ComC Lloyd’s Litigation – renewal and reconstruction – market settlement – case management of cases where there is dispute between names and Lloyd’s as to whether a binding contract was concluded

Judges:

Cresswell J

Citations:

[1998] Lloyd’s Rep IR 186, [1997] CLC 1411

Jurisdiction:

England and Wales

Insurance

Updated: 13 May 2022; Ref: scu.220781

The court asked whether an insurance taken for the benefit of third parties was invalidated by the criminal act of the insured. The upholding of the policy was justified in relation to unlawful killing by the manner of driving a motor vehicle on the ground that an overriding public policy requires the existence of valid insurance in such circumstances for the benefit of the family of the victim.

Citations:

[1933] 1 K B 822

Jurisdiction:

England and Wales

Cited by:

Cited – Dunbar (As Administrator of Tony Dunbar Deceased) v Plant CA 23-Jul-1997
The couple had decided on a suicide pact. They made repeated attempts, resulting in his death. Property had been held in joint names. The deceased’s father asked the court to apply the 1982 Act to disentitle Miss Plant.
Held: The appeal was . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 13 May 2022; Ref: scu.199537

the plaintiff had been convicted of manslaughter by reckless driving. The court was debarred by public policy from obtaining an indemnity under his insurance policy in respect of his civil liability.
Held: He was not: ‘If the law is not logical, public policy is even less logical, for, by common consent, these third party indemnity insurances have been treated as valid and effective’.

Judges:

Bailhache J

Citations:

[1921] 3 KB 327

Jurisdiction:

England and Wales

Cited by:

Cited – Dunbar (As Administrator of Tony Dunbar Deceased) v Plant CA 23-Jul-1997
The couple had decided on a suicide pact. They made repeated attempts, resulting in his death. Property had been held in joint names. The deceased’s father asked the court to apply the 1982 Act to disentitle Miss Plant.
Held: The appeal was . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 13 May 2022; Ref: scu.199536

A carrier, knowing of the high risk of theft from the area, left a trailer unattended in a car park in east London. His behaviour was held to be wilful misconduct allowing the insurance policy to be ineffective.

Citations:

[1991] 1 Lloyds Reports 146

Cited by:

Cited – Laceys Footwear (Wholesale) Ltd v Bowler International Freight Ltd and Another CA 18-Apr-1997
The defendant’s driver had taken a consignment of shoes to Spain, where they were stolen. The plaintiff alleged his gross negligence amounted to ‘wilful misconduct’ so as to disapply an exemption clause.
Held: Whether a bailee’s acts . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 12 May 2022; Ref: scu.187693

Citations:

[1960] 2 Lloyd’s Rep 150

Cited by:

Cited – Sargent v GRE (UK) Limited CA 16-Apr-1997
The plaintiff had been injured, losing a finger, playing football whilst in the forces. He was unable to continue his profession within the army, and claimed under his insurance against loss of employment through permanent disablement. The insurers . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 12 May 2022; Ref: scu.186066

Prima facie a reference to a ‘child’ in a statute or legal instrument means a child born within wedlock, but the word can be read more widely. Under the Act, which dealt with industrial assurance for the funeral expenses of children, the word should be read to include illegitimate children.

Judges:

MacKinnon J

Citations:

100 LJ KB 263, [1931] 2 KB 125, 145 LT 45, 75 SJ 206, 47 TLR 318

Statutes:

Friendly Societies Act 1896 1(b)

Insurance

Updated: 12 May 2022; Ref: scu.182777

A policy of insurance was granted, ‘subject to the conditions on the back hereof, which are to be taken as part of this policy.’ These provided that when the company did not claim to avoid its liability on the ground of fraud or unfulfilment of the conditions of the policy, any difference arising as to the amount payable in respect of any alleged loss or damage by fire should be referred to the arbitration either of one person chosen by both parties, or by two persons-one appointed by the insured and the other by the company. The conditions further declared that ‘the party insured shall not be entitled to commence or maintain any action at law or suit in equity on this policy till the amount due to the insured shall have been awarded as hereinbefore provided, and then only for the sum so awarded, and the obtaining of such award shall be a condition-precedent to the commencement of any action or suit upon the policy.’
A difference arose between the parties to the policy as to the amount of damage done by a fire to the property insured, and the insured raised this action in order to have the damage ascertained. The insurers defended, on the ground that until the pursuer obtained an award settling its amount the terms of the policy excluded action, but the Court of Session rejected this defence, on the ground that a reference to unnamed arbiters to value subjects, as to the identity or original condition of which there is no dispute, formed the only exception from the rule of Scots law, that a general agreement to refer future differences to arbiters who are not named is not binding on either of the parties.
Held (rev. the judgment of the Court of Session) that the ascertainment of the amount of damage by arbitration was made a condition-precedent to the obligation to pay, and that a court of law could not enforce the obligation until so ascertained.

Judges:

Lord Chancellor (Herschell), and Lords Watson, Ashbourne, and Field

Citations:

[1892] UKHL 172, 30 SLR 172

Links:

Bailii

Jurisdiction:

Scotland

Insurance

Updated: 11 May 2022; Ref: scu.634564

The insurer had noted that an oven on the insured’s premises was a danger. The insured said that the over had been disconnected and was no longer in use. This was not in fact the case. A year later the insurer surveyed the premises. It noted the oven, but did not realise that it was the same oven. The insurer rejected a claim under the policy because of the insured’s failure to inform the insurer of a change which increased the risk.
Held: The claim failed. There was no clear and unequivocal representation made by the insurer that they would not insist on their right to treat the cover as discharged nor such reliance as to make it inequitable for the insurers to go back on it. There was nothing which was more than equivocal when seen in the context of a continuing contractual relationship (one which placed duties on both parties).

