The Rights of Insurers - Contribution

(Bovis Construction Ltd and Eagle Star Insurance Co Ltd v Commercial Union Assurance Co plc 2000)

The rules of contribution between insurers are complex and far from logical. Their general purpose is to ensure that, where there are two or more concurrent policies which are each capable of responding to the assured’s loss, a claim by the assured against any one insurer allows that insurer to recover a rateable proportion of its payment from the other insurers. In that way the loss is spread proportionately rather than falling on any one insurer. Contribution is a creation of the courts of equity, although it is frequently modified by express contract term. The decision of Mr Justice David Steel in Bovis Construction Ltd and Eagle Star Insurance Co Ltd v Commercial Union Assurance Co plc , 29 November 2000, forthcoming in [2001] Lloyd’s Rep IR is in part an illustration, and in part a clarification, of the rules.