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Index

Double Insurance and Contribution

Page 225 Index Index absolute escape clauses see exclusion clauses Albion Insurance Co Ltd v Government Insurance Office of New South Wales 142 , 143 America: double recovery, prohibition on 13n32 ; “other insurance” clause 104 – 107 ; stacking cases 13n32 apportionment method for contribution 148 asbestos litigation: apportionment 182 , 183 ; approach of the courts to resolve problems 198 – 203 ; Barker v Corus revisiting Fairchild 180 – 183 , 204 ; Bolton Metropolitan BC v Municipal Mutual Insurance Ltd 178 – 180 , 199 ; Cape Distribution v Cape Intermediate Holdings plc 197 , 198 ; case law development 169 , 170 ; causation principle 173 , 186 , 187 , 199 ; contribution, doctrine of 180 ; damages, apportionment of 183 ; development of mesothelioma 169 ; damages 183 ; double insurance, application 191 , 198 – 203 , 205 , 206 ; Durham v BAI (Run Off) Ltd 183 – 193 , 199 , 203 ; Employers Liability (Compulsory Insurance) Act 1969, point of and implications of 200 – 202 ; employers’ liability insurance 184 , 186 , 194 ; Fairchild v Glenhaven Funeral Services Ltd decision 170 – 178 , 199 , 203 , 204 ; history and medical aspect of mesothelioma 170 , 171 ; Investors Compensation Scheme Ltd v West Bromwich Building Society 200 ; liability for risk or injury 183 ; Phillips v Syndicate 992 Gunner 203 – 205 ; law of tort 202 ; proportionate division of liability 203 – 205 ; “sustained” and “contracted” 186 – 189 ; tort liability 193 , 194 , 202 ; type of liability insurance 202 , 203 ; Workmen’s Compensation Acts 185 , 190 ; Zurich Insurance plc UK Branch v International Energy Group Ltd 193 – 197 assured: distinction between “an assured” and “the assured” 56 , 57 Austin v Zurich General Accident and Liability Insurance Co Ltd 43 , 44 , 218 Australia: adoption and application of Marine Insurance Act 1906 13 ; “an assured” and “the assured”, distinction between 56 , 57 ; approach to double insurance 6 , 7 ; case law 11 , 11n13 , 12 ; combination of clauses 53 , 54 ; comparison of insurance market with that of the UK 32 ; contractual and legislative exclusions 20 , 21 ; contribution, right of recovery 163 ; control of policy terms, legislative provisions 111 , 112 ; cover note 54 ; “entered into”, meaning 57 – 63 ; exclusion clauses, legislation barring 51 ; Explanatory Memorandum (Insurance Contracts Bill 1984 see Explanatory Memorandum (Insurance Contracts Bill 1984; fairness, test of 112 – 114 ; Financial Ombudsman Service 111 ; General Code of Insurance Practice 111 ; Insurance Contracts Act 1984 (Australia) s45 see Insurance Contracts Act 1984 (Australia) s45 “other insurance” provisions; Marine Insurance Act 1909 11 ; meaning of “the assured” 56 , 57 ; other legislative provisions 111 , 112 ; severance 55 , 56 ; specified terms in contracts 88 – 99 ; unfair terms 112 – 114 Page 226 Australian Corporations Act 2001 Australian Eagle Insurance Co Ltd v Mutual Acceptance (Insurance) Pty Ltd 147 , 148 Australian Insurance Law 143 Australian Law Reform Commission, Report on Insurance Contracts, Report No 20 (1982): calculating contribution 157 , 158 ; combination of clauses 53 , 54 ; consideration of English law 6 , 7 ; cover note 54 ; draft legislation 53 ; existing problems 53 ; fairness, test of 112 – 114 ; guiding principles 52 ; “other insurance” provisions 53 – 56 ; recommendations 52 , 75 , 76 ; severance of void