Insurance Law Monthly

In Denso Manufacturing UK Ltd v Great Lakes Reinsurance (UK) plc [2017] EWHC 391 (Comm) a series of questions arose in respect to the interpretation of an after the event policy. Some of those were confined to the context of ATE insurance. Others – in particular the nature and effect of cooperation provisions and premium obligations – are of much wider interest. Judgment was given by Sara Cockerill QC, sitting as a Deputy Judge of the High Court.

Aggregation clauses are more or less standard in liability policies. They have two functions. First, they determine how many deductibles the assured has to bear where a series of losses arise from similar or connected events: aggregation of losses into a single deemed loss requires the application of only one deductible.

The rapid development of technology allowing vehicles to be operated without any input from a driver has created complex legal issues. The technology has been tested in numerous jurisdictions and many of them have begun to consider how insurance law might be adopted to deal with the risk of accidents. It has been estimated by insurers that over 90 per cent of accidents are wholly or partly attributable to driver error.

Section 51 of the Senior Courts Act 1981 gives the court a discretion as to the award of costs, and also permits the court to make a costs order against a non-party. The usual scenario is that the assured has become insolvent and the insurers have defended the claim in their own interests. In XYZ v Travelers Insurance Co Ltd [2017] EWHC 287 (QB) the facts were somewhat different.

The Court of Appeal in Zurich Insurance Plc v Maccaferri Ltd [2016] EWCA Civ 1302 has upheld the decision of Knowles J in construing a notification clause in a liability policy as imposing an obligation based only on how matters looked objectively at the date on which the event occurred. The provision was not to be construed as imposing a continuing obligation on the assured to notify as soon as it became aware that a claim was likely.