot recover for his own deliberate act should apply in construing the exclusion clause. On the facts as the perpetrator was in reality the company itself, the exclusion clause applied. In its modified version the exclusion was limited to those aspects of abuse caused by the senior employees.

Travelers Casualty and Surety Company of Canada & Ors v Sun Life Assurance Company of Canada (UK) Ltd & Anor [2006] EWHC 2716 (Comm) (01 November 2006)

Wed, 01 Nov 2006 00:00:00 GMT

Choice of law. As a result of an FSA requirement to review past business, Sun Life incurred significant losses and expenses. Sun Life sought an indemnity under its Financial Institution Professional Liability Policy with Travelers. Travelers declined liability on the basis of breach of warranty in that relevant officers knew as a realistic possibility that the FSA's investigations could give rise to a loss exceeding US$25,000,000; and failure to comply with the notification clause. The court did not need to determine whether the applicable choice of law rules were those set out in the Rome Convention or the Insurance Companies Act 1982 (now no longer in force) as the concepts of choice and closest connection lead to the same conclusion under both regimes. On the facts the parties impliedly chose the law of Ontario as the applicable law taking in to account that the only named company was the parent organisation whose principal address with in Toronto. The brokers were named in Marsh Canada Limited in Ontario. The Policy Period was determined by standard time in Ontario. Various other provisions were of particular reference to Ontario. Although none of the relevant officers knew or believed in the possibility of a disclosable warranty, a reasonable person in one of the individual's position would have disclosed the FSA investigation as part of the warranty. The notification clause was an innominate clause and insurers had not established sufficient prejudice by delay in notification. In any event the Court would have granted relief from forfeiture under Ontarian Law insofar as the notification clause was a condition precedent to liability.

Sea Trade Maritime Corporation v Hellenic Mutual War Risks Assn. (Comm) 18/10/06

Wed, 18 Oct 2006 00:00:00 GMT

In proceedings seeking relief form an Interim Award under sections 67 (jurisdiction), 68 (serious irregularity) and 69 (issues of law) of the Arbitration Act 1996, the incorporation and construction of the jurisdiction clause of the Rules was in issue. The Claimants contended that as the clause was not specifically referred to and the shipowners were unaware of it that it was not incorporated in to the contract. In principle English law accepts incorporation of standard terms by the use of general words and particularly so when the terms are readily available and the question arises in the context of dealings between established players in a well-known market. The principle does not distinguish between a term which is an arbitration clause and one which addresses other issues. In contrast a “stricter rule” is applied to charterparty/bills of lading cases. The exception is limited to that. Further the clause “in respect of any dispute or difference … arising out of or in connection with these Rules or out of or in connection with any contract between the Owner and the Association … by giving written notice of the election to the other, elect to have such dispute or difference referred to arbitration in London … the submission to arbitration and all proceedings therein shall be subject to the English Arbitration Act 1996 …” did not provide exclusive jurisdiction to the English Courts.

CGU International Insurance Plc & Ors v Astrazeneca Insurance Co Ltd. [2006] EWCA Civ 1340 (16 October 2006)

Mon, 16 Oct 2006 00:00:00 GMT

Challenging Arbitral Jurisdiction. AstraZeneca was the captive insurance company for a multinational group. CGU had reinsured with companies lead by CGU and RSA. The cover under the policy included liability to pay damages on account of property damage. A claim was made by an insured in respect of several third party claims arising out of a genetically modified corn-seed. Insurers settled the claim for $80 million. Reinsurers declined the claim on the basis that the insured’s liability arose not out of property damage but out of its own liabilities. The reinsurance dispute went to arbitration. The policy contained a service of suit clause relating to insureds operating in the USA which is where this claim arose. The arbitrators held by a majority that although English law applied, the US court would have held insurers liable and as the insurance was intended to be back-to-back, the reinsurers should be liable. It was common ground that English law governed both the insurance and reinsurance. The judge allowed an appeal on the basis that English proper law was determinative and that consequently the insured’s liability did not arise out of property damage. Insurers sought permission to appeal against the judge’s refusal under the Arbitration Act 1996 s. 69 (8). The Court of Appeal held that under settled principles the refusal by the judge of permission to appeal under this basis could not itself be appealed. However the Court of Appeal had a residual discretion in a case of unfairness in the decision-making process. On the facts before the Court there was nothing unfair or biased in that process.

Freakley & Ors v. Centre Reinsurance International Company & Ors [2006] UKHL 45 (11 October 2006)

Wed, 11 Oct 2006 00:00:00 GMT

Insolvency. Insurers provided cover against the company’s net loss which included established liabilities in respect of asbestos claims. A condition of the policy was that on an insolvency event or the reaching of a retained limit, insurers had the exclusive right to handle and defend claims and were entitled to reimbursement of their expenses. Insurers sought to recover these expenses under s. 19 (5) of the Insolvency Act on the basis that these expenses had a super-priority over the administrators’ remuneration and expenses. The House of Lords held that there was no reason to extend the administrator’s power under section 19 to cover expenditure that neither the administrator nor the court had specifically approved and thus insurers could not obtain such a priority.

Pearl Assurance (Unit Linked Pensions) Ltd, Re [2006] EWHC 2291 (Ch) (14 September 2006)

Thu, 14 Sep 2006 00:00:00 GMT

Business Transfer. Part VII of the Financial Services & Markets Act 2000 gives the court discretion to sanction an insurance business transfer scheme, which varies the contractual rights beyond what is necessary for the substitution of one party for another under the relevant insurance policies. However, before the court can exercise its discretionary power it must be satisfied that the jurisdictional conditions are met and that the scheme has been sufficiently brought to the attention of the policyholders (that the scheme is fair as between the different classes) and the FSA.