parts in clauses 86 – 88 ; specifying terms in contracts 88 – 99 ; terms of reference 51 ; true excess liability in a policy 76 – 85 Australian Prudential Regulatory Authority 111 Australian Securities and Investment Commission Act 2001 111 balancing the interest between parties 128 , 129 , 221 Bankers & Traders Insurance Co Ltd v National Insurance Co Ltd 33 – 35 Barker v Corus revisiting Fairchild 180 – 183 , 204 Battle of Lagos 4 Bolton Metropolitan BC v Municipal Mutual Insurance Ltd 178 – 180 Bovis Construction Ltd v Commercial Union Assurance Co plc 213 , 214 Bovis Lend Lease Ltd v Saillard Fuller and Partners 213 Bubble Act 1720 4 , 12 , 110 , 111 calculation methods for contribution: common liability test 6 , 154 , 222 ; criticisms and possible solutions 157 , 158 ; independent actual liability 6 , 151 – 154 , 222 ; maximum potential policy 6 , 148 – 151 , 222 Caledonian North Sea v London Bridge Engineering 129 , 219 , 220 Canada: adoption of Marine Insurance Act 1906 13 ; notification requirement 70 – 72 ; position on double insurance 107 – 110 Cape Distribution v Cape Intermediate Holdings plc 197 , 198 case law (asbestos litigation): Barker v Corus revisiting Fairchild 180 – 183 ; Bolton Metropolitan BC v Municipal Mutual Insurance Ltd 178 – 180 ; Cape Distribution v Cape Intermediate Holdings plc 197 , 198 ; case law development 169 , 170 ; development of mesothelioma 169 ; Durham v BAI (Run Off) Ltd 183 – 193 ; Fairchild v Glenhaven Funeral Services Ltd decision 170 – 178 ; Zurich Insurance plc UK Branch v International Energy Group Ltd 193 – 197 case law (Civil Liability (Contribution) Act 1978) 212 – 217 case law (contribution): Australia 142 – 145 ; calculation of insurer’s liability 148 – 153 ; co-insurers 126 ; common law contribution 117 , 118 ; co-sureties 121 – 123 ; covering the same risk 134 – 141 ; entitlement to 147 ; equitable contribution 119 , 120 , 147 ; guarantor’s right 123 – 126 ; independent actual liability 151 – 154 ; maximum potential policy 148 – 151 ; principle behind 129 ; same assured, same subject matter and same interest 131 – 134 ; wide range of events covered by policy 154 , 155 case law (double insurance): absolute escape clauses 33 – 36 ; combination of clauses 46 – 50 ; excess clauses 43 , 44 ; escape clause against excess clause 42 , 43 ; identifying whether double insurance arises 14 – 18 ; illustrating complexities of double insurance 30 – 32 ; interpreting clauses 20 – 22 ; marine insurance 13 – 16 ; rateable proportion clauses 45 ; recovery from insurers 18 – 20 ; return of premiums 25 – 27 ; self-cancelling clauses held ineffective 36 – 39 ; Weddell principle in other jurisdictions 39 – 41 case law (double insurance America), “other insurance” clause 104 – 107 case law (double insurance Australia): analysis of cases 102 – 104 ; “an assured” and “the assured”, distinction between 56 , 57 ; conclusion on facts of the case 62 , 63 ; “entered into”, meaning 57 – 63 ; marine insurance 11 , 11n13 , 12 ; notification clause, validity of s45(1) 68 – 72 ; “other insurance” 59 – 62 ; specifically, meaning under s45(2) 65 – 68 ; specifying terms in contract 88 – 99 ; tests adopted by the courts 102 ; true excess clause 77 – 86 , 102 Page 227 case law (double insurance Canada) 107 – 110 case law (subrogation and indemnity 217 – 220 categories of insurance 5n17 causation principle, mesothelioma cases 173 , 186 , 187 , 199 Chamber of Assurance, establishment 4 , 9 