Citations:

[2006] Lloyds Rep IR 113

Cited by:

Cited – Wheatley, Smith As Executors of Henry Thomas Cadbury-Brown v King LRA 30-Nov-2011
LRA Estoppel – Exercise of options – whether defect waived – ‘The Kanchenjunga’ [1990] Lloyds Law Reports 391 – Peyman v Lanjani [1985] 1 Ch 457, HIH Casualty and General Insurance Ltd v AXA Corporate Solutions . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 11 May 2022; Ref: scu.465878

Citations:

[1975] 2 Ll LR 169

Cited by:

Cited – Quinn Direct Insurance Ltd v The Law Society of England and Wales CA 14-Jul-2010
Q had provided professional indemnity insurance to a firm of solicitors in which the Law Society had intervened. Claims were made against the firm, but Q declined to pay, saying that the apparently fraudulent activities of the firm fell outside the . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 11 May 2022; Ref: scu.420763

Citations:

[1746] EngR 89, (1746-1779) 1 Black W 593, (1746) 96 ER 342 (B)

Links:

Commonlii

Cited by:

See Also – Carter v Boehm 1766
Lord Mansfield CJ said: ‘The underwriter, here, knowing the governor to be acquainted with the state of the place; knowing that he apprehended danger, and must have some ground for his apprehension; being told nothing of either; signed this policy, . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 11 May 2022; Ref: scu.380477

Liability under reinsurance was not invalidated by a compromise including other claims. The parties to reinsurance contracts could set their own ways of proving the loss within a contract. A Full Reinsurance Clause is not binding in respect of any cover, or any exclusion of cover, not included in the reinsurance or otherwise in the retrocession. A reinsurer cannot be held liable unless the loss falls within the cover of the underlying insurance contract and within the cover created by the reinsurance
Lord Mustill said that a ‘follow the settlements’ provision is to be interpreted against the background of two rules: ‘First, that the reinsurer cannot be held liable unless the loss falls within the cover of the policy reinsured and within the cover created by the reinsurance. Second, that the parties are free to agree on ways of proving whether these requirements are satisfied. Beyond this, all problems come from the efforts of those in the market to strike a workable balance between conflicting practical demands and then to express the balance in words.
These practical demands can be seen most easily in the context of traditional reinsurance, where the party reinsured is the insurer under a contract made directly with the person whose property or other interest is at risk. Two impulses act in opposite directions. The first is to avoid the investigation of the same issues twice; and, moreover, an investigation on the second occasion by a reinsurer whose knowledge of what happened when the risk was written, and whose facility for investigating the claim, are inferior to those of the direct insurer. The second impulse, acting in the other direction, is to ensure that the integrity of the reinsurer’s bargain is not eroded by an agreement over which he has had no control.
This conflict is quite easily managed when the insurance and the reinsurance are on the same terms and where the parties are essentially co-adventurers; for example, in participatory reinsurance, or facultative reinsurance with a large retention. Here, the interests of the direct insurers and the reinsurers are broadly the same, and it is not imprudent for the reinsurers to put themselves unconditionally in the hands of the reinsured for the settlement of claims which will be passed on to them.
The problems are more acute when … the terms of the successive policies are not the same … For example, in the former case it may well happen that a claim under the direct policy does not require the determination of issues which are crucial to liability under the reinsurance: as happened in the ‘constructive total loss’ cases like Chippendale v Holt, (1895) 1 Com. Cas. 197; and indeed in the present case where there can be no doubt that the loss, whatever exactly it was, fell within the direct contracts, whereas this was not necessarily the case under the reinsurances.’

Judges:

Lord Mustill

Citations:

Gazette 25-Sep-1996, Times 15-Aug-1996, [1996] 1 WLR 1239

Citing:

Appeal from – Hill and Another v Mercantile and General Reinsurance Co Plc CA 25-Jul-1994
Re-insurers are bound by ‘follow settlement’ clause where the claim is within the risks covered. . .

Cited by:

Cited – Limit (No 3) Ltd and others v PDV Insurance Company CA 11-Apr-2005
There had been substantial oil leaks in Venezuela, which had been insured and then re-insured in London. Permission had been given to serve the defendant out of the jurisdiction, but that permission had been set aside. The claimant now appealed.
Cited – Lexington Insurance Co v AGF Insurance Ltd HL 30-Jul-2009
The respondent insurers had been held liable in Washington, and had been granted indemnity against the appellants by the Court of Appeal. The insurance contract had been under the law of Pennsylvania, but that of the re-insurance under the law of . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 10 May 2022; Ref: scu.81378

A notification of claim which went into more detail than was required under the policy, was not defective for failing to mention other claims of the same general nature.

Citations:

Gazette 10-Jun-1998

Jurisdiction:

England and Wales

Insurance

Updated: 10 May 2022; Ref: scu.81214

A Party having discharged the liability of another and becoming subrogated was entitled not to be prejudiced by acts of the other party.

Citations:

Times 20-Feb-1998

Jurisdiction:

England and Wales

Insurance

Updated: 10 May 2022; Ref: scu.80447

The onus was on an insurance company to prove the want of repair if they wished to avoid liability- standard.

