Allocation of subrogation recoveries

(Stace & Francis Ltd v Ashby [2001] EWCA Civ 1655, November 2001)

The Court of Appeal in Stace & Francis Ltd v Ashby [2001] EWCA Civ 1655, to be reported in [2002] Lloyd’s Rep IR, encountered what on its face appeared to be a complex point of principle. The question was whether a builder who was employed by an insurer to make good insured losses suffered by the assured, and who failed to do so adequately, was entitled to seek a deduction of the insurance moneys from damages sought by the assured on the basis that the insurers themselves had undertaken to effect repairs. The Court of Appeal ultimately ruled that the insurers’ rights of subrogation were paramount.