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 loss, a claim lies under the policy notwithstanding that the conditions were within the range which could reasonably have been anticipated’.
Mustill J said: ‘Assuming, therefore, that the cases on ‘perils of the seas’ may properly be cited in the present context, what principles do they lay down? I think it helpful, when approaching this difficult area of the law, to draw two sets of distinctions. The first relates to weather conditions, which for present purposes may be divided into three categories: (i) ‘Abnormally bad weather’. Here the weather lies outside the range of conditions which the assured could reasonably foresee that the vessel might encounter on the voyage in question. (ii) ‘Adverse weather’: namely, weather which lies within the range of what could be foreseen, but at the unfavourable end of that range. In effect, the weather is worse than could be hoped, but no worse than could be envisaged as a possibility. (iii) ‘Favourable weather’: namely, weather which lies within that range, but is not bad enough to be classed as ‘adverse’. At the other extreme of the range from ‘adverse’ weather can be found what may be called ‘perfect’ weather.
The assignment of the conditions of wind and sea encountered on any particular occasion to one of these categories will vary according to the nature of the voyage: what is abnormal weather for a short passage in sheltered waters may well be commonplace on a winter voyage in the North Atlantic. Similarly, the nature of the vessel will have to be taken into account. Some craft are not intended to endure conditions which would be trivial for a more robust vessel.
‘The second distinction relates to seaworthiness, and is one of degree. A vessel is ‘unseaworthy’ if it is unfit to face all the hazards which ‘a ship of that kind, and laden in that way, may fairly be expected to encounter’ on the voyage: Steel v. State Line S.S. Co., (1877) 3 App. Cas. 72, at p. 77. Thus the vessel must be fit to deal adequately with adverse as well as favourable weather. Moreover, quite apart from mere unseaworthiness, there may be instances in which the ship is in such a weak condition that it cannot withstand even perfect weather. Borrowing a word from Wadsworth Lighterage and Coaling Co. v. Sea Insurance Co., (1929) 34 Ll.L.Rep. 98 at p. 105, the ship may be said to suffer from ‘debility’. All debilitated ships are unseaworthy, but the contrary is not the case.
‘With these distinctions in mind, I believe that the effect of the authorities, so far as material to the present case, may be quite briefly stated as follows.
First, as to ‘perils of the seas’. The definition contained in r. 7 of the rules for the construction of policy set out in the first schedule to the Act excludes ‘the ordinary action of the winds and waves’. While it is tempting to deduce from these words that a loss is not recoverable unless it results from weather which is extraordinary (namely, what I have referred to as abnormal weather conditions) this interpretation is mistaken. The principal object of the definition is to rule out losses resulting from wear and tear. The word ‘ordinary’ attaches to ‘action’, not to ‘wind and waves’. The cases make it quite plain that if the action of the wind or sea is the immediate cause of the loss, a claim lies under the policy notwithstanding that the conditions were within the range which could reasonably have been anticipated. All that is needed is (in the words of Lord Buckmaster in Grant, Smith and Co. v. Seattle Construction and Dry Dock Co., [1920] A.C. 162 at p. 171)-
. . . some condition of sea or weather or accident of navigation producing a result which but for these conditions would not have occurred.
See also Hamilton, Fraser and Co. v. Pandorf and Co., (1887) 12 App. Cas. 518 at p. 527; Canada Rice Mills v. Union Marine and General Insurance Co., (1941) 67 Ll.L.Rep. 549; [1941] A.C. 55 ; N. E. Neter and Co. v. Licences and General Insurance Co., (1944) 77 Ll.L.Rep. 202 at p. 205.
Second, as to causation. It may be that the doctrine of proximate cause has undergone some reassessment since the days when the most important cases on the present topic were decided. In those days the ultimate cause was more readily identified as the proximate cause than might be the case today. Nevertheless, it is clearly established that a chain of causation running – (i) initial unseaworthiness; (ii) adverse weather; (iii) loss of watertight integrity of the vessel; (iv) damage to the subject-matter insured – is treated as a loss by perils of the seas, not by unseaworthiness: see, for example, Dudgeon v. Pembroke, (1874) 9 Q.B. 581, per Mr. Justice Blackburn at p. 595, and (1877) 2 App. Cas. 284 , per Lord Penzance at p. 296, and Frangos v. Sun Insurance Office, (1934) 49 Ll.L.Rep. 354, at p. 359.
Third, as to ‘debility’. Where a ship sinks through its own inherent weakness, there is no loss recoverable under the ordinary form of policy. It is not enough for this purpose that the vessel is unseaworthy. The loss must be disassociated from any peril of wind or water, even if these form the immediate context of the loss, and constitute the immediate agency (for example, the percolation of water through an existing flaw in the hull) by which the loss takes place. As Lord Buckmaster said in Grant, Smith v. Seattle Construction, sup., the policy is not a guarantee that a ship will float. See also Fawcus v. Sarsfield, (1856) 6 E. and B. 192, in relation to the first loss; Merchants’ Trading Co. v. Universal Marine Insurance Co., (1870) 2 Asp. M.L.C. 431, the direction of Mr. Justice Lush approved by the Court of Common Pleas; Ballantyne v. Mackinnon, [1896] 2 Q.B., 455; Sassoon v. Western Assurance Co., [1912] A.C. 561.
Finally, as to the requirement that a loss by perils of the seas shall be ‘fortuitous’. There may be philosophical problems here, possibly compounded by the placing of more weight than it was intended to bear on the apophthegm of Lord Herschell in Wilson, Sons and Co. v. Owners of Cargo per the ‘Xantho’, ((1887) 12 App. Cas. 503 at p. 509) that-
. . . the purpose of the policy is to secure an indemnity against accidents which may happen, not against events which must happen.
There can be few losses of which it can be said that they must happen, in the sense that this accident is bound to happen in this way at this time. Indeed, in some of the leading cases it could hardly have been predicted that the loss was bound to happen at all, whilst the policy was on risk. It is, however, unnecessary to enter into this problem. When the vessel succumbs to debility, the claim fails, not because the loss is quite unattended by fortuity, but because it cannot be ascribed to the fortuitous action of the wind and waves. A decrepit ship might sink in perfect weather tomorrow, or it might not sink for six months. To this extent a loss tomorrow is not inevitable. But if the ship does sink, there is no external fortuitous event which brings it about. In respect of such losses, the ordinary marine policy does not provide a remedy.
‘In the light of these propositions, I now return to the facts of the present case. Miss Jay Jay was plainly unseaworthy, but can it be said that the craft suffered from debility in the sense to which I have referred? It seems to me that the answer must be – ‘No’. There is no reason to suppose that the boat would have sunk at her moorings, or while under way in a millpond sea. Indeed, she had only recently completed a Channel crossing. Conversely, if one asked whether the loss was due to the fortuitous action of the wind and waves, the answer must be – ‘Yes’. True, the weather was not exceptional, but this is immaterial. Whichever of the expert witnesses may be right as to the mechanism of the structural failure, the immediate cause was the action of adverse weather conditions on an ill-designed and ill-made hull. The cases show that this is sufficient to bring the loss within the words of a time policy in the standard form. Since I consider that there is, for present purposes, no material distinction between ‘perils of the seas’ and ‘external accidental means’, I hold that the plaintiffs establish a prima facie loss under section 1 (a) of the policy.’

