PACIFIC AND GENERAL NSURANCE CO LTD V HAZELL AND OTHERS SAME V HOME & OVERSEAS INSURANCE CO LTD AND OTHERS

(1997) 6 Re LR 157

Queen’s Bench Division (Commercial Court)

Mr Justice Moore-Bick

Broker - Authority - Winding up of reinsured - Refusal by provisional liquidator to pay excess of loss reinsurance premiums - Operation of London market settlement procedures automatically debiting brokers account in respect of premiums due under contracts - Reinsurers persuaded by broker to cancel contracts and reverse entry of premiums - Scope of brokers authority - Whether appointment of provisional liquidator automatically revoked authority of broker - Whether payments made by broker to reinsurers by way of settlement in account through London market systems were payments of premium made with authority of reinsured - Whether market rules rendered broker personally liable for premium, either in conjunction with, or in place of, reinsured - Whether, if payment was made purportedly on behalf of reinsured, it was open to broker and reinsurers to rescind it at any time before it was ratified by reinsured - Whether cancellation of reinsurance contracts justified where reinsured repudiated contracts by evincing intention not to pay premium - Whether reinsured could claim to recover premium either from