Ford Motor Co Ltd v Revenue & Customs UK VAT 31/8/06

Thu, 31 Aug 2006 00:00:00 GMT

Insurance Partnerships. Free insurance cover provided by Norwich Union and breakdown services provided by the RAC was given to customers of Ford as part of a promotion on the supply of certain models of the Ford car. The insurance issue between the parties was whether some part of the price paid by the customer was for the benefit of this “free” insurance and, as such, it would give rise to the supply of two separate agreements for VAT purposes: the car (being standard rated) and the insurance (being exempt). In the circumstances of this case, the Tribunal decided that the supply of the insurance could not be separate and distinct from the supply of the Ford car and therefore the appeal by Ford that the free insurance given to customers should be exempt was dismissed.

Forrest & Ors v Glasser & Anor [2006] EWCA Civ 1086 (31 July 2006)

Tue, 29 Aug 2006 00:00:00 GMT

Breach of warranty. A time bar clause in an agreement, which required any claim to be notified in writing within a given time limit, should be interpreted according to the natural and ordinary meaning of the words. It was decided the word ‘claim’ did not require a further definition. In this case, the Court of Appeal held that any reasonable recipient of the notification letter would have understood it to be a claim for breach of warranty and no particulars had to be given of that claim.

Caitlin Syndicate & Ors v Adams Land & Cattle Co (QBD) 20/7/06

Thu, 20 Jul 2006 00:00:00 GMT

Conflict of Laws. The insurance slip stated that the policy was governed by “UK law and jurisdiction”. The contract held a service of suit clause providing the assured with a contractual right to elect the jurisdiction of a court in Nebraska. The assured exercised his right to do so. Insurers brought proceedings on the basis that there were issues of construction of the contract in respect of English law that were to be determined and that would not be considered in the Nebraskan court where it was likely that the choice of English law would be found to be invalid. Where there was an express contractual right that prevailed notwithstanding the other connecting factors to the English court.

Goshawk Dedicated Limited v ROP Inc (Comm) 12/7/06

Wed, 12 Jul 2006 00:00:00 GMT

Injunction. Goshawk, a syndicate in run-off, sought an anti-suit injunction to prevent ROP Inc from continuing in its application before the Federal Court in Georgia, USA to intervene in proceedings between Goshawk and related parties and from an anti-suit injunction in respect of Goshawk’s arbitration proceedings in the United Kingdom. The court concluded that Goshawk’s arguments that the assureds were likely to be bound by the English arbitration clause were likely to succeed and granted the injunction.

Talbot Underwriting Ltd v Nausch, Hogan & Murray Inc [2006] EWCA Civ 889 (29 June 2006)

Thu, 29 Jun 2006 00:00:00 GMT

Brokers. In proceedings against the brokers for a failure to procure suitable insurance on a shipbuilders' all risks policy, the Court rejected the brokers' arguments that whilst the ship-builder was not expressly identified as a co-assured as instructed, cover extended by way of the "additional assured" clause or on the basis that the shipowner was an undisclosed principal. The "additional assured" clause anticipated the possible nomination of the same. There had been none. The issue of whether the ship-owner could be an undisclosed principal would fail if insurers had expressed an intention that they were unwilling to contract with anyone other than those identified in the slip. The omission of the ship-builder and all sub-contractors was an implicit indication that the insurers were not willing to contract with them. The non-disclosure of an undisclosed principal may well be material if it precludes a potential subrogated recovery in the name of the identified assured against the undisclosed principal.

ING Re (UK) Ltd v R&V Versicherung AG (Comm) 29/6/06

Thu, 29 Jun 2006 00:00:00 GMT

Ostensible Authority. The issue for the court was whether the Defendant was bound by an insurance contract signed by an agent supposedly on its behalf, but without authority to do so, on the grounds that either the agent had ostensible authority to act or, if not, that the Defendant had ratified the contract. The case concerned an 85% reinsurance treaty in relation to the 2002 Block Quota Share Treaty (quota share treaty) that was an agreement made by Risk Insurance and Reinsurance Solutions (Risk) a name used by a group of companies authorised to bind the reinsurer to indemnify the reinsured for all losses of whatsoever nature arising under business ceded to their quota share treaty. On the facts, the Defendant had not represented to the Claimant that an agent had authority to conclude a contract concerning the Claimant’s liability under the quota share treaty on the Defendant’s behalf, nor had the Defendant ratified the contract after the event. Whilst it was unfortunate for the Claimant that it had entered into the quota share treaty in its belief in good faith that Risk had the Defendant's authority to act on its behalf, the Defendant had not represented to the Claimant that Risk had such authority nor had the Defendant ratified the contract.

Harper Versicherungs AG v Indemnity Marine Assurance Company Ltd & Ors [2006] EWHC 1500 (Comm) (23 June 2006)

Fri, 23 Jun 2006 00:00:00 GMT

Arbitration. The arbitrator had correctly permitted the substitution of the Claimants where the original parties had transferred their business under FSMA 2000 Part VII. The scope of the arbitration appointment extened to all sums due under the reinsurance contracts arising during the currency of the arbitration proceedings and was not limited to those outstanding at the time of appointment.

Stemson v. AMP General Insurance (NZ) Ltd (New Zealand) [2006] UKPC 30 (21 June 2006)

Wed, 21 Jun 2006 00:00:00 GMT

Liability. The Claimant appealed to the Privy Counsel against a decision of the New Zealand Court of Appeal upholding a decision of the lower courts that the Defendant was entitled to avoid liability under the insurance policy. Stemson owned a property, which had been partially destroyed by fire. He made a claim on his insurance policy and following an investigation, there was overwhelming evidence that Stemson had started the fire deliberately. The Claimant’s insurance claim was taken to have been fraudulent from the outset. The Privy Council dismissed the appeal against the findings of fact in the lower courts as it could not be said that salient facts had been overlooked or that an erroneous view had been taken of the evidence.