Citations:

Ind Summary 18-Dec-1995

Insurance

Updated: 10 May 2022; Ref: scu.77780

French courts had held the claimant liable to remedy the deficiency of an insolvent company’s assets under a French law. The insured now sought repayment by its insurers, who denied that this was a payment of damages.
Held: The payment was covered under the professional indemnity insurance policy which indemnified the insured: ‘in respect of the Assured’s legal liability to third parties for any third party claim . . for compensatory damages’. Longmore discussed the Lancashire case and said: ‘The first question was whether the phrase ‘all sums which the insured shall become legally liable to pay as compensation’ applied on its true construction to cases where exemplary or punitive damages were awarded. The Court of Appeal held that it did, since all damages in tort, whether compensatory or punitive, go to the plaintiff by way of compensation. The primary consideration was that the policy expressly included cover for torts, which by their nature, attracted claims for exemplary damages and that, if insurers were correct, cover would be excluded for all claims where exemplary damages were sought, even though the claim for such damages might be roundly rejected. A secondary consideration was the difficulty of handling claims if insurers’ construction were correct, because it would be difficult, if not impossible, to separate out the punitive element as opposed to the ordinary compensatory element even after award, let alone before award, when the insured would want insurers to take over their defence.
It is of course true that the policy with which I am concerned does not expressly cover torts which, by their nature, attract awards for exemplary or punitive damages. Nevertheless, both the above considerations have some bearing on the present case. I cannot differentiate sensibly between the phrases ‘compensation’ and ‘compensatory damages’. ‘Compensatory damages’ is equally a phrase which cannot be accepted as being ‘wholly clear and unambiguous’
. . In these circumstances it seems to me that the phrase ‘compensatory damage’ must be given a broad meaning, viz that the damages, if they are to be recoverable, must be claimed by or on behalf of a person in respect of loss which that person has suffered, rather than a sum claimed by an entity, such as the State, (or perhaps the court, to use the wording of Article 180 itself), which has suffered no personal loss.

Judges:

Longmore J

Citations:

(1998) 7 Lloyds Rep IR 266

Cited by:

Cited – Bedfordshire Police Authority v Constable and others ComC 20-Jun-2008
The authority insured its primary liability for compensation under the 1886 Act through the claimants and the excess of liability through re-insurers. The parties sought clarification from the court of the respective liabilities of the insurance . .
Cited – Bedfordshire Police Authority v Constable CA 12-Feb-2009
The police had responded to a riot at Yarlswood detention centre. They had insurance to cover their liability under the 1886 Act, but the re-insurers said that the insurance did not cover the event, saying that the liability was for statutory . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 10 May 2022; Ref: scu.270263

Hides were insured for their journey. Unfortunately they were in a process of putrefaction which would have been complete by the time of arrival at the port of destination, Bordeaux, such that on arrival they could not properly have been described as hides.
Held: Lord Abinger CB: ‘In the case before us the jury have found that the hides were so far damaged by a peril of the sea, that they never could have arrived in the form of hides. By the process of fermentation and putrefaction, which had commenced, a total destruction of them before their arrival at the port of destination, became as inevitable as if they had been cast into the sea or consumed by fire. Their destruction not being consummated at the time they were taken out of the vessel, they became in that state a salvage for the benefit of the party who was to sustain the loss, and were accordingly sold; and the facts of the loss and the sale were made known at the same time to the assured. Neither he nor the underwriters could at that time exercise any control over them, or by any interference alter the consequences. It appears to us, therefore, that this was not the case of what has been called a constructive loss, but of an absolute total loss of the goods: they could never arrive; and, at the same moment when the intelligence of the loss arrived, all speculation was at an end.’

Judges:

Lord Abinger CB

Citations:

[1836] Bing NC 266

Cited by:

Cited – Kastor Navigation Co Ltd and Another v AGF M A T and others (‘Kastor Too’) ComC 4-Dec-2002
The claimant ship owner and its mortgagee sued the defendant insurer after the loss of the insured vessel, through fire. The insurers replied that the damage by fire was so extensive that the vessel was beyond repair when she sank, and was therefore . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 10 May 2022; Ref: scu.251810

The doctrine of subrogation in contracts of insurance operated entirely by virtue of an implied term of the contract of insurance: ‘I take it to be clear beyond all argument that an assured under a policy insuring him against loss of or damage to a chattel, on being indemnified by his insurers for a loss he sustained, does not thereby lose his right of action against the wrongdoer who caused the loss. Under the doctrine of subrogation he must bring an action against the wrongdoer if he is called upon by his insurer to do so and is indemnified against the costs; but it is his own cause of action, not that of his insurer, that he sues on; as against the wrongdoer the insurer has no cause of action of his own.’

Judges:

Lord Diplock

Citations:

[1978] AC 16

Jurisdiction:

England and Wales

Cited by:

Cited – Bee 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: 10 May 2022; Ref: scu.247996

Lord Rodger: ‘Subrogation works by giving the insurer who indemnifies the assured the right to raise proceedings in his name and, by the very nature of the circumstances in which it comes into play, the proceedings by the insurer must necessarily be to recover sums which have already been paid to the assured or paid on behalf of the assured. The remedy could not exist unless, in insurance as in other cases of indemnity, our law took the view that payments made by the indemnifier fall to be ignored in proceedings raised by him in the name of the assured against a third party. Those payments are ignored in all cases where subrogation applies, whatever may be the basis of the action which is raised in the name of the assured after he has been indemnified by the insurer.’

Judges:

Lord Rodger Lord President

Citations:

[2000] Scottish Law Times 1123

Cited by:

Appeal from – Caledonian 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 . .
Cited – Bee 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: 10 May 2022; Ref: scu.248004

Judges:

Potter LJ

Citations:

[2002] 2 Lloyds Rep 421

Jurisdiction:

England and Wales

Citing:

Dictum applied – Wayne Tank and Pump Company Ltd v Employers Liability Assurance Corporation Ltd CA 1973
The court discussed the effect of an exception clause in an insurance policy: ‘The effect of an exception is to save the insurer from liability for a loss which but for the exception would be covered. The effect of the cover is not to impose on the . .

