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Control of claims made against wrongdoer
Horwood v Land of Leather Ltd [2010] EWHC 546 (Comm) considers the question whether a prohibition of settlements clause applied not just to claims made against an insured but also claims made by the insured. Teare J has concluded that it does have that effect. The case is discussed by Brendan McGurk of 4 New Square.
Online Published Date:
02 December 2010
Appeared in issue:
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The trigger of cover
Keenly awaited for almost a year, the Court of Appeal handed down its mammoth judgment in the asbestos ‘Trigger Litigation’, Durham v BAI (Run Off) Ltd [2010] EWCA Civ 1096, on 8 October 2010. The court decided, two to one, that in mesothelioma cases, ‘injury sustained’ policy wording did not cover liability incurred by an employer at the point of exposure, but instead focused on the point in time at which the unfortunate victim’s tumour develops. The ruling, if it stands, will mean that many mesothelioma victims will not receive compensation for this deadly condition. The decision is discussed by Neil Hext of 4 New Square.
Online Published Date:
02 December 2010
Appeared in issue:
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Ascertaining liability and exclusion clauses
The decision of Christopher Clarke J in Omega Proteins Ltd v Aspen Insurance UK Ltd [2010] EWHC 2280 (Comm) is notable for two reasons. First, it concerns the extent to which judgments, awards and settlements which impact upon the insured’s liability to a third party are binding as between insured and liability insurer. The judge declined to follow the decision of Tomlinson J in London Borough of Redbridge v Municipal Mutual Insurance Ltd [2001] Lloyd’s Rep IR 545 and subjected it to serious criticism. Secondly, the judge considered the effect of a contractual liability exclusion clause of a kind commonly found in public liability and public liability policies. The case is discussed by Mark Cannon QC and Fiona Sinclair of 4 New Square.
Online Published Date:
02 December 2010
Appeared in issue:
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Forum non conveniens and applicable law
In Stonebridge Underwriting Ltd v Ontario Municipal Insurance Exchange [2010] EWHC 2279 (Comm) Christopher Clarke J discussed a jurisdictional conflict arising out of a reinsurance contract, between the English courts and the courts of Ontario. The court has upheld the now accepted approach that issues of law arising under a contract governed by English law (under English conflict of laws rules) should be determined in England.
Online Published Date:
02 December 2010
Appeared in issue:
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Remedies for breach
In Joseph Fielding Properties (Blackpool) Ltd v Aviva Insurance Ltd [2010] EWHC 2192 (QB) HHJ Wacksman QC, sitting as a Deputy Judge of the High Court, considered the circumstances in which a fraudulent claim, a failure to disclose a previous fraudulent claim and a failure to disclose previous breaches of the duty of utmost good faith entitled an insurer to avoid a policy.
Online Published Date:
02 December 2010
Appeared in issue:
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Concurrent causes
In Orient-Express Hotels Ltd v Assicurazioni General SA [2010] EWHC 1186 (Comm), Hamblen J considered two issues of construction regarding the scope of cover under a property damage and business interruption policy in the aftermath of Hurricane Katrina. In the course of his judgment the judge considered the limits of ‘but for’ causation, though ultimately this case did not fall outside those limits. The case is discussed by Nicholas Davidson QC and Shail Patel of 4 New Square.
Online Published Date:
03 December 2010
Appeared in issue:
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Voluntary payments
Where two insurers both potentially face liability for a claim, and one of them makes payment, the law of contribution permits that insurer to seek full or partial reimbursement from the other. However, there is some doubt as to whether the paying insurer has the right to seek contribution or reimbursement when it has paid sums beyond its own legal liability. In SHC Capital Ltd v NTUC Income Insurance Cooperative Ltd [2010] SGHC 224 it has been held in Singapore by Chan Seng Onn J – consistently with the most recent English authority – that voluntary payment does not preclude a restitutionary claim.
Online Published Date:
03 December 2010
Appeared in issue:
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The need for a formal policy
The English and Scottish Law Commissions have, at the end of October 2010, published their ninth Issues Paper, on the need to retain the formal requirement in s22 of the Marine Insurance Act 1906 for a policy document. This is a curious choice of subject matter for investigation, given that: (a) insurers have not for many years relied upon any possible defence open to them under s22; and (b) the Market Reform Contract now in general use in the London Market ensures that policy wording is available to the assured from the outset. The Issues Paper is nevertheless an interesting summary of the law.
