Professional indemnity insurance: mitigation and allocation

In Standard Life Assurance Ltd v ACE European Group and Ors [2012] EWHC 104 (Comm), Eder J has rejected insurers’ arguments that the action of Standard Life Assurance Ltd (SLAL) in putting money into an investment fund (the value of which had fallen sharply after the collapse of Lehman Brothers) so as to head off claims by investors was not recoverable under the "Mitigation Costs" clause of its professional indemnity insurance policy because the payment was also made to avoid damage to the SLAL brand. The case is discussed by Jeremy Stuart-Smith QC and Clare Dixon of 4 New Square.

Standard Life Assurance Ltd : the facts