KOSMAR VILLA HOLIDAYS PLC V TRUSTEES OF SYNDICATE 1243

[2008] EWCA Civ 147, Court of Appeal, Lord Justice Rix, Lord Justice Jacob and Mr Justice Forbes, 29 February 2008

Insurance (liability) – Condition precedent requiring notification of accidents – Late notification – Whether doctrine of waiver by affirmation available to assured – Whether insurers stopped from denying liability

The assured tour operator took out a liability policy which required, as a condition precedent, the assured to notify all accidents in respect of which “there may be liability”. A customer was seriously injured in on 22 August 2002 by diving into the shallow end of a swimming pool at apartments in Corfu. A claim was made against the assured on 4 September 2003, and this was notified immediately to the insurers. The insurers by their response did not reject the assured’s claim or reserve rights but indicated that there should be a joint approach to the treatment of the claim against the assured. On 30 September 2003 the insurers chose to rely upon breach of the condition precedent. The victim obtained judgment on liability against the assured in 2006, with damages to be assessed, calculated at approximately £1 million, taking into account 50% contributory negligence by the victim. Subsequently the Court of Appeal reversed that decision, so by the time the present dispute reached the Court of Appeal the only live issue was the liability of the insurers for the assured’s defence costs.