Judges:

Mustill J

Citations:

[1985] 1 Lloyd’s Rep 264

Statutes:

Marine Insurance Act 1906 55(1)

Jurisdiction:

England and Wales

Citing:

Cited – Steel v State Line Steamship Co 1877
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. . .

Cited by:

Appeal from – J J Lloyd Instruments Limited v Northern Star Insurance Co Ltd; The Miss Jay Jay CA 1987
The insurers insured against an adverse sea but not against defective manufacture or design. Both were found to be proximate causes of the loss.
Held: The Court of Appeal upheld the first instance judge that the owners could claim under the . .
Cited – Global Process Systems Inc and Another v Berhad CA 17-Dec-2009
An oil rig suffered major damage in transit in rough seas. The insurers repudiated liability saying that the damages was the result of a natural vice rather than perils at sea.
Held: The fact that the sea conditions were within the range of . .
Appeal from – J J Lloyd Instruments Ltd v Northern Star Insurance Co Ltd (The ‘Miss Jay Jay’) CA 1987
The owner claimed for damage to the hull of the Jay Jay.
Held: Where there are two operative causes, one covered by the policy risks and one not, then provided that the second cause is not an excluded peril, the Assured can recover. There was . .
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 – Petroleo Brasileiro Sa v Ene Kos 1 Ltd (‘The MT Kos’) SC 2-May-2012
The MT Kos had been chartered by the appellants. The respondents failed to make payments, and notice was given to withdraw the vessel. The contract said that such a notice was without prejudice to any claim. At the time, the vessel was laden. The . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 02 May 2022; Ref: scu.384354