Cited by:

Mentioned – KR and others v Royal and Sun Alliance Plc CA 3-Nov-2006
The insurer appealed findings of liability under the 1930 Act. Claims had been made for damages for child abuse in a residential home, whom they insured. The home had become insolvent, and the claimants had pursued the insurer.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 10 May 2022; Ref: scu.245857

The court was asked whether notice had in substance been properly given by an insured so as to allow a claim to be made under an insurance policy. The County Court judge held that there had been a breach of condition and that the insurers were therefore entitled to decline liability.
Held: The appeal succeeded. The insurers had all relevant information from another source, so notice was irrelevant. The notification condition had been inserted in the policy so as to afford a protection to the insurers so they should know in good time about the accident and any proceedings consequent on it. If they obtain all the material knowledge from another source so that they are not prejudiced at all by the failure of the insured himself to tell him, then they cannot rely on the condition to defeat the claim.
Lord Denning MR said: ”Seeing that they had received the information from the police, it would be a futile thing to require the motor-cyclist himself to give them the self-same information. The law never compels a person to do that which is useless and unnecessary.’
Salmon LJ held that in principle the insurers were entitled to avoid liability on the grounds of the insured’s failure to send them the notice of intended prosecution and summons, but agreed that in the circumstances of the case they had waived their right to do so.

Judges:

Lord Denning MR, Salmon, Dankwerts LJ

Citations:

[1966] 1 WLR 1334

Jurisdiction:

England and Wales

Cited by:

Cited – Shinedean Ltd v Alldown Demolition (London) Ltd and Another CA 20-Jun-2006
The second defendant insurers appealed a finding of liability, saying that the insured had failed to provide its documents within a reasonable time in order to meet a condition to that effect in its terms. The documents had not been provided for . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 10 May 2022; Ref: scu.244493

Insurance – Co-insurance- follow the leader clause binding – following market by leaders settlements – effect whether subject to any proviso that leader’s settlements should have been concluded in a proper and business like way – summary judgement in insurer’s favour.

Judges:

Mance J

Citations:

[1998] 1 Lloyd’s Rep. 423

Insurance

Updated: 09 May 2022; Ref: scu.220814

A policy provided an indemnity against employer’s liability under the 1906 Act, but required employers to keep a wages book and to notify the insurers of details of all remuneration paid during the period of insurance within one month from the end of the period, with provision for retrospective adjustment of the premium if the figures differed from those which had been used to calculate the original premium. The insurers repudiated liabilitysaying the insured, who was a small farmer with one employee, did not keep a wages book. The policy contained a clause providing that observance ‘of the conditions of this policy’ should be a condition precedent to insurer’s liability. Held (by majority): Since the sole object of the condition was to provide for the adjustment of premiums, compliance with it was not a condition precedent to liability. The clause could not have been intended to refer to all the provisions of the policy as some were incapable of being conditions precedent. Having analysed the wages clause and held that parts of it were not so capable, he concluded that the condition: ‘is one and entire, and it is to my mind unreasonable to hold that one sentence in its middle is a condition precedent while the rest of the condition cannot be so considered. A policy of this nature, in case of ambiguity or doubt, ought to be construed against the office and in favour of the policy-holder, and it seems to me unreasonable to hold that the office can escape from all liability by reason only of the omission to duly record in a proper wages book the name of every employee and the amount of his wages. This is only required for the purpose of the statement which, by the proposal, the insured agreed to render at the end of each period of insurance. In my opinion, it ought not to be regarded as in any sense a condition precedent, and it follows that, in my opinion, the appeal fails and must be dismissed with costs.’ Farwell LJ, concurring, stated: ‘It is especially incumbent on insurance companies to make clear, both in their proposal forms and in their policies, the conditions which are precedent to their liability to pay, for such conditions have the same effect as forfeiture clauses, and may inflict loss and injury to the assured and those claiming under him out of all proportion to any damage that could possibly accrue to the company from non-observance or non-performance of the conditions. Accordingly, it has been established that the doctrine that policies are to be construed ‘contra proferentes’ applies strongly against the company: In Re Etherington.’

Judges:

Cozens-Hardy MR, Farwell LJ

Citations:

[1912] 1 KB 415

Statutes:

Workmen’s Compensation Act 1906

Jurisdiction:

England and Wales

Cited by:

Cited – Pilkington United Kingdom Limited v CGU Insurance Plc QBD 28-Jan-2004
The claimants had installed glass tiles in a roof. They fractured, and facing a claim for damages, they sought payment from their insurers. The claimants argued that the risk of fracture meant that the damage occurred upon installation, the insurers . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 09 May 2022; Ref: scu.198322

The House discussed the extent of an insurer’s right of subrogation: ‘My Lords, these authorities seem to me to be conclusive that the right of the underwriters is merely to make such claim for damages as the insured himself could have made, and it is for this reason that (according to the English mode of procedure) they would have to make it in his name;’

Judges:

Lord Cairns

Citations:

(1877) 3 App Cas 279

Jurisdiction:

Scotland

Citing:

