Insurance Law Monthly

The decision of the Victoria Supreme Court in Leading Synthetics Pty Ltd v Adroit Insurance Group Pty Ltd [2011] VSC 467 deals with a number of points of interest both generally and in relation to credit policies. The general issues are whether a contract existed and whether it had been brought about by non-disclosure; the specific point was whether a policy came into effect where the customer whose account was protected was in debt at that stage.

A policy of insurance is renewed from year to year. In the first year broker A negligently includes an inappropriate term, which significantly reduces the protection given to the insured. That term is reproduced in later years without any further thought being given to it, either by broker A or by his successor, broker B, who has replaced broker A by the time of the placing of the policy which is in force when the problem comes to light. Is broker A, the original source of the problem, liable for the loss? This was the main question which Christopher Clarke J had to answer in Beazley Underwriting Ltd and Ors v The Travelers Companies Inc [2011] EWHC 1520 (Comm). The case is discussed by Mark Cannon of 4 New Square.

The question in Pine v DAS Legal Expenses Insurance Co Ltd [2011] EWHC 658 (QB) was whether the assured, under a legal expenses policy, was entitled to exercise her right to choose a lawyer by instructing a barrister directly rather than proceeding through solicitors. The outcome, in favour of the assured, turned upon the proper construction of the policy, and there was no need for the court to deal with difficult issues as to the meaning of the EU legislation and the UK implementing legislation on the freedom of a policyholder to choose her own lawyer.

In PT Buana Samudra Pratama v Maritime Mutual Insurance Association (NZ) Ltd (The ‘Buana Dua’) [2011] EWHC 2413 (Comm) the court had to consider whether it was open to a following market underwriter to advance defences alleging that the assured had been in breach of warranty or had used fraudulent devices after the claim had been settled by the lead underwriter. The decision is discussed by David Turner QC of 4 New Square.

The providers of package tours and holidays are required by English law, implementing an EU Directive, to provide security in the event of cancellation, which may be in the form of insurance. The decision of Teare J in All Leisure Holidays Ltd v Europaische Reiseversicherung AG and Ors [2011] EWHC 2629 (Comm) is the first reported case on a policy of this type, and raises wider issues of the meaning of loss and the scope of claims obligations.