Where insured goods deteriorated during a passage, not because they had been subjected to some external fortuitous accident or casualty, but because of their natural behaviour in the ordinary course of the voyage, then such deterioration amounted to inherent vice or nature of the subject-matter insured. Donaldson LJ (obiter) said: ‘The only respect in which I would differ from Mr Justice Lloyd is in relation to his findings on causation. The learned Judge said: ‘The burden of proving inherent vice undoubtedly rests on the defendants. They have proved that inherent vice was a cause in the sense that without moisture, the damage could not have occurred at all; but they have not succeeded in proving that inherent vice was the cause, the proximate cause, or one of the proximate causes. It was, to use the language which to my mind still expresses the meaning most accurately, a causa sine qua non, but not a causa causans. It may be said that inherent vice must have been the proximate cause if the soya beans were in fact incapable of withstanding the ordinary incidents of the voyage; that is what inherent vice means. I do not agree. Where there is an insurance against risks of heating, and heating occurs because of the conditions under which soya beans were carried on the particular voyage, I am entitled to hold that the cause of the damage were the conditions under which the soya beans were carried, even though the conditions were normal, and even though nothing untoward occurred. I would only be obliged to find that inherent vice was the proximate cause if the soya beans were such that they could not withstand any normal voyage of that duration. For the reasons already mentioned, that was not the case here.’
I fully accept his finding that the cause of the loss was the condition under which the soya beans were carried, but I disagree with his conclusion that this does not constitute a loss proximately caused by inherent vice. As I have said, in my judgment a loss is proximately caused by inherent vice if t he natural behaviour of the goods is such that they suffer a loss in the circumstances in which they are expected to be carried. This is the test under a contract of affreightment and the shipowner in this case could have pleaded inherent vice in answer to a claim for damage to the cargo. In holding that inherent vice is only proved if the soya beans could not withstand any normal voyage of that duration, the learned Judge was introducing a different concept, namely that of certainty of loss. That is a quite different defence. It is in any event subject to the qualification that it must be a certainty which is, or should be, known at least to the assured.’

Judges:

Donaldson LJ

Citations:

[1982] 1 Lloyd’s Rep 136

Jurisdiction:

England and Wales

Cited by:

Appeal from – Soya GmbH Mainz Kommanditgesellschaft v White HL 1983
The cargo, soya beans, was insured against heating, sweating and spontaneous combustion risks. It arrived in a heated and deteriorated condition. The insurers denied liability saying that the proximate cause of the damage was inherent vice or nature . .
Cited – Global Process Systems Inc and Another v Berhad CA 17-Dec-2009
An oil rig suffered major damage in transit in rough seas. The insurers repudiated liability saying that the damages was the result of a natural vice rather than perils at sea.
Held: The fact that the sea conditions were within the range of . .
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.384353

