Brokers

Placing cover

A broker who is instructed by his client to place cover owes parallel contractual and tortious duties to the client to secure an appropriate policy and to disclose all material facts to underwriters so as to secure that the policy cannot be avoided for breach of the duty of utmost good faith. However, even if there is a breach of duty by brokers, there can only be an action against them if their breach was the actual cause of the underwriters’ refusal to pay. The causation point is illustrated by the decision of David Steel J in Kennecott Utah Copper Corporation v Minet [2002] EWHC 1622 (Comm), forthcoming in [2003] Lloyd’s Rep IR. This case also demonstrates that matters of fact found by a trial judge in his original decision on coverage cannot be reopened in subsequent proceedings against the brokers.