Cited – Randal v Cockran 17-Jun-1948
An insurer who has fully indemnified an insured against a loss covered by a contract of insurance between them may ordinarily enforce, in the insurer’s own name, any right of recourse available to the insured. . .
Cited – Mason v Sainsbury 19-Apr-1782
A claim was made upon insurance after a riot. The court asked asked ‘Who is first liable?’ This was not an issue of chronology but of establishing where the primary responsibility lay to make good the loss. The Act laid the primary responsibility . .
Cited – London Assurance Company v SainsburyWood Immigration 28-Jun-1783
An insurance office having paid the assured the amount of the loss sustained by him in consequence of a demolishing by rioters, sued the hundredors under the stat. I G. 1, at. 2, e. 5, s. 6, in their own names. HeId by Lord Mansfield and Butler, J. . .
Cited – Yates v Whyte 1838
Plaintiff sued Defendants for damaging his ship by collision : Held, that Defendants were not entitled to deduct from the amount of damages to be paid by them, a sum of money paid to Plaintiff by insurers in respect of such damage. . .
Cited – Dickenson v Jardine CCP 1868
Goods had been insured for the voyage, but were jettisoned on it. The ship completed her voyage, and the owners of the goods became entitled to recover general average contribution from the other interests which had profited from the jettison. . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 09 May 2022; Ref: scu.191160

The claimant had holiday insurance protecting him against ‘any permanent disability which prevents you from doing all your usual activities’ She was injured in a road traffic accident, losing an eye.
Held: Before a court could judge wording ambiguous, it had first to look at the context. The judge had concluded that the words ‘all your usual activities’ were ambiguous, but he should first have used permissible aids to construction, including identifying the commercial purpose of the document. Nor were the words a stand-alone provision. This provision was intended to provide a similar level of protection to the adjacent clauses, and the contra preferentem rule was inapplicable.

Judges:

Auld LJ, Mummery LJ, Keene LJ

Citations:

Times 27-Nov-2003

Jurisdiction:

England and Wales

Citing:

Cited – Investors Compensation Scheme Ltd v West Bromwich Building Society HL 19-Jun-1997
Account taken of circumstances wihout ambiguity
The respondent gave advice on home income plans. The individual claimants had assigned their initial claims to the scheme, but later sought also to have their mortgages in favour of the respondent set aside.
Held: Investors having once . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 09 May 2022; Ref: scu.188380

ComC Insurance – Marine Insurance Act 1906 – common law – duty not to make fraudulent claims – contractual provision – Conspiracy – injury by unlawful means – intention – combination – breach of duty – right to avoid

Judges:

Mance J

Citations:

[1997] LRLR 94, [1998] Lloyd’s Rep IR 151

Statutes:

Marine Insurance Act 1906

Cited by:

Cited – AXA General Insurance Limited v Gottlieb CA 11-Feb-2005
The defendant made a claim under an insurance policy. The insurer made an interim payment, but then asserted that the claim was fraudulent, and sought recovery of the interim payment.
Held: At common law, fraud in an insurance claim, once . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 09 May 2022; Ref: scu.186604

Lord Mansfield CJ said: ‘The underwriter, here, knowing the governor to be acquainted with the state of the place; knowing that he apprehended danger, and must have some ground for his apprehension; being told nothing of either; signed this policy, without asking a question. If the objection ‘that he was not told’ is sufficient to vacate it, he took the premium knowing the policy to be void; in order to gain, if the alternative turned out one way; and to make no satisfaction, if it turned out the other: he drew the governor into a false confidence . . If he thought that omission an objection at the time, he ought not to have signed the policy with a secret reserve in his own mind to make it void; if he dispensed with the information, and did not think this silence an objection then; he cannot take it up now, after the event.’ and
‘There are many matters as to which the insured may be innocently silent. He need not mention what the underwriter knows: what way soever he came to the knowledge. The insured need not mention what the underwriter ought to know: what he takes upon himself the knowledge of: or what he waives being informed of…and either party may be innocently silent as to grounds open to both to exercise their judgment upon.’
There may be circumstances in which an insurer, by asserting a right to avoid for non-disclosure, would himself be guilty of want of good faith.

Judges:

Lord Mansfield CJ

Citations:

[1766] 3 Burr 1905, [1766] EngR 13, (1766) 3 Burr 1905, (1766) 97 ER 1162 (C)

Links:

Commonlii

Citing:

See Also – Carter v Boehm 1746
. .

Cited by:

Cited – Glencore International Ag and Another v Portman and others CA 13-Dec-1996
The claimants had failed to disclose previous demurrage losses, and now appealed a dismissal of their claim under the policy for non-disclosure such as to be a breach of their duty of utmost good faith.
Held: the demurrage losses incurred by . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 08 May 2022; Ref: scu.182300

Citations:

[1938] 60 LlR 143

Cited by:

Cited – Wylie on Behalf of SMP Motor Policies at Lloyds v Wake CA 21-Dec-2000
The claimant sought to recover damages following a road accident. The driver’s insurance was defective. The driver claimed under section 151, but proceedings were issued without formal notice of the issue of proceedings having been given to MIB. The . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 08 May 2022; Ref: scu.179872

The insurance covered (inter alia) cargo from ports in West Africa with outward cargo to be considered homeward interest 24 hours after the ship’s arrival at her first port of discharge. The reinsurance was at and from West African ports ‘to commence from the loading of the goods.’ Goods shipped at Liverpool were lost 24 hours after the ship’s arrival at the port of Cabenda.
Held: ‘loading’ in the reinsurance applied to outward cargo from Liverpool to West Africa which was left on board and considered as homeward cargo under the insurance. The terms in the reinsurance in the light of the insurance showed that ‘what was meant between the parties was not the actual loading, but a constructive loading, which was what the original underwriters had agreed to treat as a loading on board for the purpose of the homeward voyage.’