Civil Liability (Contribution) Act 1978: application to double insurance 6 , 212 – 217 ; apportionment 216 ; claims between indemnity insurers 213 – 217 ; implementation 211 , 212 ; joint liability 208 , 209 ; liability in tort 216 claims: choice of policy 22 ; limitation period 130 clauses: combination in policies 30 ; escape clauses see exclusion clauses, excess clauses see excess clauses; exclusion clauses see exclusion clauses; in combination 46 – 50 ; interpretation of policy wording 20 – 22 ; limiting or excluding liability 20 – 22 ; “other insurance” 29 , 30 ; policy considerations 32 ; rateable proportion clauses see rateable proportion clauses; restriction of assureds’ rights 29 ; self-cancelling clauses held ineffective 36 – 39 ; suggested solutions 110 – 114 ; types of 6 , 29 , 32 , 33 , 221 ; uncertainty of 33 co-insurer’s right to contributions 126 combination of clauses 46 – 50 ; 53 , 54 common law principle: Australia, right of recovery 95 ; contribution and 6 , 117 , 118 , 129 , 130 , 207 – 220 ; co-sureties 121 , 126 ; distinction between equity and 209 , 210 ; exclusion/limitation clauses 29 ; indemnity up to extent of loss 75 ; premiums 27 common liability test 6 , 154 , 222 Compensation Act 2006 185 , 186 compensation, entitlement of mesothelioma victims 199 , 183 , 185 , 186 , 190 , 199 concept of double insurance 5 , 13 , 14 consideration 3 contract of insurance, definition 3 contribution: apportionment, policy providing method of 148 ; balancing interest of insurer and the assured 128 , 129 ; calculation of insurer’s liability 6 , 148 – 154 ; case law see case law (contribution); Civil Liability (Contribution) Act 1978 see Civil Liability (Contribution) Act 1978; common law 6 , 117 , 118 , 129 , 130 , 207 – 220 ; co-sureties 120 – 123 , 207 , 210 ; doctrine modified by contract 180 ; double recovery, possibility of 209 ; elements of double insurance 126 – 128 ; entitlement to 147 , 148 ; equitable principle 23 , 147 , 209 , 210 ; event after loss and insurer denying liability 163 ; factors to be satisfied 127 , 128 ; general concept 22 – 24 ; history 117 – 126 ; joint liability 207 – 209 ; limitation period for claims 130 ; marine insurance 156 ; origins of 23 ; overlaps allowing for contribution 164 – 167 ; property insurance 155 , 156 ; reimbursement or 209 ; requirements to be satisfied 24 ; restitution in nature 109 ; right of contribution arising see right of contribution arising; same damage not same tort 208 ; subrogation and indemnity 217 – 220 ; tortfeasors, joint and several 207 – 209 , 211 ; unjust enrichment 207 , 209 ; voluntary payment 159 – 163 ; wide range of events covered by policy 154 , 155 Co-operative Retail Services Ltd v Taylor Young Partnership Ltd 215 co-sureties, contribution and 120 – 123 , 207 , 210 cover note 54 Deering v Earl of Winchelsea 119 , 120 , 121 definition of double insurance 5 , 9n3 double insurance: America 104 – 107 ; apportionment of loss 24 ; asbestos litigation 191 , 198 – 203 , 205 , 206 ; Australia see Australia; Canada 107 – 110 ; case law see case law (double insurance); complexities of 30 – 32 ; concept of 5 , 13 , 14 ; definition 5 , 9n3 ; effect on claims 29 – 50 ; excess clauses see excess clauses; exclusion clauses see exclusion clauses; history of 9 – 11 ; identifying, case law 14 – 18 ; legislative reform, Australia see Australia; overview 3 – 7 ; premiums 25 – 27 ; rateable proportion clauses see rateable proportion