Rectification of policies

The complex negotiations leading to the placement of an insurance risk have ultimately to be embodied in a formal agreement between the parties, either in the form of a slip or a policy. On occasion it is the case that the final document does not reflect what the parties had intended. In such circumstances it is possible for one or other of the parties to apply to the court for the contract to be rectified so as to put the matter right. In Dunlop Heywards (DHL) Ltd v Erinaceous Insurance Services Ltd [2008] EWCA Civ 354 the question was whether the requirements for rectification had arguably been met. In holding that this was the case, the Court of Appeal – the leading judgment being given by Rix LJ – reversed the decision of Field J [2008] Lloyd’s Rep IR 676, discussed in the September 2008 issue of Insurance Law Monthly.

Dunlop Haywards: the background

The claimant, DHL, was a property consultant and a member of the Erinaceous Group, and the case concerned the renewal of the Group’s professional indemnity cover. The producing broker, HPC, appointed Forbes as the placing broker for the renewal. Somewhat unusually, the finance director of the Group had been involved in the appointment process and indeed the decision to appoint Forbes was that of the Group.