Overpayment of Policy Benefits

Recovering Overpayments

(Derby v Scottish Equitable plc [2001] Lloyd’s Rep IR (forthcoming))

The decision of the Court of Appeal in Derby v Scottish Equitable plc [2001] Lloyd’s Rep IR (forthcoming) is potentially of great significance for insurers who have by paid their policy holder sums to which the policy holder is not entitled. The effect of the decision is to allow insurers to recover the overpayments almost irrespective of the consequences of their demand on the policy holder. In particular, the negligence of the insurers in making the payment in the first place is not a relevant consideration. The Court of Appeal upheld the reasoning of Harrison J at first instance, [2000] 3 All ER 793.