Castellain v Preston: 1883

The court emphasised the amplitude of the insurer’s right of subrogation which gave him ‘the advantage of every right of the assured, whether such right consists in contract, fulfilled or unfulfilled, or in remedy for tort capable of being insisted on or already insisted on, or in any other right, whether by way of condition or otherwise, legal or equitable . . The second right vested in the insurer by the doctrine of subrogation is to claim from the assured any benefit conferred on the assured by third parties with the aim of compensating the assured for the loss in respect of which the insurer has indemnified him. The right is usually exercised by an insurer claiming from the assured a sum equivalent to any sum of damages paid to the assured by a third party legally liable for the loss. The right is wider in scope than that, however, and the insurer is entitled to moneys paid to the assured ex gratia to diminish his loss unless intended by the donor to benefit the assured to the exclusion of the insurers.’ The doctrine of subrogation is based on the fact that a contract of insurance is a contract of indemnity, and that the insurer is placed in the shoes of the insured in respect of claims whereby the insured loss is diminished

Judges:

Brett LJ

Citations:

(1883) 11 QBD 380

Jurisdiction:

England and Wales

Cited by:

CitedCaledonian North Sea Ltd v London Bridge Engineering Ltd and Others HL 7-Feb-2002
Substantial personal injury claims had been settled following the Piper Alpha disaster. Where a contractual indemnity had been provided under a contract, and insurance had also been taken out, but the insurance had not been a contractual . .
CitedBee v Jenson ComC 21-Dec-2006
The defendant objected to paying the plaintiff the costs of a replacement hire car after the accident for which he was liable. He said that the plaintiff was in any event insured to recover that cost, and the insurance company were subrogated to the . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 27 November 2022; Ref: scu.191161