Judges:

Lush J

Citations:

(1872) LR 7 QB 580

Jurisdiction:

England and Wales

Cited by:

Cited – Lexington Insurance Co v AGF Insurance Ltd HL 30-Jul-2009
The respondent insurers had been held liable in Washington, and had been granted indemnity against the appellants by the Court of Appeal. The insurance contract had been under the law of Pennsylvania, but that of the re-insurance under the law of . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 07 May 2022; Ref: scu.372858

Citations:

[1837] EngR 363, (1837) 6 Ad and E 75, (1837) 112 ER 29

Links:

Commonlii

Jurisdiction:

England and Wales

Insurance

Updated: 07 May 2022; Ref: scu.313480

Citations:

[2005] EWHC 3093 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Insurance

Updated: 07 May 2022; Ref: scu.237603

ComC Construction of Insurance policies. Whether the Claimant could recover from their insurers for 15 aircraft taken by Iraqi forces in the invasion of Kuwait. Claim was made in respect of spare aircraft parts and for sue and labour expenses. Held that the ground limit did apply to spares, the ground limit was qualified by the words ‘any one occurrence, any one location’ but that stores being looted were not events occurring in war and therefore the claim failed. Sue and Labour cost could not be recovered

Judges:

Rix J

Citations:

[1996] 1 Lloyd’s Rep 664

Jurisdiction:

England and Wales

Cited by:

Appeal from (Affirmed) – Kuwait Airways Corporation and Another v Kuwait Insurance Company Sak CA 21-May-1997
. .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 06 May 2022; Ref: scu.185999

Citations:

[1903] 1 KB 36

Cited by:

Cited – The Seashell of Lisson Grove Ltd and Others v Aviva Insurance Ltd and Others ComC 1-Nov-2011
The claimant’s fish restaurant had burned down. The court was asked to make a preliminary determination of issues on construction on insurance policy. The insured sought to evade what the insurer said were breaches of warranty, misrepresentations . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 06 May 2022; Ref: scu.449873

Steyn LJ said that ‘avoidance for non-disclosure is the remedy provided by law because the risk presented is different from the true risk. But for the non-disclosure the prudent underwriter would have appreciated that it was a different . . risk’

Judges:

Steyn L

Citations:

[1993] 1 Lloyd’s Rep 49

Jurisdiction:

England and Wales

Cited by:

Appeal from – Pan Atlantic Insurance Co Ltd and Another v Pine Top Insurance Co Ltd HL 27-Jul-1994
The plaintiff had written long term (tail) insurance. The defendant came to re-insure it. On a dispute there were shown greater losses than had been disclosed, and that this had been known to the Plaintiff.
Held: ‘material circumstance’ which . .
Explained – Insurance Corporation of Channel Islands Limited and Another v Royal Hotel Limited and others (No 2) 1998
The court was asked whether insurers could avoid a policy by reason of the creation by one of the insured hotel’s directors of false invoices intended to create a more favourable picture of the hotel’s trading performance if it became desirable to . .
Cited – Sharon’s Bakery (Europe) Ltd v Axa Insurance UK Plc and Another ComC 9-Feb-2011
The insurers refused a claim for fire damage alleging that the insured had created a false invoice for use as evidence of title in a separate transaction when seeking finance. . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 06 May 2022; Ref: scu.430366

If there are two concurrent causes of a loss, one falling within the policy, the other simply not covered by the terms of the policy, the insured may recover.

Citations:

(1877) 2 AC 284

Jurisdiction:

England and Wales

Cited by:

Cited – Global Process Systems Inc and Another v Berhad SC 1-Feb-2011
An oil rig (The Cendor MOPU) was being transported from Texas to Malaysia. During the voyage, three of the four legs suffered damage. The insurers refused liability saying that the damage was the result of inherent weaknesses in the rig.
Held: . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 06 May 2022; Ref: scu.428510

An insured ship should be ‘in a condition to encounter whatever perils of the sea a ship of that kind and laden in that way may be fairly expected to encounter.’ However, an express exception of negligence did not cover loss due to unseaworthiness. Lord Blackburn distinguished between (i) a port hole left open on the orlop deck with cargo piled up high against it, where no one could see whether the port hole had been left open or not, in circumstances where it would require a great deal to time to remove the cargo; and (ii) a porthole left open in a cabin which could be shut at a moment’s notice as soon as the sea became rough. In the latter case the vessel would not be unfit to encounter the perils of the voyage because the matter could be set right within a few minutes and ‘if they did not put it right after such a warning, that would be negligence on the part of the crew, and not unseaworthiness of the ship’.

Judges:

Lord Blackburn

Citations:

(1877) 3 AC 72

Jurisdiction:

England and Wales

Cited by:

Cited – Global Process Systems Inc and Another v Berhad SC 1-Feb-2011
An oil rig (The Cendor MOPU) was being transported from Texas to Malaysia. During the voyage, three of the four legs suffered damage. The insurers refused liability saying that the damage was the result of inherent weaknesses in the rig.
Held: . .
Cited – J J Lloyd Instruments Ltd v Northern Star Insurance Co Ltd ‘The Miss Jay Jay’ 1985
Mustill J considered liability under a marine insurance where damage was suffered when the sea state was within what might reasonably be anticipated: ‘The cases make it quite plain that if the action of the wind or sea is the immediate cause of the . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 06 May 2022; Ref: scu.428509

