Insurance Law Monthly

The Court of Appeal has, in Seele Austria GmbH & Co KG v Tokio Marine Europe Insurance Ltd [2008] EWCA Civ 441, reversed the decision of the trial judge, Mr Justice Field, reported in the November 2007 issue of Insurance Law Monthly, and has decided that the wording of a property insurance policy – although scarcely a model of clarity – covered the costs incurred by the assured contractor in ripping out and replacing defective products installed in the main works.

Lexington Insurance Co v Multinacional de Seguros SA [2008] EWHC 1170 (Comm), a judgment on preliminary issues, is the first case to consider the implications of the ruling of the Court of Appeal in Kosmar Villa Holidays plc v Trustees of Syndicate 1243 [2008] EWCA Civ 147. The Court of Appeal there decided that the right of underwriters to rely upon the breach of a claims condition may be lost only by waiver by estoppel and not waiver by election. In Lexington, Mr Justice Christopher Clarke decided that an initial denial of liability by reinsurers did not excuse subsequent non-compliance with the claims condition by reason of waiver or otherwise.

Malik v Moneywise Investments plc 1 May 2008, a decision of John Leighton Williams QC, sitting as a Deputy High Court Judge, was a straightforward factual dispute as to whether material facts had been passed from the assured to his brokers.

The long and detailed decision of Mr Justice David Steel in Scottish Coal Company Ltd v Royal and Sun Alliance Insurance plc [2008] EWHC 880 (Comm) was concerned with a decision by the assured to change its method of working, giving rise to a loss. The insurers unsuccessfully argued that they were entitled to avoid the policy by reason of the assured’s failure to disclose the change, or to deny liability by reference to various policy terms including reasonable care, inspection and material change of risk provisions.