Aneco Reinsurance Underwriting Limited (In Liquidation) (a Body Incorporate Under the Laws of Bermuda) v Johnson and Higgins Limited: HL 18 Oct 2001

Brokers contracted to obtain re-insurance of risks undertaken by the claimants. They negligently failed to obtain full cover. The question at issue was whether they were liable for the full loss, or whether their duty was limited to obtaining satisfactory excess of loss protection.
Held: The appeal failed. The case of SAAMCo did not affect the existing rule. The brokers had a duty to inform the insured of any limitation on the cover obtained. They were liable for failing to advise the company of the unavailability of the re-insurance on the market, and were therefore reliable for the entire loss accepted. It was an ‘advice’ case. This had the ironic consequence that although the claimant had apparently been content to assume an exposure of $35m on the reinsurance with protection by way of retrocession for only $11m, they recovered the whole $35m as damages, two thirds of which they would have suffered even if the retrocession had been effective. The broker’s responsibility was found to extend beyond the placing of the retrocession to the entire transaction including the writing of the reinsurance itself. In particular, his duty was found to include reporting to the reinsurer the market’s highly adverse assessment of the reinsured risk.


Lord Slynn of Hadley Lord Browne-Wilkinson Lord Lloyd of Berwick Lord Steyn Lord Millett


[2001] UKHL 51, [2002] 1 Lloyd’s Rep 157, [2002] CLC 181, [2002] Lloyds Rep IR 91, [2002] 1 LLR 157, [2002] PNLR 8, 2001] 2 All ER (Comm) 929, [2002] Lloyd’s Rep IR 91


House of Lords, Bailii


England and Wales


CitedYouell v Bland Welch and Co Ltd (‘The Superhulls Cover-Case) (No 2) QBD 1990
In estoppel it is necessary for there to have been an unequivocal representation of fact by words or conduct: ‘A party can represent that he will not enforce a specific legal right by words or conduct. He can say so expressly – this of course he can . .
CitedSouth Australia Asset Management Corporation v York Montague Ltd etc HL 24-Jun-1996
Limits of Damages for Negligent Valuations
Damages for negligent valuations are limited to the foreseeable consequences of advice, and do not include losses arising from a general fall in values. Valuation is seldom an exact science, and within a band of figures valuers may differ without . .
See AlsoAneco Reinsurance Underwriting Ltd (In Liquidation) v Johnson and Higgins CA 14-Nov-1997
Claims against insurance brokers for negligence are to be heard at the same time as a claim with regard to repudiation of liability; need for notes of arrangements. . .
Appeal fromAneco Reinsurance Underwriting Limited (In Liquidation) v Johnson and Higgins Limited CA 30-Jul-1999
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Cited by:

CitedEquitable Life Assurance Society v Ernst and Young CA 25-Jul-2003
The claimant sought damages from its accountants, saying that had they been advised of the difficulties in their financial situation, they would have been able to avoid the loss of some 2.5 billion pounds, or to sell their assets at a time when . .
Limited to the particular factsBPE Solicitors and Another v Hughes-Holland (In Substitution for Gabriel) SC 22-Mar-2017
The court was asked what damages are recoverable in a case where (i) but for the negligence of a professional adviser his client would not have embarked on some course of action, but (ii) part or all of the loss which he suffered by doing so arose . .
Lists of cited by and citing cases may be incomplete.

Insurance, Professional Negligence, Damages

Updated: 21 July 2022; Ref: scu.166629