Shinedean Ltd v Alldown Demolition (London) Ltd & Anor [2006] EWCA Civ 939 (20 June 2006)

Tue, 20 Jun 2006 00:00:00 GMT

In a public liability all risks insurance policy with a condition precedent that the insured provide all documentation it was an implied term that compliance with that condition had to be within a reasonable time. The question of whether the insurer was prejudiced by any delay should be excluded or included when assessing reasonable time was not determinative.

Diab v. Regent Insurance Company Ltd (Belize) [2006] UKPC 29 (19 June 2006)

Mon, 19 Jun 2006 00:00:00 GMT

An insured was still required to comply with the conditions relating to the presentation of a formal written claim with adequate particulars of loss and damage where an insurer had repudiated liability on an unconnected ground. There was no rule of law to the contrary in either the UK or Belize.

Horton v. Sadler & Anor [2006] UKHL 27 (14 June 2006)

Mon, 19 Jun 2006 00:00:00 GMT

Limitation. Where a claimant in a personal injury action had initially issued proceedings before the time limit had expired and then had a brought a second action in respect of the same injuries after time limited had expired, the court could use its discretion under the Limitation Act 1980 s.33 to disapply the three-year time limit. The decision in Walkley v Precision Forgings Limited [1979] 1 W.L.R. 606 was overruled as it had deprived claimants of a right that Parliament had intended them to have.

Heath Lambert Ltd v Sociedad De Corretaje De Seguros & Anor [2006] EWHC 1345 (QB) (09 June 2006)

Fri, 09 Jun 2006 00:00:00 GMT

Lien. A reinsurance broker, who had placed reinsurance for an insurance company and had paid the premium to the reinsurers, had a lien over the proceeds of the policy against the insurance company and its intermediaries and was entitled to maintain the lien until the premium was paid or the claim was in some other way satisfied.

Exfin Shipping (India) Ltd v Tolani Shipping Co Ltd [2006] EWHC 1090 (Comm) (17 May 2006)

Wed, 17 May 2006 00:00:00 GMT

Construction. This was an application to set aside a decision made after arbitration. It raised issues in relation to the proper construction of references in the arbitration clauses and it highlighted a dispute as to whether the English or Indian court would be the proper forum to take in order for the claimant to seek judgment. The application to set aside the arbitration decision was dismissed based on the decision that 'where non-payment was in issue then a dispute shall be deemed to have arisen'.

Konkola Copper Mines Plc & Anor v Coromin Ltd. & Ors No.2 [2006] EWHC 1093 (Comm) (16 May 2006)

Tue, 16 May 2006 00:00:00 GMT

Jurisdiction. In this case the insurance was an all risks insurance policy, which was to include mine disaster in Nchanga, Zambia. There was parallel cover both containing a 'Zambia Law and Jurisdiction Clause' as well as an 'English Law and Jurisdiction Clause' for the specific perils. The Court decided that the placing brokers (Aon, Zambia) and the insurers would have provided for the relevant provisions of the Zambian Insurance Act, which refers to the rights to enforce the insurance policy in any competent court in Zambia, which meant that the Zambian Law and Jurisdiction should prevail.

Great North Eastern Railway Ltd v Jardine Insurance Services Ltd (QBD) 10/05/06

Wed, 10 May 2006 00:00:00 GMT

Insurance Policy. The claimant's claim under its insurance policy was denied, leading to proceedings being brought by the claimant against the insurer. The dispute concerned the applicable wording of the policy and hence the scope of the insurance cover. Both at first instance and on appeal, the claimant was unsuccessful. The claimant later brought a claim against Railtrack and successfully recovered damages in a separate action for negligent work on the train, which had led to derailment. In the current action the claimant sought to recover from its insurance brokers, whom it contended had breached its duty of care in placing the insurance, which led to claimant's insurers declining the claim. The court dismissed the defendant's attempt to strike out this matter because there was a reasonable case the duty owed to place the insurance correctly continued up to the date of the derailment.

Great North Eastern Railway Ltd v JLT Corporate Risks Ltd [2006] EWHC 1478 (QB) (10 May 2006)

Wed, 10 May 2006 00:00:00 GMT

Limitation and Expert Evidence. The Claimant’s business interruption policy contained a faulty workmanship clause. As a result of faulty workmanship by repairers the Claimant suffered significant loss. Proceedings were brought against the repairers. The Claimants sought to recover the balance of their losses from the brokers who had placed the policy. The brokers sought to rely on a limitation defence. In response the Claimant alleged that the brokers were under a continuing duty even after placing the policy to advise the Claimant as to the exclusion clause. As expert evidence relating to the broker’s duty would be relevant to the issue of limitation it was unsuitable to be dealt with as a preliminary issue. The use of separate proceedings was not an abuse of process nor did it amount to a collateral attack on the proceedings against the repairer.

Winterthur Swiss Insurance Company & Anor v AG (Manchester) Ltd & Ors Rev 1 [2006] EWHC 839 (Comm) (12 April 2006)

Wed, 12 Apr 2006 00:00:00 GMT

Legal Professional Privilege. This case concerns 'After the Event' (ATE) legal expenses insurance in relation to litigation funding. The Accident Group developed a scheme referred to as the TAG Scheme in order to issue ATE policies to claimants whose claim successfully passed all of the 'vetting' stages of the TAG Scheme. The fourth stage of the vetting process required that a panel of solicitors would ensure that the claimants purported claim had a greater than 50% chance of success. In this case an action was brought against the panel solicitors for breach of contract. It was alleged that the TAG Scheme had resulted in excessive losses as results of the panel of solicitors' breach of contract and duty under the TAG Scheme. The court allowed the Claimants in this case to have disclosure of pre-ATE and post-ATE policy documents because any privilege in favour of the TAG Scheme claimants could not in the circumstances be asserted against the insurers.

