JOINT NAMES INSURANCE DID NOT EXCLUDE LIABILITY IN NEGLIGENCE

Tyco Fire and Integrated Solutions (UK) Ltd v Rolls Royce Motor Cars Ltd [2008] EWCA 286, 2 April 2008

In Tyco Fire and Integrated Solutions (UK) Ltd v Rolls Royce Motor Cars Ltd [2008] EWCA 286, 2 April 2008, the Court of Appeal allowed an appeal from the decision of His Honour Judge Gilliland (on which see our February 2008 issue, pp. 1–6) and held that, as a matter of construction of the contract between the parties, the claimant contractor was not relieved of any liability in negligence on the ground that the contract provided for joint names insurance under the defendant employer’s policy. In order to persuade a court that matters are to be settled between the parties on the basis of an insurance funded solution rather than on the basis of liability, it is necessary to use plain language to that effect. In other words, clear words must be used if liability in negligence is to be excluded. The Court of Appeal reached this conclusion as a matter of construction of the contract and, obiter, it cast doubt on the existence of a rule of law which would prevent one joint name insured from suing another joint name insured in respect of a risk covered by their co-insurance.