Insurance Law Monthly

Liability policies restrict the scope of their coverage to losses arising out of particular activities carried on by the assured. In Lane v Dive Two Pty Ltd [2012] NSWSC 104 the main question for the Supreme Court of New South Wales was whether the injuries inflicted by the assured on a third party arose from an activity connected with the assured’s business. The case also raised the scope of an exclusion for criminal activity and the potential fallback liability of brokers for failing to obtain proper cover.

EU law, as implemented by regulation in the UK, requires legal expenses insurers to allow the assured a free choice of lawyer in order to eliminate the risk of a conflict of interest between the insurers and the assured, particularly where the assured’s claim is against a policyholder insured by the same insurers. The measures have been construed widely, and apply even if there is no conflict of interest. Brown-Quinn and Anr v Equity Syndicate Management Ltd [2011] EWHC 2661 (Comm) is the first case to discuss the issue of whether insurers who have their own panel solicitors can insist that the assured does not appoint solicitors who charge higher rates. Unsurprisingly Burton J ruled in favour the assured, subject to the restriction that the fees charged by the chosen solicitors were reasonable.

In some circumstances the common law principle ex turpi causa prevents an action in tort where the claimant has been injured in the course of committing an illegal act. Assuming, however, that the common law does not preclude an action, a further question arises as to whether the claimant is entitled to recover damages for his injuries under the compulsory motor insurance regime. The majority of the Court of Appeal in Delaney v Pickett and Anr [2011] EWCA Civ 1532 has sanctioned an exception to insurance recovery where the victim is a passenger.

The decision of HHJ Keyser QC in Quirkco Investments Ltd v Aspray Transport Ltd [2011] EWHC 3060 (Ch), although ultimately turning on the proper construction of a lease, raises a number of interesting general questions of insurance law, including payment of the premium, noting and subrogation waiver.