Blackburn Rovers Football and Athletic Club Plc v Avon Insurance Plc & Ors [2006] EWHC 840 (QB) (12 April 2006)

Wed, 12 Apr 2006 00:00:00 GMT

Construction. On a claim arising under a Personal Accident Policy following an injury during training to one of the Claimant’s players which lead to his retirement, insurers declined to pay out on the policy on the basis that the player was suffering from constitutional degenerative disc disease which was a cause of the injury and thus excluded. The judge upheld insurers’ position.

Sun Alliance & London Insurance Plc & Ors v PT Asuransri Dayin Mitra TBK [2006] EWHC 812 (Comm) (11 April 2006)

Tue, 11 Apr 2006 00:00:00 GMT

Construction. Insurers were entitled to negative declarations in respect of claims for losses arising out of damage to a tanker caused by grounding because the tanker was warranted in a tanker class in which it was not and the risk insured had not attached at the time of the accident.

McMinn v McMinn & Anor [2006] EWHC 827 (QB) (11 April 2006)

Tue, 11 Apr 2006 00:00:00 GMT

Road Traffic Act 1998. After a road traffic accident in which the Claimant suffered serious personal injuries, the vehicle owner’s insurers repudiated any liability to indemnify the Claimant as the vehicle was being driven without the owner’s permission. In construing section 151 (4) of the Road Traffic Act 1998 the word “knew” was limited to actual knowledge or such knowledge as the law regards as equivalent to it, but that “had reason to believe” extended to the information which would have afforded good reasons for believing that the vehicle had been stolen or unlawfully taken. On the facts of the case the use of the vehicle amounted to a repudiation of the rights of the owners.

Dornoch Ltd & Ors v Mauritius Union Assurance Company Ltd & Anor [2006] EWCA Civ 389 (10 April 2006)

Mon, 10 Apr 2006 00:00:00 GMT

Incorporation of Terms. One of three 100% back to back reinsurance policies contained a Mauritius jurisdiction clause. The underlying policies consisted of a primary bankers blanket policy covering a variety of risks including employees’ infidelity, premises and transit and two excess policies. The primary and excess policies were subject to Mauritius law and jurisdiction. The primary policy was reinsured in the bankers blanket market and led by Munich Re. This was subject to Mauritius law and jurisdiction. The excess infidelity policy was also reinsured in the same market with Munich Re as leader. Unlike the primary policy there was no jurisdiction clause in the wording. The excess premises and transit policy was reinsured by the Defendants in the specie (high value) market because of the particular contents of the vaults. The cover was written on a slip policy with an excess 50m Mauritian Rupees any one loss. The conditions referred to a “Jurisdiction Clause”. As choice of law and jurisdiction clauses are important, clear words of incorporation are required. In the insurance context where the contracts concerned are back to back and cover the same subject matter and interest incorporation is more likely to have been intended than where the contracts are not so closely connected. The general words “to follow all terms and conditions of the primary policy together with riders and amendments thereto covering the identical subject matter and risk” were insufficient to incorporate the jurisdiction clause. The words “jurisdiction clause” on its own was meaningless. Per Curiam: The Court encouraged a more restrictive use of authorities and submissions citing Lord Radcliffe in Vitkovice v Komer. In construing whether a contract contained a jurisdiction law, the law of the forum should be used. The question to be determined was not whether the reinsured had a good arguable case that the reinsurance policy had a Mauritius jurisdiction clause but rather whether reinsurers had a good arguable case that the reinsurance policy did not contain a Mauritius jurisdiction clause.

North Star Shipping Ltd & Ors v Sphere Drake Insurance Plc & Ors [2006] EWCA Civ 378 (07 April 2006)

Fri, 07 Apr 2006 00:00:00 GMT

Disclosure. Determining whether contested allegations of dishonesty are material facts to be disclosed is a matter of fact for evidence and that on the facts of the case charges in criminal proceedings were disclosable.

Heesens Yacht Builders BV v Cox Syndicate Management Ltd. & Anor [2006] EWCA Civ 384 (06 April 2006)

Thu, 06 Apr 2006 00:00:00 GMT

Construction. The Red Sapphire was subject to a claim against its builders under a guarantee clause in the shipbuilding contract. On construction of the wording of the yacht builder’s insurance policy it covered the construction of vessels only when that construction had commenced during the period of the insurance and not when delivery had taken place.

Euler Hermes UK Plc v Apple Computer BV [2006] EWCA Civ 375 (04 April 2006)

Tue, 04 Apr 2006 00:00:00 GMT

Compromise. Euler issued a policy of insurance to Apple in respect of losses resulting from the failure of trade debtors to pay amounts due from them. As a result of a disagreement between Apple and a distributor in Saudi Arabia, the distributor withheld payment on invoices of approximately US$560,000. A claim was made under the policy. The insurers were led to believe that Apple would without delay pursue the distributor through legal proceedings. Subsequently Apple decided not to take such action. Euler indicated that subject to conditions including references to legal action that it was prepared to meet the claim. The broker did not pass on all of the correspondence containing the conditions relating to legal action. However as Apple’s agent this was irrelevant. Payment was made. The insurers sought damages for breach of a condition of the settlement or the underlying obligations of the policy. The Court of Appeal held that the terms of the covering letter were incorporated into the settlement agreement and that Apple was required to pursue its claim against the distributor. Had Apple done so it would have recovered substantial amounts of its loss and therefore Euler’s payment. By not exercising his rights of subrogation had not breached its duty to mitigate its loss.

