Subrogation

Subrogated claims and limitation periods

Where an insurer has indemnified its assured against a loss, the insurer steps into the shoes of the assured and is entitled to sue any third party responsible for the loss. It has long been established that the claim by the insurer is to be brought in the name of the assured rather than in its own name, and for all intents and purposes the action is simply one by the assured to recover his loss, on the principle that insurance payments obtained by the assured are not to be taken into account in calculating the loss caused by the third party. For that reason, the decision of the Court of Appeal in Graham v Entec Europe [2003] EWCA Civ 1177, forthcoming in [2004] Lloyd’s Rep IR, is somewhat surprising, as it holds that in determining whether the limitation period for an action has been triggered, the knowledge of the insurer rather than the assured is to be taken into account.