The respondents took valued insurance, including war risks, on a cargo which was later destroyed by the Confederate cruiser Alabama. The underwriters paid to the respondents as on an actual total loss the valued amounts, which were less than the real value. Under a subsequent Act of Congress which created a compensation fund, the US paid to the respondents the difference between their real total loss and the sums received from the underwriters. Under the Act, no claim was allowed for any loss for which the party injured would have received compensation from any insurer, but if such compensation should not have been equal to the loss actually suffered, allowance might be made for the difference; and no claim was allowed by or on behalf of any insurer either in his own right or in that of the party insured.
Held: The underwriters were not entitled to recover the compensation paid by the US government from the respondents. The payment did not reduce the loss, not having been intended to do so. The English and American Governments agreed that the sums which were to be paid were to be paid not in respect of the loss, but in respect of something else, and therefore the payment could not be a reduction of the loss.
Lord Selborne LC said: ‘Now it appears to me that for every other purpose collateral to the contract [of insurance] for the purpose of every question as to whether a particular claim to something which has arisen aliunde is or is not within those rights which result in law from the contract, there is no more reason for holding the valuation to be conclusive between the parties or to operate by way of estoppel than there is in the case in which it is admitted that in England it does not so follow. The title to a particular indemnity granted in particular terms out of a particular fund at the disposal of the United States of America by an Act of the supreme legislature of the United States is not a title which I think can possibly result in law from the contract itself. If such a right exists, it must exist by the combined effect of the contract between the assurer and the assured, and the Act of Congress. It cannot follow from the contract of insurance alone without the Act of Congress.
If the Act of Congress is consistent with such a right, having regard to the contract of insurance, still more if the Act of Congress fairly and equitably interpreted confers such a right, there is no reason whatever why the right should not receive full effect. But how is it possible that such an effect can be produced as to a right which could have no existence apart from the Act of Congress, if the Act of Congress itself expressly excludes it? I cannot for a moment understand the doctrine of moral right and obligation or implied trusts affecting supreme governments and independent states, as applied to a question of this kind. The rights resulting from the contract must be such as in point of law the contract makes: the rights resulting from the Act of Congress must be such as according to its true construction and legal effect the Act of Congress makes; and the rights resulting from both together must be such as are consistent with and flow from the legitimate operation of the whole. Here it is admitted that there is in the Act of Congress everything said and done which a supreme legislature could possibly say or do for the purpose of excluding the present claim and attributing that fund which has been appropriated in this case to the sufferers by the capture, not to the valued part but to the unvalued part of the loss. That distinction, which in my opinion does exclude for this purpose the part covered by the valuation of the policy of insurance, is made by the Act of Congress. It was a true and bona fide valuation but it did not cover the actual loss. The fund awarded by the Act of Congress of the United States is only for that part of the actual loss which the valuation did not cover and which the insurers have not paid.
Whatever views of moral obligation may be entertained with regard to the Act of Congress, I think it is correctly described by Brett L.J. as an act of pure gift from the American Government. We cannot go behind it and inquire into the motives for an act of a supreme legislature on a matter within their legislative powers; and that being so, I am entirely unable, for any practical purpose, to distinguish this case – in which the supreme Government of the United States having absolute power of disposition over this fund have by a solemn Act of their Congress declared that it should be given, not in respect of the loss which had been indemnified as between the assurers and the assured but in respect of the loss which the assured had suffered beyond that amount – from the case of a voluntary gift by an individual in the same terms. Mr. Butt, in his able argument, which was as candid I think as it was able, admitted that if a member of the family of the shipowner who had suffered the loss, or the owner of the cargo, had, after the insurers had paid the loss, made a will in the precise terms of this Act of the Congress of the United States, and had given a fund, over which he had absolute control, for the purpose of indemnifying his relatives or his friends for that portion of the loss which the insurance had not covered, the insurers could not have claimed the gift. I am unable to see, for any legal purpose, a distinction between such a case and the present.’
Lord Blackburn said: ‘The general rule of law (and it is obvious justice) is that where there is a contract of indemnity (it matters not whether it is a marine policy, or a policy against fire on land, or any other contract of indemnity) and a loss happens, anything which reduces or diminishes that loss reduces or diminishes the amount which the indemnifier is bound to pay; and if the indemnifier has already paid it, then, if anything which diminishes the loss comes into the hands of the person to whom he has paid it, it becomes an equity that the person who has already paid the full indemnity is entitled to be recouped by having that amount back.
The first question is this. There had been a policy of insurance and a total loss by capture and destruction of the property insured and a payment of the full value insured – a payment of the total loss under that policy. Subsequently to that payment there came the Treaty of Washington; and afterwards, in consequence of an Act of Congress, a sum of money was paid to the persons who had received payment under the policy; and the question, I apprehend, comes to be, Was that sum or was it not paid so as to be a reduction or diminution of their loss? . . In the present case the government of the United States did not pay it with the intention of reducing the loss. Lord Coleridge says in his judgment, and says very truly, that the Government of the United States cannot by any action of theirs deprive a man suing in this country of any right which he has. I quite agree in that; but I think that Lord Coleridge, if he had taken the same view as I do of the matter, would have seen that an Act of Congress of the United States might effectually prevent any such right arising. If once the right had vested to recover any such sum, of course an Act of Congress could not take it away; but when Congress in express terms say, ‘We do not pay the money for the purpose of repaying or reducing the loss against which the insurance company have indemnified, but for another and a different purpose,’ it effectually prevents the right arising. Bramwell L.J. in his judgment has used the phrase, ‘It was not given as salvage’. I should myself prefer to use my own phrase expressing the same idea and to say that it was not paid in such a manner as to reduce the loss against which the plaintiffs had to indemnify the defendants; it is the same thing but rather differently expressed.’

Judges:

Lord Selborne LC, Blackburn, Watson and Fitzgerald LL

Citations:

(1882) 7 App Cas 333

Jurisdiction:

England and Wales

Cited by:

Cited – Colonia Versicherung A G and others v Amoco Oil Company CA 20-Nov-1996
. .
Cited – Morgan Grenfell Development Capital Syndications Ltd etc) v Arrows Autossports Ltd ChD 11-May-2004
Liability under indemnity . .
Cited – Talbot Underwriting Ltd. v Nausch Hogan and Murray ComC 31-Oct-2005
. .
Cited – St Paul Travelers Insurance Company Ltd v Dargan and Another; Re Ballast plc ChD 15-Dec-2006
. .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 02 May 2022; Ref: scu.291887

Citations:

[1862] EngR 916, (1862) 13 CB NS 381, (1862) 143 ER 151

Links:

Commonlii

Jurisdiction:

England and Wales

Citing:

See Also – Xenos v Wickham 1862
. .

Cited by:

See Also – Stephanos Xenos And Another v Wickham, Chairman Of The Victoria Fire And Marine Insurance Company 18-Apr-1863
. .
See Also – Xenos v Wickham HL 1866
Delivery of document in Escrow
Blackburn J said that a deed is delivered ‘as soon as there are acts or words sufficient to [show] that it is intended by the party to be executed as his deed presently binding on him.’
Lord Cranworth said: ‘The maker (of a deed) may so . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 02 May 2022; Ref: scu.287082

Judges:

Aikens J

Citations:

[2005] EWHC 1090 (Comm)

Jurisdiction:

England and Wales

Cited by:

Appeal from – Absalom v TCRU Ltd CA 19-Dec-2005
Longmore LJ discussed the construction of a contract: ‘(i) the aim of the exercise is to ascertain the meaning of the relevant contractual language in the context of the document and against the background to the document. The object of the enquiry . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 02 May 2022; Ref: scu.279049

A claim was made under a motor insurance policy which excluded liability for loss or damage ’caused or arising while [the] motor car . . Is . . being used for other than private pleasure.’ Lawrence J said: ‘In my judgment, the word ‘pleasure’ is used in this policy in contradistinction to ‘business’.’