HIH Casualty and General Insurance Ltd. v JLT Risk Solutions Ltd [2006] EWHC 485 (Comm) (15 March 2006)

Wed, 15 Mar 2006 00:00:00 GMT

Brokers. Once a broker has placed insurance and reinsurance, the extent of his duty to advise the insurer post-placement would depend on the facts of each case. Insofar as documents provided to the broker raised concern in respect of coverage issues, the broker should have advised the insurer and reinsurers. However where reinsurers would have taken the same stance in avoiding the reinsurance there could be no recovery.

BP Plc v AON Ltd & Anor [2006] EWHC 424 (Comm) (13 March 2006)

Mon, 13 Mar 2006 00:00:00 GMT

Brokers. An insurance broker acting under a service agreement in respect of assisting the Claimant in respect of policies under a global construction all-risks open-cover agreement for oil and gas projects only notified the Lead Underwriter when he should have provided notice to each of the relevant underwriters. The Claimant was entitled to infer from what was said and done that the broker was to provide its professional services with regard to declarations to the professional standards of an insurance broker on the London and European markets. The terms of the service agreement did not displace the duty of care and the contractual structure did not prevent an assumption of responsibility in tort. The broker had breached its duty of care as and when it failed to make timely declarations to the relevant underwriters. The first the Claimant could reasonably have ascertained that it could not recover under the open cover was when a court in an earlier action between the Claimant and underwriters had held that declarations should have been made to each underwriter. The Claimant’s decision not to take out alternative insurance at any stage before its pleaded losses were sustained was not in all the circumstances so great a departure from what could reasonably be expected from an oil company as to break the chain of causation or to represent conduct so unreasonable as to amount to a failure to mitigate. The measure of damages was therefore to be based on the amounts that would have been recovered from the underwriters to whom declarations had not been made.

Brit Syndicates Ltd & Ors v Italaudit SPA & Anor [2006] EWHC 341 (Comm) (03 March 2006)

Fri, 03 Mar 2006 00:00:00 GMT

GTI was the umbrella corporation managing and maintaining a worldwide organisation of member firms which practice under the Grant Thornton name. GTI sought an indemnity under its composite Professional Indemnity Policy with insurers. GTI was an assured firm in respect of claims “arising from claims made against a member firm of GTI insured by the terms and conditions of the policy”. Insurers avoided the insurance of Italaudit on the grounds of misrepresentation and non-disclosure at inception. They then refused to indemnify GTI in respect of claims relating to Italaudit. They contended that as by dint of their avoidance of Italaudit's polciy, it was not an assured firm, for the purposes of the clause and therefore there was no cover under the GTI extension. The Court rejected this construction and concluded that the clause was to be construed more broadly to give effect to its purpose.

Evans v Secretary of State for the Environment, Transport & the Regions & MIB QBD Judge Mackie QC 16/2/06

Thu, 16 Feb 2006 00:00:00 GMT

The Claimant had been injured by a car. The car did not stop. A claim was brought against the MIB. The MIB awarded compensation but no interest to the Claimant and made a deduction for contributory negligence and ordered the Claimant to pay the arbitrator’s fee. The Claimant then sought damages against the Secretary of State for an alleged failure to implement Council Directive 84/5 on the basis that had the Directive or the Untraced Drivers Agreement been properly implemented he would have secured a higher award including interest. The Court found on the Secretary’s application for summary judgment that the Claimant had no real prospect of success save in respect of the argument relating to the arbitrator’s fee. Given that the damages claim would not exceed what had already been offered by way of compromise and that the matters complained of had been rectified by the recent Untraced Drivers Agreement 2003, continuation of the action would be an abuse of process.

Goshawk Dedicated Ltd & Ors v Tyser & Co Ltd & Anor [2006] EWCA Civ 54 (07 February 2006)

Tue, 07 Feb 2006 00:00:00 GMT

As an established practice of the Lloyd’s market, the broker shall make documents available to the underwriter and it was an implied term of the Terms of Business Agreement that Lloyd’s brokers were to allow the syndicates in run off to inspect the placing and claims documents that had previously been shown to the syndicates. It followed that, when they were given reasonable notice, the brokers were also obliged to allow the syndicates to inspect and copy premium accounting documents.

Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd. & Anor [2006] EWCA Civ 50 (06 February 2006)

Mon, 06 Feb 2006 00:00:00 GMT

Disclosure: The Council was liable to a former employee in respect of significant damages arising out of exposure to asbestos. The Council had public liability policies with different insurers for the the period of exposure and for when the symptoms first manifested themselves many years later. The Court held that for asbestos-related disease the appropriate public liability policy was that which covered the period when the disease was first discovered. It was not in force at the time of the initial exposure. This was consistent with the distinction in wording between public-liability for injuries "occurring" during the period of insurance as opposed to employer's liability for injuries "caused".

R+V Versicherung Ag v Risk Insurance and Reinsurance Solutions SA & Ors [2007] EWHC 79 (Comm) (29 January 2007)

Sun, 29 Jan 2006 00:00:00 GMT

Damages: The claimant was a major reinsurance company and the defendants were insurance intermediaries. The defendants entered into a scheme, which enabled them to obtain as much commission as possible contrary to the interests of the claimant. The claimant terminated all agreements with the defendants and was entitled to recover the costs for the additional claims handling staff needed in respect of business written after the agreements were terminated.