Online Published Date:
03 December 2010
Appeared in issue:
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Arbitration time limits
A claimant relying on the Third Party (Rights Against Insurers) Act 1930 to enforce a judgment obtained against an insolvent insured can be in no better position against insurers than the insured would have been. In William McIlroy Swindon Ltd v Quinn Insurance Ltd [2010] EWHC 2448 (TCC) this principle, coupled with the court’s construction of a policy time bar upon arbitration, meant that the insured lost his rights against insurers before the third party claimants’ causes of action had even accrued. The case is analysed by Fiona Sinclair of 4 New Square.
Online Published Date:
03 December 2010
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Calculation of indemnity
Business interruption policies have been discussed on relatively few occasions by the courts, largely because most of the disputes relate to figures rather than to legal principles, but their application is capable of giving rise to important issues of construction. In New World Harbourview Hotel Co Ltd v Ace Insurance Ltd, April 2010, Hong Kong CFI, Reyes J considered the meaning of a business interruption policy in the context of loss of business by a company providing leisure facilities when revenue was lost as the result of an epidemic.
Online Published Date:
03 December 2010
Appeared in issue:
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Applicable law and jurisdiction
The issue in Glacier Reinsurance AG v Gard Marine and Energy Ltd [2010] EWCA Civ 1052 was whether a reinsured domiciled in Bermuda could bring an action in England against reinsurers domiciled in Switzerland. The Court of Appeal, upholding the first instance judgment of Hamblen J, held that the English court possessed jurisdiction and that the jurisdiction should be exercised. A number of the issues raised before Hamblen J did not feature in the appeal, but they are referred to in the following commentary for the sake of completeness. The only reasoned judgment in the Court of Appeal was given by Thomas LJ.
Online Published Date:
08 December 2010
Appeared in issue:
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The insurers' liability for costs
Section 51(3) of the Senior Courts Act 1981 permits the court to order a non-party to pay the costs of the proceedings where it is just and equitable for such an order to be made. Insurers defending claims have often found themselves on the wrong side of such an order, on the basis that the decision to defend was theirs and the defence was for their benefit. In The Kamal XXVI, The Kamal XXIV and The Ariela [2010] EWHC 2531 (Comm) the issue was whether a costs order could be made against underwriters who had themselves been defrauded by their assured into bringing a subrogation action. That in turn raised privilege questions. On the facts Burton J felt that it was appropriate to order disclosure.
Online Published Date:
08 December 2010
Appeared in issue:
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Utmost good faith and calculation of loss
The lengthy judgment of Flaux J in Synergy Health (UK) Ltd v CGU Insurance plc [2010] EWHC 2583 (Comm) was largely concerned with factual evidence. However, there are important points of principle made by the learned judge: in relation to misrepresentation, it was held that a statement made during the currency of the policy was to be treated as a representation for the purposes of renewal; in relation to non-disclosure, the court discussed the various forms of waiver of disclosure; in relation to both misrepresentation and non-disclosure, the court considered the issues of materiality and inducement; and, in relation to business interruption, the judgment discusses the measure of indemnity.
Online Published Date:
08 December 2010
Appeared in issue:
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Seaworthiness
In Garnat Trading & Shipping (Singapore) Pte Ltd v Baominh Insurance Corporation [2010] EWHC 2578 (Comm) a floating dock was seriously damaged in a tropical storm. The insurers under the policy covering the voyage alleged both that the assured had failed to disclose material facts relating to the fitness of the floating dock to make the voyage and that the floating dock was unseaworthy. Much of the decision is taken up with factual evidence, but some points of principle do emerge.
Online Published Date:
08 December 2010
Appeared in issue:
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The relationship between solicitors and insurers
In Greene Wood McLean LLP v Templeton Insurance Ltd (No 2) [2010] EWHC 2679 (Comm) Cooke J explored the relationship between after the event insurers and the solicitors appointed by the assured to bring the claim which is funded by the insurers. In outline, Cooke J held that: (a) ATE insurers are required to indemnify the solicitors if they are obliged to pay the assured’s costs when the ATE insurers have wrongfully refused to do so; and (b) the solicitors do not owe any duty of care to the insurers.