Judges:

Lawrence J

Citations:

[1934] 2 KB 236

Cited by:

Cited – HM Revenue and Customs v Lt Cmdr Colin Stone; The Kei ChD 5-Jun-2008
The taxpayer had imported a newly built Dutch Barge. The Revenue appealed a decision that VAT was not payable on that import. He had claimed exemption on the basis that it was a ship exceeding 15 tons and not designed or adapted for leisure use.
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 01 May 2022; Ref: scu.268749

The court considered the effect on a transaction of rules which prohibited the actions of both parties, in this case a prohibition on effecting and carrying out contracts of insurance.

Citations:

[1989] 2 Lloyd’s Rep 430

Cited by:

Cited – Hughes v Asset Managers Plc CA 13-May-1994
The appellants had entered into discretionary investment management agreements wth the respondent. The investments made a substantial losss which the appellants sought to recover, saying that the agreements were void under the 1958 Act.
Held: . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 01 May 2022; Ref: scu.267376

The court held in respect of a third party (legal and contractual liability) policy that the words ‘liable at law’ on their ordinary meaning meant ‘legal liability’ and not merely liable at common law, as contended by the insurers. A third party (legal and contractual liability) policy is a quite different animal from a public liability policy.

Judges:

Hobgouse J

Citations:

[1989] 1 Lloyd’s Rep 289

Cited by:

Cited – Tesco Stores Ltd. v Constable and others Comc 14-Sep-2007
The defendants provided insurance for the claimant to construct a train tunnel over which the claimant would build a supermarket. The tunnel collapsed, and the railway operator claimed for loss of revenues. The insurers denied responsibility saying . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 01 May 2022; Ref: scu.259382

The vessel was first taken captive and then lost. The insurer said that actual loss was caused by the capture, which was excepted.
Held: The right to claim as a constructive total loss had not been affected.

Citations:

[1908] 1 KB 601

Jurisdiction:

England and Wales

Cited by:

Appeal from – Andersen v Marten HL 2-Jan-1908
The ship was a total loss by capture before she became a wreck by perils of the seas. . .
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: 01 May 2022; Ref: scu.251757

The ship was a total loss by capture before she became a wreck by perils of the seas.

Citations:

[1908] AC 334

Jurisdiction:

England and Wales

Citing:

Appeal from – Andersen v Marten CA 1908
The vessel was first taken captive and then lost. The insurer said that actual loss was caused by the capture, which was excepted.
Held: The right to claim as a constructive total loss had not been affected. . .

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: 01 May 2022; Ref: scu.251756

The time to estimate the loss under an insurance claim where the party is put to no expense, as in the case of unrepaired damage, is at the expiration of the risk. In the case of a partial damage short of a total loss left unrepaired, the insured may not recover for the earlier partial loss.

Judges:

Lord Ellenborough

Citations:

[1810] 12 East 648

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: 01 May 2022; Ref: scu.251807

Lloyd’s litigation: abuse of process for names to raise fraud defence to claim for Equitas premium which could have been raised in earlier test cases.

Judges:

Tuckey J

Citations:

[1998] CLC 127

Citing:

Appealed to – Society of Lloyd’s v Fraser (No. 1) CA 1998
Affirmed . .

Cited by:

Appeal from – Society of Lloyd’s v Fraser (No. 1) CA 1998
Affirmed . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 30 April 2022; Ref: scu.220818

The court was concerned with a claim under a solicitors’ professional liability top up insurance policy. By clause 5 the insurer undertook ‘not to avoid repudiate or rescind this insurance upon any ground whatsoever including in particular non-disclosure or misrepresentation’ and a statement that ‘where before the inception or renewal of this insurance a principal has fraudulently failed to disclose and/or fraudulently misrepresented circumstances which might give rise to a claim or claims, the insurer shall be entitled to seek reimbursement from that principal’. There were errors or omissions in the information provided in the insurance proposal form and the insured certified on the form that they were satisfied that the details were correct ‘to the best of our knowledge and belief’.
Held: The judge was prepared to assume that this conduct was fraudulent. He considered the construction exercise against the regulatory background of the Solicitors Indemnity Fund, in particular rules 29 and 30 and the fact that the insurance scheme was intended to provide an indemnity to clients when they had been caused loss by a solicitor. This is clear when one comes to seeing the construction which the learned judge found at pages 1755G- 1756D. He referred then to the insurers’ argument that the warranty on the proposal form was extremely important. He then went on to say that ‘it is not uncommon to find surplusage in a policy of insurance [and that] in no way detracts from the meaning which I have found the parties intended and in which in my judgement is plainly expressed in the language used in the policy as a whole’.