Enterprise Oil Ltd v Strand Insurance Company Ltd [2006] EWHC 58 (Comm) (26 January 2006)

Thu, 26 Jan 2006 00:00:00 GMT

Indemnity Policy: The claimant insured’s cover was for indemnity under an insurance liability policy with its captive insurance company, the defendant. The claim for indemnity was said to arise from the claimant's liability to pay its proportion of a Settlement Agreement, which was concluded on 14th March 2002, with other plaintiffs in Texas, USA. The applicable law for the indemnity policy was English law and therefore Enterprise had to establish that it was indemnified for its share of the sums paid out under the policy. There were a number of issues that the court had to decide especially given that it had to consider the question of whether the defendant was liable to the claimant in the Texas proceedings. The court dismissed the claim as it was decided that the defendant was not liable to the claimant for any of the issues raised.

KR & Ors v Royal & Sun Alliance PLC (QBD) 26/1/06

Thu, 26 Jan 2006 00:00:00 GMT

The insurers provided a Combined Risks liability policy to a number of schools. Various acts of child abuse took place at the schools which formed the subject of successful civil proceedings. With the schools in liquidation third party proceedings were brought against insurers. In the absence of detailed evidence and on the basis of insurers' computer records the Claimants failed to establish that insurers were on risk at the outset of the relevant period. Insurers could not rely on an exclusion in respect of deliberate acts as although the abuse had arisen from deliberate acts of individuals they were not deliberate acts of the company.

Hawley v Luminar Leisure Ltd & Ors [2006] EWCA Civ 18 (24 January 2006)

Tue, 24 Jan 2006 00:00:00 GMT

The Claimant received permanent brain damage after being struck by a doorman outside the nightclub owned by the First Claimant. Insurers provided tailored Combinder Cover for "accidental" bodily injury to any person. "Accidental" was defined in the policy as "sudden, unforeseen, fortuitous and identifiable". Insurers refused indemnity on the basis that the bodily injury was not "accidental". In rejecting this Defence, the Court of Appeal found that the commercial context of the policy meant that "accidental" was to be construed from the employer's perspective and not from that of the individual employee.

Curzon Insurance Ltd v Centre Reinsurance International Co (ChD) 21/12/05

Wed, 21 Dec 2005 00:00:00 GMT

Settlement. The court made a declaration that the insurer of an insolvent company would not be in breach of the terms of a reinsurance agreement by entering into a settlement agreement with one of the parties to the reinsurance agreement for the purpose of reducing that party's liability under the reinsurance agreement

G Absolom v TCRU Ltd (CA) 19/12/05

Mon, 19 Dec 2005 00:00:00 GMT

Construction. The insurance and reinsurance brokers take their remuneration by negotiating with the insurers and reinsurers and not by arrangements with their own principals who are the insured and the reinsured. This case considered the issue in relation to the premium paid by the insured and the reinsured, which would normally include the remuneration paid to the brokers. The brokers would be entitled to a percentage of the premium, which includes the deposit. A deposit is part payment, usually in advance, of what is expected eventually to be a greater amount. It should not be considered separate from that greater amount.

Markel International Company Ltd v Craft & Ors [2006] EWHC 3150 (Comm) (12 December 2006)

Mon, 12 Dec 2005 00:00:00 GMT

Insurers were unable to obtain an interlocutory anti-suit injunction to restrain proceedings brought by third parties to the insurance despite the terms providing for the exclusive jurisdiction of the English courts. At most insurers would be entitled to a declaration that relief should be by way of proceedings in the English court.

Bonner v Cox Dedicated Corporate Member Ltd (CA) 8/12/05

Thu, 08 Dec 2005 00:00:00 GMT

Where the principle in the case of Pheonix v Halvanon in relation to “the ordinary practice of the market” may be easy to state, it was not at all easy to ascertain. The Court of Appeal rejected the question as to whether this principle applied with respect to the facts in this case and also found that there was no general duty of care owed by underwriters who participated in an open cover to excess of loss reinsurers.

CGU International Insurance Plc & Ors v Astrazeneca Insurance Company Ltd [2005] EWHC 2755 (Comm) (01 December 2005)

Thu, 01 Dec 2005 00:00:00 GMT

Applicable Law. This case considered whether Iowa law (or US law) should apply to a reinsurance contract or whether it should be English law. This question had to be determined because there was a very significant difference between the substantive Iowa law and English law in relation to what constitutes “damages on account of … Property Damage”. Where an insurance contract provides for an express choice of English governing law then that should be self-evident.

Financial Services Compensation Scheme Ltd v Larnell (Insurances) Ltd [2005] EWCA Civ 1408 (29 November 2005)

Tue, 29 Nov 2005 00:00:00 GMT

Limitation: Where a claim was not statute barred at the time of the winding up of a company, the limitation period ceased to run and a claim could be brought after the relevant periods in sections 14A and B of the Limitation Act 1980. That the proceedings were a preliminary step to a claim under the Third Parties (Rights against Insurers) Act 1930 made no difference.

HSBC Rail (UK) Ltd v Network Rail Infrastructure Ltd (CA) 25/11/05

Fri, 25 Nov 2005 00:00:00 GMT

No Loss: The Claimant owner of railway carriages hired to a third party was only entitled to sue for damage to those carriages to the extent that its reversionary interest had been affected. As the carriages had either been repaired or the equivalent value made over to the Claimant, it had suffered no loss unless in negligence. As the Claimant did not have any right of possession, the general rule would not be displaced. The insurance in respect of the Claimant and the third party was that the third party's liability to the Claimant had been indemnified and the insurance sums were relevant in assessing whether any loss had been suffered by the Claimant.

Mundi v Lincoln Assurance Ltd [2005] EWHC 2678 (Ch) (24 November 2005)

Thu, 24 Nov 2005 00:00:00 GMT

Non Disclosure: Insurers were entitled to avoid a life policy where the assured had failed to disclose treatment for alcohol consumption 15 months before re-instatement of the policy as it was evidently material and on the evidence insurers had relied upon the representation.

