Waiver of rights

Insurance policies often mitigate the draconian effects of non-disclosure, misrepresentation and breach of warranty by a variety of clauses which restrict the assured’s duty. In The Seashell of Lisson Grove Ltd v Aviva Insurance Ltd [2011] EWHC 1761 (Comm) Teare J was called upon to construe the effect of Non-Invalidation Clauses and also a clause which prevented reliance on breach of warranty which had no causal link to the loss.

The Seashell: the facts

The Seashell was a fish and chip restaurant and takeaway in Marylebone, London. The first claimant operated the restaurant, and the second and third claimants were trustees of a pension fund who were the freeholders of the building in which the restaurant was located. The claimants were insured under two policies, the ‘Restaurant Policy’ and the ‘Property Policy’. The restaurant was damaged by a fire. The insurers denied liability under both policies. They alleged breach of a ‘Frying Range Warranty’ in the Restaurant Policy and also non-disclosure and misrepresentation in respect of both policies. The present proceedings were concerned with two preliminary issues of interpretation under the Restaurant Policy and one under the Property Policy.