Insurance Law Monthly

Moore Stephens v Stone & Rolls Ltd [2009] UKHL 39 is a lengthy and complex decision by the House of Lords. By a 3:2 majority their Lordships ruled that the auditors of a company were not liable to the company to compensate it for losses caused by the fraud of the company’s sole shareholder/controller which the auditors have failed to uncover. This would seem to be a commonsense proposition, but the disagreement amongst their Lordships demonstrates that matters are not that simple. The case is of course of major significance for professional indemnity insurers, but there are wider implications for insurance in general. The following paragraphs are primarily concerned with those implications.

The facts of Seele Austria GmbH & Co KG v Tokio Marine Europe Insurance Ltd [2009] EWHC 2066 (TCC) are somewhat unusual, but the case reaffirms the principle that under a property policy the six-year limitation period for the assured’s claim runs from the date on which the insured peril occurred. In Seele this caused a problem where the claim had to be reformulated following earlier rulings of the English courts, and the question was whether the reformulated claim was time-barred.

In Re Equitas Ltd [2009] EWHC 1595 (Ch), Mr Justice Blackburne has approved a transfer of the residual liabilities of Lloyd’s names to Equitas Insurance Ltd, the effect being that names are to cease to be reinsured by Equitas and instead their liabilities are transferred in their entirety to EIL.

In the following paragraphs, Andrea Lista of the University of Southampton discusses the European Commission’s proposals for the approach to be taken in the renewal of the block exemption of insurance contracts from the competition rules in the EC Treaty.