R + V Versicherung AG v Risk Insurance and Reinsurance Solutions SA & Ors [2005] EWHC 2586 (Comm) (18 November 2005)

Fri, 18 Nov 2005 00:00:00 GMT

Costs against Non-Party: An order for costs was made against a non-party who had been found to be engaged in the conspiracy, which had formed the subject of the proceedings.

BP Plc v AON Ltd & Anor [2005] EWHC 2554 (Comm) (16 November 2005)

Wed, 16 Nov 2005 00:00:00 GMT

Where there is a non-exclusive jurisdiction clause, it is sufficient to show that although the courts of the selected jurisdiction may be appropriate there is a clear balance of justice and fairness as between the parties in favour of the other party. There was insufficient risk of injustice in having the case tried in the chosen jurisdiction to have the matter determined in the non-selected jurisdiction. Where the claim is statute barred under the selected law then the Court cannot give permission to amend outside of the limitation period under CPR 17.4 (2).

Henry v British Broadcasting Corporation [2005] EWHC 2503 (QB) (11 November 2005)

Fri, 11 Nov 2005 00:00:00 GMT

Funding: A party was entitled to know the extent of the other party's legal costs insurance cover. Further an opposing party should be advised if the estimated costs of the action had risen substantially. However a costs capping order should operate prospectively and would not normally be imposed shortly before trial.

Papworth & Anor v Co-Operative Insurance Society Ltd [2005] EWHC 2454 (QB) (11 November 2005)

Fri, 11 Nov 2005 00:00:00 GMT

Compromise: Insurer agreed to fund building works arising out of a flood claim on a household policy. The building works were unsatisfactory. At a without prejudice meeting, the insurer agreed to fund the costs of a further investigative survey. That did not amount to an agreement to fund additional works.

Talbot Underwriting Ltd. v Nausch Hogan & Murray [2005] EWHC 2359 (Comm) (31 October 2005)

Mon, 31 Oct 2005 00:00:00 GMT

Brokers: The broker failed to make a company a co-assured on a policy. Although the policy covered "associated" and "interrelated" companies that did not stretch to parties who were in a purely contractual relationship. There could therefore be no promise such that the company could be the beneficiary of a trust or to benefit as an undisclosed principal.

Gerling General Insurance Co & Ors v Canary Wharf Group Plc [2005] EWHC 2234 (Comm) (28 October 2005)

Fri, 28 Oct 2005 00:00:00 GMT

In construing whether damage is “imminent” it should in the first instance be considered prospectively and objectively. Where a crane had collapsed during “self-climbing” operations, there was a strong possibility that other such operations would suffer the same fate but costs incurred in reducing that risk were not costs incurred to avoid “imminent” damage.

Tyndall v Battersea Dogs Home [2005] EWHC 90011 (Costs) (16 September 2005)

Fri, 16 Sep 2005 00:00:00 GMT

Costs: The Court considered the reasonableness of selecting a Europ Assistance ATE insurance policy with and the level of the premium on a rising staged payment basis in a standard fast track road traffic accident personal injury case.

Dornoch Ltd. & Ors v The Mauritius Union Assurance Company Ltd. & Anor [2005] EWHC 1887 (Comm)

Fri, 19 Aug 2005 00:00:00 GMT

Conflict of Laws: For the purposes of a determining the applicable law in a reinsurance contract under the Rome Convention, in the absence of a choice of law clause, the place of payment of the reinsurance was determinative under Art. 4 (2).

Mora Shipping Inc of Monrovia, Liberia v Axa Corporate Solutions Assurance Sa & Ors [2005] EWCA Civ 1069 (28 July 2005)

Thu, 28 Jul 2005 00:00:00 GMT

Conflict of Laws: Where EU domiciled insurance companies had an option to make payment in respect of a general average clause outside of the UK, in the absence of an exclusive jurisdiction clause, they were to be sued in the countries of their domicile under Council Regulation 44/2001 and the Lugano Convention 1988.

Willis -v- Cable & Wireless and Pender , CA, 21/07/05

Thu, 21 Jul 2005 00:00:00 GMT

Certainty of Contract: The Claimant had entered into an agreement not to contest issues of liability for the acts of its employee. The parties signed a letter of agreement but it was subject to a caveat that the parties would agree how to calculate the method of compensation. The Court of Appeal concluded that when read together, this did not constitute an agreement of sufficient certainty for it to be enforceable.

Tektrol Ltd v International Insurance Company of Hanover Ltd & Anor [2005] EWCA Civ 845 (21 July 2005)

Thu, 21 Jul 2005 00:00:00 GMT

Construction: A company’s business was dependent on computer source code which was lost by a computer virus and theft of two computers. An exclusion clause in respect of “loss of information on computer systems caused deliberately by malicious persons” did not apply in respect of the virus as it had not been specifically directed at the company. The exclusion in respect of “other loss of information on computer systems” did not apply to the theft of the hardware.

Tioxide Europe Ltd v CGU International Plc & Ors [2005] EWCA Civ 928 (20 July 2005)

Wed, 20 Jul 2005 00:00:00 GMT

Notification: The insured was unable to recover in respect of excess global liability policies where it had failed to comply with the strict requirements of the notification provisions and on the construction of the clause notification by brokers was insufficient. Even though not expressly pleaded, the insurers were entitled to rely on the point as no unfairness had been caused.

Advent Capital Plc v GN Ellinas Imports- Exports Ltd & Anor [2005] EWHC 1242 (Comm) (16 June 2005)

Thu, 16 Jun 2005 00:00:00 GMT

Jurisdiction: The acceptance by Cyprus of Council Reg 44/2001 on its accession to the EU operated to stay insurers’ claim in the English Courts. It did not permit the assured to override the exclusive jurisdiction clause.