clauses; recovery from insurers 18 – 20 ; requirements for 5 , 221 ; unclear legislation 6 double recovery, possibility of 209 Page 228 Drake Insurance Co v Provident Insurance Co 161 – 163 Durham v BAI (Run Off) Ltd 183 – 193 Eagle Star Ltd v Provincial Insurance plc 161 employers, asbestos litigation see asbestos litigation Employers’ Liability Act 1880 185 Employers Liability (Compulsory Insurance) Act 1969, point of and implications of 200 – 202 employers’ liability insurance, asbestos litigation 184 , 186 , 194 “entered into”: beneficial third parties 61 , 62 ; meaning 57 – 63 ; question of construction 94 – 96 Equitable Fire & Accident Office 30 – 32 equitable principle, contribution and 6 , 119 , 120 , 129 , 147 , 149 , 158 , 209 , 210 escape clauses see exclusion clauses excess clauses: America 104 – 107 ; Australia see Australia; combination of clauses 46 – 50 ; concurrent 43 , 44 ; escape clause against 41 – 43 ; inclusion of 6 , 29 , 32 ; self-cancelling 43 ; true excess clause 77 – 85 ; Weddell principle 37 – 39 excess coverage 64 , 65 , 167 exclusion clauses: absolute escape clauses 33 – 35 ; all policies containing absolute clauses 35 , 36 ; America 104 – 107 ; Australia see Australia; combination of clauses 46 – 50 ; concurrent 33 – 39 ; excess clause, against 41 – 43 ; inclusion of 6 , 29 , 32 ; self-cancelling clauses held ineffective 36 – 39 ; uncertainty of such clauses 33 ; Weddell principle 36 – 39 ex gratia payments 148 Explanatory Memorandum (Insurance Contracts Bill 1984): categories of clauses 87 ; effect of type of policy provision 87 ; mechanisms used for protection by insurers 88 ; severance of void clause 87 , 88 ; situations where double insurance could arise 86 , 87 ; types of policy provisions 86 , 87 Fairchild v Glenhaven Funeral Services Ltd decision 170 – 178 , 199 , 203 , 204 Financial Services and Markets Act 2000 111 fire insurance, history 4 Fire Life Insurance Duty Act 1782 4 “floater” policy 59n35 fraud, risk of 3 , 9 , 20 , 52 fraudulent trading 4 Gale v Motor Union Insurance Co 35 , 36 Godin v London Assurance Co 16 , 138 , 147 Great Fire of London 4 guarantor’s right to contribution 123 – 126 HIH Casualty and General Insurance Co v Pluim Construction Pty Ltd 65 – 67 , 89 – 91 , 93 history of contribution: common law contribution 117 , 118 ; co-insurers 126 ; co-sureties 120 – 123 ; equitable contribution 119 , 120 ; guarantor’s right 123 – 126 history of double insurance: Bubble Act 1720 12 ; Chamber of Assurance 9 ; Marine Insurance Act 1906 9 – 11 Home Insurance Co of New York v Gavel 70 , 71 Hong Kong: adoption of Marine Insurance Act 1906 13 identifying double insurance, case law 14 – 18 indemnity, requirement 13 , 18 independent actual liability test 6 , 151 – 154 , 222 insolvent insurers 5 , 45 Insurance Conduct of Business Sourcebook the Insurance Ombudsman Bureau 111 Insurance Contracts Act 1984 (Australia) s45 “other insurance” provisions: application 54 ; effects of s 76 74 , 75 ; “entered into” 59 – 63 , 94 – 96 ; exceptions under 63 – 65 ; excess clause, impact on 75 , 76 ; excess layers of cover 64 , 65 ; exclusion clause, impact on 75 , 76 ; Explanatory Memorandum see Explanatory Memorandum (Insurance Contracts Bill 1984); implementation 6 , 7 ; not being a contract of insurance required to be effected by or under law (exception 1) 63 , 64 ; notification clause, validity of s45(1) 68 – 73 ; proposed legislative provision 73 , 74 ; provision, meaning of 97 , 98 ; public liability insurance 63 , 64 ; rateable Page 229 proportion clauses, impact on 75 , 76 ; rationale for 53 ; recovery of loss suffered under contract 95 ; review of the Act 100 , 101 ; severance 55 , 56 ; some or all of loss not covered by a contract of insurance that is specified in first-mentioned contract (exception 2) 64 , 65 ; “specifically”, meaning under s45(2) 65 – 68 ; specifying terms in contracts 88 – 99 ; text of s 45 53 ; time “other insurance” entered into 54 , 55 Insurance Contracts Bill 1982 Clause 77 158 Insurance Contracts Bill 1984 Explanatory Memorandum see Explanatory Memorandum (Insurance Contracts Bill 1984) insurance industry: development and regulation of 4 insurance premiums see premiums Investors Compensation Scheme Ltd v West Bromwich Building Society 200 joint liability: Civil Liability (Contribution) Act 1978 211 – 217 ; contribution and 207 – 209 landlords and tenants, overlapping insurance 165 , 166 Law Commission recommended reforms 1980 111 Law Council of Australia, clarification of Insurance Contracts Act 1984 101 Law of Contribution and Reimbursement 118 Law of Restitution 120 Law Reform Committee’s Report 1957 111 Law Reform (Married Woman and Tortfeasors) Act 1935 211 Legal & General v Drake Insurance 159 – 162 Limitation Act 1980 130 limitation of liability see exclusion clauses limitation period for contribution claims 130 Lloyd’s Coffee House 12 Lloyd’s underwriters 5 , 12 London Assurance 4 , 12 marine insurance: history 4 ; registration 4 ; right to contribution 156 ; source of 12 Marine Insurance Act 1906: definition of double insurance 9n3 ; other jurisdictions 11 , 13 ; overview 9 – 11 ; situations covered 10 ; valued policy 10 ; United Kingdom 10 ; unvalued policy 10 Marshall on Insurance 26 Mathie v The Argonaut Marine Insurance Co Ltd 14 , 15 maximum potential liability test 6 , 148 – 151 , 222 Merchant Insurers Bill 1693 4 Merryweather v Nixon 212 mesothelioma see asbestos litigation Morris v Ford Motors Co Ltd 217 mortgagor and mortgagee, overlapping insurance 164 , 165 mutual societies 5 National Employers Mutual General Insurance Association Ltd v Haydon 37 – 39 ; 77 – 79 National Farmers Union Mutual Insurance Society Ltd v HSBC Insurance (UK) Ltd 46 – 50 New Zealand: adoption of Marine Insurance Act 1906 13 ; escape clause against excess clause, self-cancelling 42 , 43 ; Marine Insurance Act 1908 Nicholas v Wesfarmers Currangh Pty Ltd 59 – 62 1986 Statement of Practice, Insurance Conduct of Business Rulebook 111 North British and Mercantile Insurance Co v London, Liverpool and Global Insurance Co 131 , 132 , 164 North British Insurance v London, Liverpool & Globe Insurance 14 notification requirements: Australian case law 68 – 72 ; Canadian position 72 ; correct approach 72 , 73 ; effect of s76 Insurance Contracts Act 1984 74 , 75 ; notification clause, validity of s45(1) of Insurance Contracts Act 1984 68 ; suggested legislative provision 73 , 74 “open cover policy” 59n35 “other insurance” clauses: America 104 – 107 ; Australia see Insurance Contracts Act 1984 (Australia) s45 “other insurance” provisions; Canada 108 ; effect of 29 , 30 overlapping insurance, allowing for contribution 164 – 167 parent and subsidiary companies, “top and drop” policies 68 , 103 Phillips v Syndicate 992 Gunner 203 – 205 Page 230 policy considerations 32 premiums: outline 3 ; return of 25 – 27 primary policies 167 property insurance: history 4 ; right to