Online Published Date:
08 December 2010
Appeared in issue:
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Liability of the Motor Insurers' Bureau for accidents in Europe
The compulsory motor insurance regime within the European Union ensures that the victim of a road traffic accident anywhere in the EU can bring a claim against the negligent driver’s motor insurers in the courts of the member state in which the victim is domiciled. As an alternative, the victim is entitled under EU rules to bring an action against the Motor Insurers’ Bureau established in the member state of the victim’s domicile. That right is extended to the situation in which the driver is uninsured or unidentified. The question in Jacobs v Motor Insurers’ Bureau [2010] EWCA Civ 1208 was whether the damages awardable to the victim by the MIB in a case involving an uninsured driver were to be assessed by the law of the country of his domicile or by the law of the country in which the accident occurred.
Online Published Date:
08 December 2010
Appeared in issue:
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Non-disclosure and breach of warranty
Burton J in Sugar Hut Group Ltd v Great Lakes Reinsurance (UK) plc [2010] EWHC 2636 (Comm) discussed a series of defences raised by insurers under a property policy following damage to the insured subject matter by fire. Much of the ruling is factual, although there are interesting statements of principle relating to the construction of policy terms.
Online Published Date:
08 December 2010
Appeared in issue:
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Illegality and frustration
There is no modern authority on the effect of an external event such as a war on a contract of insurance made between an English insurer and a policyholder who has subsequently become an enemy alien, although there is a body of early marine authority relating to various events such as the Napoleonic wars. It is likely that such a contract is rendered illegal and that no future performance is possible. In Islamic Republic of Iran Shipping Lines v Steamship Mutual Underwriting Association (Bermuda) Ltd [2010] EWHC 2661 (Comm) the question was rather a narrower one, of whether Government regulations restricting dealing with particular bodies other than for limited purposes operated to render illegal, or to frustrate, a P&I Club insurance. The outcome turned on the proper construction of the regulations.
Online Published Date:
08 December 2010
Appeared in issue:
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Forum non conveniens and applicable law
In Stonebridge Underwriting Ltd v Ontario Municipal Insurance Exchange [2010] EWHC 2279 (Comm) Christopher Clarke J discussed a jurisdictional conflict arising out of a reinsurance contract, between the English courts and the courts of Ontario. The court has upheld the now accepted approach that issues of law arising under a contract governed by English law (under English conflict of laws rules) should be determined in England.
Online Published Date:
19 December 2010
Appeared in issue:
Vol 22 No 12 - 14 December 2010
Concurrent causes
In Orient-Express Hotels Ltd v Assicurazioni General SA [2010] EWHC 1186 (Comm), Hamblen J considered two issues of construction regarding the scope of cover under a property damage and business interruption policy in the aftermath of Hurricane Katrina. In his judgment the judge considered the limits of ‘but for’ causation, though ultimately this case did not fall outside those limits. The case is discussed by Nicholas Davidson QC and Shail Patel of 4 New Square.
Online Published Date:
19 December 2010
Appeared in issue:
Vol 22 No 12 - 14 December 2010
Voluntary payments
Where two insurers both potentially face liability for a claim, and one of them makes payment, the law of contribution permits that insurer to seek full or partial reimbursement from the other. However, there is some doubt as to whether the paying insurer has the right to seek contribution or reimbursement when it has paid sums beyond its own legal liability. In SHC Capital Ltd v NTUC Income Insurance Cooperative Ltd [2010] SGHC 224 it has been held in Singapore by Chan Seng Onn J – consistently with the most recent English authority – that voluntary payment does not preclude a restitutionary claim.
Online Published Date:
19 December 2010
Appeared in issue:
Vol 22 No 12 - 14 December 2010
The insurers’ liability for costs
Section 51(3) of the Senior Courts Act 1981 permits the court to order a non-party to pay the costs of the proceedings where it is just and equitable for such an order to be made. Insurers defending claims have often found themselves on the wrong side of such an order, on the basis that the decision to defend was theirs and the defence was for their benefit. In The Kamal XXVI, The Kamal XXIV and The Ariela [2010] EWHC 2531 (Comm) the issue was whether a costs order could be made against underwriters who had themselves been defrauded by their assured into bringing a subrogation action. That in turn raised privilege questions. On the facts Burton J felt that it was appropriate to order disclosure.
Online Published Date:
19 December 2010
Appeared in issue:
Vol 22 No 12 - 14 December 2010