Insurance Law Monthly

In Direct Line Insurance plc v Fox [2009] EWHC 386 (QB) the assured entered into a settlement agreement with the insurers and then submitted false documents in order to obtain payment under it. HHJ Richard Seymour QC held that in those circumstances the assured did not lose the entire claim, because his fraud did not relate to the claim but only to payment under the entirely separate settlement contract.

Lewis v Norwich Union Healthcare Ltd [2009] EW Misc 2 (EWCC), a decision of Recorder West-Knights QC in the Central London County Court, is a further reminder to underwriters that the law relating to non-disclosure these days requires proof not just of objective materiality but also of actual inducement. If the insurers do not put up the underwriter responsible for writing the risk, they significantly imperil their chances of proving inducement. If the underwriter can be shown to have acted imprudently in any event, then those chances are even further reduced.

The January 2009 issue of Insurance Law Monthly discussed the first instance decision of Mr Justice Walker in Bedfordshire Police Authority v Constable [2008] EWHC 1375 (Comm). The learned judge there decided that statutory strict liability imposed on the police by the Riot Damages Act 1886 fell within the scope of a public liability policy. Subsequently, in Yarl’s Wood Immigration Ltd v Bedfordshire Police Authority [2008] EWHC 2207 (Comm), Mr Justice Beatson ruled that in the circumstances there was no liability under the 1886 Act so that there was nothing for the policy to respond to. The issue of liability was nevertheless appealed to the Court of Appeal, Bedfordshire Police Authority v Constable [2009] EWCA Civ 64, presumably because there were outstanding costs issues involved, because one or other party wished to have the position authoritatively resolved or because of the prospects of an appeal against the decision of Beatson J. As will be seen, the Court of Appeal upheld Walker J’s view that the policy responded to any claim against the Police Authority under the 1886 Act.

In Youell v La Reunion Aerienne [2009] EWCA Civ 175 the Court of Appeal has confirmed that jurisdiction over a dispute under a contract between insurers that contains an arbitration clause is to be resolved by reference to the nature of the dispute and not by reference to the arbitration clause. Thus if the English court has jurisdiction over the dispute by reason of the fact that the claim is for a sum payable in England, the existence of an arbitration clause does not remove the jurisdiction of the English court where there is no application for a stay of the English proceedings.

Two quite distinct but nevertheless important issues were discussed by Mr Justice Coulson in Porter v Zurich Insurance Co [2009] EWHC 376 (QB). The first was whether an assured could, by pleading mental illness, recover from his insurers despite his own deliberate destruction of the insured subject matter. The second was whether breach of a claims cooperation clause not expressed to be a condition precedent automatically gave rise to damages representing the amount of the assured’s claim.