Judges:

Thomas J

Citations:

[1999] 1 WLR 1747, [1998] 4 All ER 788, [1999] Lloyd’s Rep IR 147, [1999] PNLR 269

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: 30 April 2022; Ref: scu.220808

Citations:

[1993] 1 Lloyds Rep 490

Jurisdiction:

England and Wales

Cited by:

Cited – Blackburn Rovers Football and Athletic Club Plc v Avon Insurance Plc, Eagle Star Insurance Company Ltd, AGF Insurance Ltd IC Insurance Ltd ComC 15-Nov-2004
The claimant football club insured its players through the defendants. A footballer injured himself in training and his career was finished. The insurers rejected the claim, and relied upon exception clauses, saying that the true cause was a . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 30 April 2022; Ref: scu.219697

A policy covered the insured against accidental death or injury but excluded injuries happening by exposure of the insured to obvious risk of injury. The insured was killed by a train while attempting to cross a railway line in circumstances that made it difficult to understand how he could not have seen or heard the train approaching. The issue between the parties, therefore, was whether he had exposed himself to an obvious risk of injury within the meaning of the policy.
Held: The contract should not be construed in a way that would make it practically illusory and in a case of real ambiguity the court should lean in favour of the insured. However, the court warned against creating doubts or magnifying ambiguities in order to reach a decision in favour of the insured. ‘The words are ‘exposure of the insured to obvious risk of injury.’ These words suggest the following questions: Exposure by whom? Obvious when? Obvious to whom? It is to be observed that the words are very general. There is no such word as ‘wilful,’ or ‘reckless,’ or ‘careless’; and to ascertain the true meaning of the exception the whole document must be studied and the object of the parties to it must be steadily borne in mind. The object of the contract is to insure against accidental death and injuries, and the contract must not be construed so as to defeat that object, nor so as to render it practically illusory. A man who crosses an ordinary crowded street is exposed to obvious risk of injury; and, if the words in question are construed literally, the defendants would not be liable in the event of an insured being killed or injured in so crossing, even if he was taking reasonable care of himself. Such a result is so manifestly contrary to the real intention of the parties that a construction which leads to it ought to be rejected. But, if this be true, a literal construction is inadmissible, and some qualification must be put on the words used. In the American cases cited by Mr. Jelf, the language of the policy was different, but the foregoing reasoning was adopted by the Court. The real difficulty is to express the necessary qualification with which the words must be taken. In a case on the line, in a case of real doubt, the policy ought to be construed most strongly against the insurers; they frame the policy and insert the exceptions. But this principle ought only to be applied for the purpose of removing a doubt, not for the purpose of creating a doubt, or magnifying an ambiguity, when the circumstances of the case raise no real difficulty. Without attempting to paraphrase the language so as to meet all cases, it is, we think, plain that two classes of accidents are excluded from the risks insured against, viz. (1) accidents which arise from an exposure by the insured to risk of injury, which risk is obvious to him at the time he exposes himself to it; (2) accidents which arise from an exposure by the insured to risk of injury, which risk would be obvious to him at the time, if he were paying reasonable attention to what he was doing. ‘

Judges:

Lindley LJ

Citations:

(1889) 23 QBD 453

Jurisdiction:

England and Wales

Cited by:

Cited – Blackburn Rovers Football and Athletic Club Plc v Avon Insurance Plc, Eagle Star Insurance Company Ltd, AGF Insurance Ltd IC Insurance Ltd ComC 15-Nov-2004
The claimant football club insured its players through the defendants. A footballer injured himself in training and his career was finished. The insurers rejected the claim, and relied upon exception clauses, saying that the true cause was a . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 30 April 2022; Ref: scu.219695

Underwriters were held entitled to avoid insurance policies because of concealment of the undervalue of the insured shipments. Brett LJ said: ‘Here it was not only a concealment, but a fraudulent concealment, for the matter concealed was kept back from the knowledge of the underwriters in order that the assured might thereby derive an advantage. Being therefore fraudulent, it seems to me there should be no return of premium . .’

Judges:

Brett LJ

Citations:

(1880) 6 QBD 222

Jurisdiction:

England and Wales

Cited by:

Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL 20-Feb-2003
The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 30 April 2022; Ref: scu.219461

The plaintiff’s car insurance policy was for one year expiring 19th May 1929. The insured had exchanged the insured car shortly after effecting the insurance, and on 28th July 1928 he was involved in an accident in his new car. In the policy, clause A covered, firstly, ‘All sums which the assured shall become legally liable to pay [for damage] by any motor vehicle described in the schedule hereto (hereinafter called ‘the insured car’) and ‘This insurance shall cover the legal liability as aforesaid of the assured in respect of the use by the assured of any motor car (other than a hired car), provided that such car is at the time of the accident being used instead of ‘the insured car”
Held: The House recognised the principle that in case of doubt such a policy was to be construed against insurers. The case turned on the proviso, which assume[d] ‘that there is ‘the insured car’, the use of which, if an accident arises, would entitle the assured to the benefit of the policy’.
Lord Buckmaster added: ‘But if it be assumed that the original car be sold and another car taken in its place, the result would be, if the appellant’s contention were correct, that it might be possible to shift the insurance from car to car during the whole period of twelve months for which the policy runs, and that although there is no express limitation on the nature of the car that may be regarded as a substitute.’

