Subrogation

The allocation of liability for the costs of hiring replacement vehicles while the assured’s own vehicle is being repaired has given rise to a massive amount of complex and expensive litigation utterly disproportionate to the amounts involved. In Bee v Jenson (No 2) [2007] Lloyd’s Rep IR Plus 17 the amount at stake was just over £610. The dispute between the parties and their insurers nevertheless generated two High Court decisions. The first, Bee v Jenson (No 1) [2006] EWHC 2534 (Comm), is discussed in Insurance Law Monthly (Volume 6: January (pp 8–9)). The sequel raised an important question on the law of subrogation: is an insurer entitled to recover from the third party the amount that he has paid to the assured even though the insurer has recovered a part of that loss from a separate source?