contribution 155 , 156 public liability insurance 63 , 64 rateable proportion clauses: combination of clauses 46 – 50 ; contribution, both policies containing rateable proportion clause 161 , 162 ; effect of 44 , 45 ; inclusion of 6 , 29 , 32 , 33 ; policies not concurrent 45 Rathbone Brothers plc v Novae Corporate Underwriting Ltd 17 , 18 recovery from insurers: assureds’ rights 18 – 20 ; 147 regulation of the insurance industry in the UK 4 , 5 , 110 , 111 reimbursement 39 , 40 , 117 , 118 , 207 , 209 return of premiums: insurer refusing to pay 25 ; legislative framework 25 , 26 ; principle in Tyrie 25 , 26 ; prior to legislation 26 , 27 ; risk attached 27 review of Insurance Contracts Act 1984 100 , 101 right of contribution arising (Australian position): case law 142 – 145 ; requirement for policies to be in force and valid 144 , 145 right of contribution arising (UK position): case law 131 – 141 ; covering the same risk, essential requirement 134 – 141 ; factors required 131 ; same assured, same subject matter and same interest covered 131 – 134 rights of assured persons: recovery from insurers 18 – 20 ; restriction by insurers 29 rights of parties regarding clauses 110 risk, covering 18 ; 134 – 141 Royal Brompton Hospital NHS Trust v Hammond 212 , 213 , 216 Royal Exchange Assurance 4 , 12 self-insurance, asbestos litigation 196 , 197 severance of underlying clause 55 , 56 , 98 , 99 Sickness & Accident Assurance Association Ltd v The General Accident Assurance Corporation 144 , 145 Singapore: adoption of Marine Insurance Act 1906 13 ; contribution, right of recovery 162 , 163 ; interpreting clauses 21 , 22 ; Weddell principle 39 – 41 South Sea Company 4 specifically, meaning under s45(2) 65 – 68 specifying terms in contracts: actual effect of provision 91 – 93 ; definition of specified 89 – 91 ; legislative effect of s45 Insurance contracts Act 1984 88 – 99 ; meaning of provision 97 , 98 ; parties specifying terms 88 , 89 ; potential effect of provision 92 , 93 ; range of ways 88 , 89 ; severance of underlying clause 98 , 99 speculative trading 4 stacking, definition of 13 Steadfast Insurance Co Ltd v F&B Trading Co Pty 68 – 70 subrogation and indemnity 217 – 220 sureties: common law contribution 117 , 118 ; co-sureties 120 – 123 , 210 ; equitable contribution 119 , 120 Sutton on Insurance Law 62n53 , 68n82 “top and drop” policies 68 , 103 tort, principles of 6 tortfeasors, joint and several 207 – 209 , 211 – 217 Trade Practices Amendment (Australian Consumer Law) Act 2010 112 , 114 true excess liability: exemptions, true excess clause 77 – 85 , 102 ; limits on recommendations 76 , 77 types of clauses 6 , 29 , 32 , 33 umbrella policies 167 Unfair Contract Terms Act 1977 111 Unfair Terms in Consumer Contracts Regulations 1999 111 unfair terms, test of 112 – 114 unjust enrichment 120 , 207 , 209 Union Marine Insurance Co Ltd v Martin 15 , 16 , 17 unvalued policy 10 , 11 validity of policy 18 valued policy 10 , 11 vendors and purchasers, overlapping insurance 166 Vero Insurance Ltd v QBE Insurance (Australia) Ltd 58 , 59 Page 231 void clauses: severance 86 – 88 voluntary payment by insurer 159 – 163 Weddell v Road Traffic and General Insurance Co Ltd 36 – 41 Workmen’s Compensation Act 185 , 190 Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd 57 – 59 , 67 , 79 – 85 , 88 – 99 Zurich Insurance plc UK Branch v International Energy Group Ltd 193 – 197

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