Parties were not co-insured in respect of the same loss

In The Rugby Football Union v Clark Smith Partnership Ltd and FM Conway Ltd [2022] EWHC 956 (TCC), Eyre J held, on the trial of a preliminary issue, that the loss claimed to have been suffered by the claimant and its insurer was not irrecoverable because the insurer was unable to exercise subrogation rights or because, on a proper interpretation of the project policy, the claimant and/or the insurer were not entitled to claim the insured losses. The claimant and the defendant were held not to be co-insured in respect of the losses for which the claimant brought the claim. The basis for so concluding was held to lie in the interpretation of the contractual documents and so one should not seek to draw lessons of universal application from this case. But the case does demonstrate that if parties to a construction project wish to create a fund which is to be the sole remedy for loss or damage arising in the course of the performance of the construction project, they should use clear words to that effect. In the absence of such clear words, a court may be more likely to conclude that the right of action against the person responsible for the loss has not been removed by the taking out of insurance.