The meaning of ‘damages’

Although the insuring clauses of liability policies may vary in their wording, a typical clause will cover the assured against liability at law for damages in respect of various forms of loss, whether personal injury, property damage or pecuniary loss. The question in Bartoline Ltd v Royal & Sun Alliance Insurance plc [2006] Lloyd’s Rep IR Plus 18, a decision of HHJ Hegarty QC, was the meaning of the word ‘damages’. The case, which follows previous authorities on the point, holds that there is a distinction between common law damages awarded against the assured, and expenses and charges incurred following an order by a regulatory authority. The judgment was concerned purely with preliminary issues on the meaning of the assured’s public liability cover, and the facts were assumed for the purposes of the judgment; in the following account the assumed facts are stated.