Judges:

Lord Buckmaster

Citations:

(1931) 48 TLR 17

Jurisdiction:

England and Wales

Insurance

Updated: 30 April 2022; Ref: scu.200471

H, being insured by the defendant company against liability to third parties, negligently injured C in a road accident. C subsequently brought an action against H for damages, but before he could obtain judgment, H was made bankrupt and the official receiver was appointed trustee in the bankruptcy. The trustee informed the defendant company in reply to a question that he did not intend to take any part in C’s action against H. H later purported, for an agreed sum much below the value of the claim to release the defendant company from its obligation under the policy to indemnify him in respect of any judgment obtained against him by C. Shortly afterwards C obtained judgment against H for damages for the personal injuries sustained by him. Later H was made bankrupt a second time and another trustee in bankruptcy was appointed.
Held: Where a person was injured or killed in a motor accident, for which a second (negligent and insolvent) motorist was liable and in respect of which that motorist was insured, that person was confined to his remedy in the negligent motorist’s bankruptcy; Any insurance monies went to swell the sum available to the general body of creditors.

Judges:

Tomlin J

Citations:

[1928] Ch 793

Cited by:

Cited – First National Tricity Finance Ltd v OT Computers Ltd; In re OT Computers Ltd (in administration) CA 25-May-2004
The company had gone into liquidation. They had sold consumer policies as extended warranties on behalf of the claimant. The company had insured its own joint liability under the contracts, and the claimant sought information from the company’s . .
Cited – Bradley v Eagle Star Insurance Co Ltd HL 1989
Mrs Bradley was employed by Dart Mill several times from 1933 and 1970 and acquired byssinosis from inhaling cotton dust. The company was wound up in 1975 and dissolved in 1976. In 1984 she applied to the court for pre-action disclosure under . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 30 April 2022; Ref: scu.198396

One person may have an insurable interest in the life of another.

Citations:

(1877) 25 WR 650

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: 29 April 2022; Ref: scu.195615

”Seizure’ seems to be a larger term than ‘capture’ and goes beyond it, and may reasonably be interpreted to embrace every act of taking forcible possession either by a lawful authority or by overpowering force.’

Judges:

Lord FitzGerald, Earl of Selborne LC, Lord Blackburn and Lord Bramwell

Citations:

(1882-83) LR 8 App Cas 393, 1883 WL 19057

Jurisdiction:

England and Wales

Cited by:

Cited – Kuwait Airways Corporation and Another v Kuwait Insurance Company SAK and others HL 11-Mar-1999
The airline’s airplanes were taken in the invasion of Kuwait. The company sought to claim on its insurance.
Held: This was a matter of construing the particular terms of the insurance contracts. As regards the claims under the insurance . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 29 April 2022; Ref: scu.190116

A deliberate disregard by a driver of EEC Regulations which govern the length of time that it was permissible for him to drive without a break amounted to ‘wilful misconduct’ when he fell asleep at the wheel and the goods he was carrying were destroyed.

Citations:

[1986] 1 Lloyds Reports 54

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 . .
Cited – TNT Global Spa and Another v Denfleet International Ltd and Another CA 2-May-2007
The driver of a lorry carrying the claimant’s goods was said to have fallen asleep at the wheel, and the cargo damaged in the accident. The carrier appealed a finding of liability for wilful misconduct.
Held: ‘I am unable to accept that mere . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 29 April 2022; Ref: scu.187677