Three parties were named as the insured under a fire policy, a company occupying the insured premises, the freeholders of the premises and the bank who had a floating charge over the property of the occupiers. A question arose as to the nature of their respective interests.
Held: Sir Wilfred Greene MR said: ‘That there can be a joint insurance by persons having a joint interest is, of course, manifest. If A and B are joint owners of property – and I use that phrase in the strict sense – an undertaking to indemnify them jointly is a true contract of indemnity in respect of a joint loss which they have jointly suffered. Again, there can be no objection to combining in one insurance a number of persons having different interests in the subject-matter of the insurance, but I find myself unable to see how an insurance of that character can be called a joint insurance. In such a case the interest of each of the insured is different. The amount of his loss, if the subject-matter of the insurance is destroyed or damaged, depends on the nature of his interest, and the covenant of indemnity which the policy gives must, in such a case, necessarily operate as a covenant to indemnify in respect of each individual different loss which the various persons named may suffer. In such a case there is no joint element at all. There is no joint risk; there is no joint interest; the measure of loss suffered by those two parties will be different, calling for a different measure of indemnity, and, accordingly, it seems to me that there is no joint element about the thing at all. Such a policy, in my judgment, may be more accurately described as a composite policy, because it comprises, for reasons of obvious convenience, in one piece of paper the interests of a number of persons whose connection with the subject-matter of the insurance makes it natural and reasonable that the whole matter should be dealt with in one policy.

Judges:

Sir Wilfred Greene MR

Citations:

[1940] 2 KB 388

Jurisdiction:

England and Wales

Cited by:

Cited – Murphy (By Her Litigation Friend Stockmont) v Holland CA 19-Dec-2003
A married couple had taken out an insurance policy on their joint lives. The policy was maintained after they divorced. On his death, his child by the later marriage claimed a share in the policy under the 1975 Act.
Held: (Chadwick LJ . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 05 May 2022; Ref: scu.195610

The court considered how an event after the insured event may affect the insurance claim: ‘once you have got a constructive total loss, the mere fact that it may ultimately become an actual loss because of some event that is not within the policy does not affect your right at all to claim as for a constructive total loss.’ A notice of abandonment, if not accepted, may be revoked, expressly or by conduct: ‘ It is common ground that there is no pleaded case of equitable estoppel, and that if, therefore, the sole basis for the doctrine of revocation of an abandonment is that of equitable estoppel, then the defendants’ point is a bad one. It seems to me, however, that if an assured, whether before or after commencement of his action, expressly revokes his notice of abandonment, or declares that he will make no claim for a total loss in circumstances where he has recovered his property, then he has chosen or elected to forego his CTL claim and to retain his property. I do not see why he should not be entitled to do so, nor why he should not be bound by that. If he can do it expressly, he can do it impliedly, or by conduct.’

Judges:

Atkinson J

Citations:

[1946] 79 LLR 417

Cited by:

Cited – Kastor Navigation Co Ltd and Another v AGF M A T and others (‘Kastor Too’) ComC 4-Dec-2002
The claimant ship owner and its mortgagee sued the defendant insurer after the loss of the insured vessel, through fire. The insurers replied that the damage by fire was so extensive that the vessel was beyond repair when she sank, and was therefore . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 04 May 2022; Ref: scu.251755

Where the insured property is damaged in a fire, unless the insurers allege that it had been started deliberately with the connivance of the insured, acceptance that a fire had occurred amounted to admission of the operation of an insured peril.

Citations:

[1962] 1 QB 676

Jurisdiction:

England and Wales

Cited by:

Cited – Kastor Navigation Co Ltd and Another v AGF M A T and others (‘Kastor Too’) ComC 4-Dec-2002
The claimant ship owner and its mortgagee sued the defendant insurer after the loss of the insured vessel, through fire. The insurers replied that the damage by fire was so extensive that the vessel was beyond repair when she sank, and was therefore . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 04 May 2022; Ref: scu.251751

Judges:

Saville J

Citations:

[1993] 2 LL Rep 579

Cited by:

Cited – Banco Santander Sa v Bayfern Ltd and Others ComC 29-Jun-1999
The court was asked whether the risk of fraud on the part of the beneficiary of a confirmed deferred payment letter of credit is to be borne by the issuing bank (and so possibly the applicant for the credit) or by the confirming bank where the . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 04 May 2022; Ref: scu.244755

There had been an honest misstatement made by a son about his father’s health in a proposal form for a life insurance. The proposal form was made ‘the basis of the contract’ and there was a further provision in the policy that it could be avoided if the insured had made any ‘fraudulent or untrue’ statement.
Held: Swift J said: ‘The claimant had stated in the proposal form that his father’s health was good, and had agreed that the truth of this statement should be the basis of the contract. The misstatement, therefore, though innocent, was a warranty. And in the body of the policy the claimant further agreed that the policy should be avoided if he had made any untrue statement on matters material to the insurance, and this clearly included innocent misstatements as well as fraudulent statements. The rules [of the defendant society] did not affect the matter and were not inconsistent with the other provisions of the contract. It was unfortunate for the claimant, but, if a person warranted that the statement was true when he had in fact no means of knowing whether it was true of all is, and if ultimately he had to admit that it was false, his insurance was gone.’