OT Africa Line Ltd v Magic Sportswear Corporation & Ors [2005] EWCA Civ 710 (13 June 2005)

Mon, 13 Jun 2005 00:00:00 GMT

Conflict of Laws: Where the parties had an exclusive English jurisdiction clause and had agreed English law would apply, the Court would not stay the English proceedings because of the existence of proceedings brought by cargo interests under the Canadian Marine Liability Act. Further despite the Canadian act the Court would grant an injunction to restrain the Canadian proceedings.

Friends Provident Life & Pensions Ltd v Sirius International Insurance [2005] EWCA Civ 601 (24 May 2005)

Tue, 24 May 2005 00:00:00 GMT

Consequences of Breach: The law of contract should not be extended as suggested in Alfred McAlpine plc v BAI (Run-Off) Ltd [2000] 1 LLR 437 to allow a breach of a claims notification clause to reject that particular claim unless it was a condition precedent

Strover & Anor v Strover & Anor [2005] EWHC 860 (Ch) (10 May 2005)

Tue, 10 May 2005 00:00:00 GMT

Estoppel: The doctrine of proprietary estoppel would assist an individual who continued to pay premiums on a life insurance policy in the mistaken belief that the beneficiary would be his estate as opposed to third parties under a trust.

Konkola Copper Mines Plc v Coromin [2005] EWHC 898 (Comm) (10 May 2005)

Tue, 10 May 2005 00:00:00 GMT

Jurisdiction: The Court retained a discretion to stay proceedings notwithstanding a jurisdiction clause conferring jurisdiction on a non-contracting state and Council Regulation 44/2001 Art. 2 / Lugano Convention 1988 Art. 2.

American International Marine Agency of New York Inc & Anor v Dandridge [2005] EWHC 829 (Comm) (05 May 2005)

Thu, 05 May 2005 00:00:00 GMT

Incorporation of Terms: General words of incorporation of an insurance policy in a reinsurance contract did note of themselves incorporate a “follow the leader” clause in a binder. The issue would depend upon whether the parties intended the clause to be incorporated.

Rendall v Combined Insurance Company of America [2005] EWHC 678 (Comm) (21 April 2005)

Thu, 21 Apr 2005 00:00:00 GMT

Construction: Reinsurers sought to avoid liability for claims arising out of the 9/11 disaster for non disclosure and / or misrepresentation.

Blackburn Rovers Football & Athletic Club Plc v Avon Insurance Plc & Ors [2005] EWCA Civ 423 (20 April 2005)

Wed, 20 Apr 2005 00:00:00 GMT

Causation and Exclusion: A clause excluding liability for injuries caused by a degenerative condition was not unreasonable. The critical question was whether the injury suffered was caused by the degenerative pre-condition

Cable and Wireless Plc & Anor v Valentine & Ors [2005] EWHC 409 (Comm) (16 March 2005)

Wed, 16 Mar 2005 00:00:00 GMT

Vicarious Liability: An agreement by an employer to accept vicarious liability for such liability as a Court may find against its employee was not unenforceable for uncertainty where expressed to be subject to a caveat in respect of the quantification of the damages.

Fortisbank SA v Trenwick International Ltd. & Ors [2005] EWHC 399 (Comm) (14 March 2005)

Mon, 14 Mar 2005 00:00:00 GMT

Estoppel: Continued communications between an insurer and insured post expiry of a contractual limitation period did not preclude the insurer from relying on a limitation defence in subsequent proceedings.

Re: HIH Cas. (Enron Metals) v HIH Cas. & Gen (Ch D, Pumfrey J)

Thu, 10 Mar 2005 00:00:00 GMT

Arbitration: In exercising a discretion under Insolvency Act 1986 s. 130 (2) to grant leave to commence arbitration proceedings against a company in provisional liquidation, the Court should consider whether there was a real prospect of success of the underlying claim.

Dornoch Ltd. & Ors v Royal and Sun Alliance Insurance Plc [2005] EWCA Civ 238 (10 March 2005)

Thu, 10 Mar 2005 00:00:00 GMT

Construction: A claims control clause requiring notification to reinsurers within 72 hrs of “knowledge of any losses which may give rise to a claim” would not be construed so as to relate to knowledge of any “claim”. “Knowledge” was an unsuitable word as a trigger for conditions precedents as it was inevitable subjective.

AXA General Insurance Ltd. v Gottlieb & Anor [2005] EWCA Civ 112 (11 February 2005)

Fri, 11 Feb 2005 00:00:00 GMT

Fraud: At common law, the effect of a fraudulent claim was to forfeit the whole of the claim to which the fraud related. Any interim payment made in respect of the claim would be recoverable even if the same was in respect of a genuine loss.

Royal & Sun Alliance Insurance plc and Exel Logistique SA v MK Digital Fze (Cyprus) Ltd and Hi Tec Electronics and TRS Univers Lines (CA) 17/05/02

Fri, 17 May 2002 00:00:00 GMT

Jurisdiction. This case involved a consignment of 18,000 Nokia mobile phones, which were stolen in France on their way to England. A French company was in charge of the carriage and the company who owned the mobile phones was Danish. The main issue related to the nature of the contracts over the consignment of the mobile phones and whether it was 'the Geneva Convention on the Contract for the International Carriage of Goods by Road' that ultimately governed these contracts. There was another issue raised in relation to the question of jurisdiction, given that two claims commenced in order to decide on liability for the theft of the mobile phones in England and France. The Court of Appeal decided that the English court did not have jurisdiction over the proceedings that had started in France.