Judges:

Swift J

Citations:

(1932) TLR 30

Cited by:

Cited – Genesis Housing Association Ltd v Liberty Syndicate Management Ltd CA 4-Oct-2013
The housing association was to develop an estate of social housing, supported by an insurance guarantee. The insurance proposal contained a clause stating that the information in the proposal was to form the basis of the policy, and that the policy . .
Cited – Genesis Housing Association Ltd v Liberty Syndicate Management Ltd TCC 8-Nov-2012
Insurers had rejected a claim under the policy, saying that the proposal form had included a basis of insurance declaration warranted by the proposer, and that since it had named a main contractor different to the one named, there was no liability . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 04 May 2022; Ref: scu.512347

Citations:

[1925] 23 Ll L Rep 243

Insurance

Updated: 04 May 2022; Ref: scu.449875

A section 51 application was made because the cover was limited under the defendant’s liability policy and insufficient to pay all the damages, let alone any part of the costs, and the defendant was not worth powder and shot. Nonetheless the claim fell squarely within the cover provided by the policy. It was an insured claim, and could have been pursued (subject to the limit of cover) directly against the insurer under the 1930 Act if the insurer had not put the defendant in funds (up to the policy limit) with which to settle it.
Drawing upon general principles about the section 51 jurisdiction Phillips LJ identified two separate bases upon which a liability insurer might become exposed to non-party costs liability. The first basis (by no means limited to insurers) may be labelled intermeddling. Repeating dicta of his own in Murphy v Young and Co’s Brewery Plc [1997] 1 WLR 1591 he said: ‘In Giles v Thompson [1994] 1 AC 142, 164 Lord Mustill suggested that the current test of maintenance should ask the question whether: ‘there is wanton and officious intermeddling with the disputes of others in which the meddler has no interest whatever, and where the assistance he renders to one or the other party is without justification or excuse.’ Where such a test is satisfied, I would expect the court to be receptive to an application under section 51 that the meddler pay any costs attributable to his intermeddling.’
The second arose from the combination of the insurer’s interest in the outcome of the proceedings, its contractual obligation to indemnify the defendant for its costs liability and its exercise of control over the conduct of the defence. In a case where there was no limit of cover which excluded such a contractual obligation in relation to costs he regarded a section 51 order as a convenient time and cost-saving short-cut to recovery against the insurer of an insolvent defendant under the 1930 Act. He regarded a case where a limit of cover excluded the insurer’s contractual liability for costs, as it did in that case, as a ‘more complex’ example of the second type, calling for a more nuanced approach.
The claimant company relied upon five features of the case which justified a section 51 order, namely that: ‘(1) the insurers determined that the claim would be fought; (2) the insurers funded the defence of the claim; (3) the insurers had the conduct of the litigation; (4) the insurers fought the claim exclusively to defend their own interests; (5) the defence failed in its entirety.’
The Court of Appeal agreed. The claim had been funded and defended by the insurers purely in their own interests, regardless of the interests of the assured defendant, who had been entirely without means from start to finish, and who would have been content to settle the case at the outset rather than contest it. The insurers were regarded as the real defendants in all but name. In passing Phillips LJ rejected the submission that exceptionality was to be measured by comparison with other insurance cases rather than the generality of cases, and the argument that an insurer who stayed within the bounds of his rights and obligations under the policy should never be exposed to liability beyond the limit of cover by means of a section 51 application.

Judges:

Phillips LJ

Citations:

[1997] EWCA Civ 2052, [1998] 2 All ER 873, [1998] 1 WLR 12, [1997] CLC 1306

Links:

Bailii

Statutes:

Supreme Court Act 1981 51

Jurisdiction:

England and Wales

Citing:

Cited – Giles v Thompson, Devlin v Baslington (Conjoined Appeals) HL 1-Jun-1993
Car hire companies who pursued actions in motorists’ names to recover the costs of hiring a replacement vehicle after an accident, from negligent drivers, were not acting in a champertous and unlawful manner. Lord Mustill said: ‘there exists in . .

Cited by:

Cited – Travelers Insurance Company Ltd v XYZ SC 30-Oct-2019
Challenge to the making of a non-party costs order under section 51 of the Senior Courts Act 1981 against the product liability insurer of one of the defendants in litigation being managed under a Group Litigation Order (‘GLO’). Many of the . .
Applied – Citibank NA v Excess Insurance Co Ltd 1999
A section 51 application was prompted by the reporting of the Chapman case, and decided by Thomas J specifically upon the basis that the continued defence of the quantum of the claim after judgment on liability had been conducted by the insurers . .
Cited – Palmer v Palmer CA 18-May-2007
. .
Cited – Palmer v The Estate of Kevin Palmer Deceased and others CA 6-Feb-2008
The judge had concluded that the insurers’ conduct of an unsuccessful defence was sufficiently self-motivated to make it the real defendant in all but name, and the Court of Appeal dismissed the appeal against an order that it be liable in costs as . .
Lists of cited by and citing cases may be incomplete.

Insurance, Costs

Leading Case

Updated: 04 May 2022; Ref: scu.142449

Industrial leather gloves were shipped from Calcutta to Rotterdam. On arrival the good were found to be wet, stained, mouldy and discoloured.
Held: The damage had been caused by moisture, which had been absorbed by the goods in the humid atmosphere of Calcutta and had then evaporated and condensed on the top of the container, before falling back on the goods and damaging them. The proximate cause of the damage was external to the goods, even if a characteristic of the goods had helped to create that external cause; and that accordingly the insurer’s defence of inherent vice failed.

Judges:

Phillips J

Citations:

[1989] 2 Lloyd’s Rep 527

Cited by:

Appeal from – T M Noten BV v Harding CA 1990
Bingham LJ wasasked as to what was meant by the proximate cause of an accident at sea, and said: ‘Unchallenged and unchallengeable authority shows that this is a question to be answered applying the common sense of a business or seafaring man.’ . .
Cited – Global Process Systems Inc and Another v Berhad SC 1-Feb-2011
An oil rig (The Cendor MOPU) was being transported from Texas to Malaysia. During the voyage, three of the four legs suffered damage. The insurers refused liability saying that the damage was the result of inherent weaknesses in the rig.
Held: . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 02 May 2022; Ref: scu.428506