The Plaintiffs were insured under a policy that indemnified them, ‘against all sums which the Insured shall become legally liable to pay in respect of . . loss or damage . . during the period of insurance and caused by goods (including containers) . . altered . . or treated in the course of the Business . . ‘. The plaintiffs were supplied with boards by a customer, LMG, to be screen printed. The plaintiffs carried out the work, and redelivered the boards to LMG which in turn supplied them to Mars to make boxes for Maltesers. Mars complained that the packaging had contaminated the sweets. LMG claimed from the plaintiffs (1) the sum it had paid Mars as compensation for the contamination and (2) loss of profits on further orders from Mars. The plaintiffs sought a declaration that they were entitled to an indemnity from insurers if they were held liable for LMG’s loss of profits.
Held: if the plaintiffs were liable for the loss of profits, the liability did not fall within the terms of the cover. (Hobhouse LJ) ‘The indemnity is in respect of sums which the insured shall become legally liable to pay. There is no problem about that because the declaration asked for assumes that there will be such a legal liability. If there is no such legal liability then of course there is no liability to indemnify. It goes on. ‘Legally liable to pay’ has to be ‘in respect of’ – I stress the words ‘in respect of’ – ‘death, bodily injury, illness, loss or damage happening anywhere in the World (excluding the United States of America and Canada) during the period of insurance’. The liability to pay has to be in respect of what, in its context, is clearly some physical event. It is something which can be said to have happened somewhere. It is an event which is happening during the period of the insurance. The event can be death, bodily injury, illness or loss or damage. The words ‘loss or damage’ must, in my judgment, be construed in context as something that relates to a physical event. It goes on: ‘And caused by goods (including containers) . . supplied . . or created in the course of the Business’ of the insured. There is no difficulty about that last step provided it is understood what it relates to. The plaintiffs in the present case did treat and/or supply printed material. They treated it for LMG or supplied it to them. That supply of those goods has caused further events. It has caused the contamination of the package itself and it has caused the contamination of the Maltesers. So the plaintiffs are able to progress from the third element to the second element, namely they can show the goods which they treated have caused damage – which is a physical event occurring somewhere and occurring during the period of insurance – to the packaging and to the Maltesers. That is the limit of what they can prove as a matter of physical causation. One then asks whether the legal liability to pay is in respect of that loss or damage. It is at this point that, in my judgment, the train of reasoning upon which the plaintiff’s argument has to be based breaks down. They have to progress from legal liability in respect of the damage to the packaging and damage to the Maltesers to a loss of goodwill by LMG and loss of profits over a period in the future. The loss of profit in 1990, 1991 and 1992 are not events which are either directly or indirectly covered by this policy. They cannot be correctly described as loss or damage which has happened somewhere; nor have they happened at least partially during the period of insurance. The conclusion at which I arrive is similar to that of the judge: the relevant head of loss is not caused by any defects in the packaging but is caused by Mars choosing not to place further orders with LMG. The same point can be demonstrated by appreciating that causation is, in the context of this cover, a physical concept: the loss or damage has to happen physically during the period of insurance. It is not possible to treat a liability to pay compensation in respect of an economic loss which arises from a loss of goodwill as being in respect of physical loss or damage physically caused. Loss of goodwill is not covered by this policy. The plaintiffs have failed to bring themselves within the relevant part of the cover. The declaration made by the judge was correct.’

Judges:

Hobhouse LJ

Citations:

[1999] Lloyd’s Rep IR 430

Jurisdiction:

England and Wales

Cited by:

Cited – Horbury Building Systems Ltd v Hampden Insurance Nv ComC 9-Sep-2003
The claimant had installed suspended ceilings in a new cinema complex. They took out insurance with the respondents, and now pursued a declaration as to the liability of the defendants under the policy. They had used the wrong washers, leading to a . .
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: 29 April 2022; Ref: scu.186286

A purchaser of a cargo was held to have no insurable interest in the cargo itself until the risk had passed to him on completion of loading. The only possible insurable interest was on the profits from sale of the cargo but not on the cargo itself which alone was the subject matter of the relevant insurance.

Judges:

Blackburn J

Citations:

(1875) LR 10 CP 609 (Exch Ch)

Cited by:

Cited – Feasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey ComC 17-May-2002
The fact that there was more than one insurance policy in place for the same interest would not preclude a claim under one of them. A mutual underwriting group insured members against personal injury and so forth through ‘lineslip’ policies. The . .
Cited – Feasey v Sun Life Assurance Company of Canada and Another: Steamship Mutual Underwriting Association (Bermuda) Ltd v Feasey CA 26-Jun-2003
A policy providing a fixed level of benefit, calculated according to the degree of injury could not be avoided under the 1744 Act on the basis that the insured had no insurable interest. The insurance company said the company had no insurable . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 29 April 2022; Ref: scu.184484

‘The third argument, however, was that that was not a final warehouse within the meaning of the clause. On that point I have come to the conclusion that the plaintiffs are right; that it was not a final warehouse. The first and elementary consideration is this. The expression ‘final warehouse’ seems to contemplate that there may be a warehouse which is not final. If one were searching for an example of a non-final example of a warehouse it would be difficult or impossible to find a better example than a transit shed, which is essentially a shed in which goods are temporarily placed pending some further movement to some other place. The word ‘transit’ itself implies its transitory character. Then one looks at the clause itself, and one must try to construe it as it stands in relation to the other provisions of the policy. One has to bear in mind also what was said in the Mersey Docks and Harbour Board letter, that, when a ship is unloading, the normal practice is to put the goods in a transit shed. That is where they go straightaway. The effect of the Act and Regulations is that for the purposes of free rent or special rent the transit shed counts as the quay, or goods in a transit shed count as goods on a quay. It is clear under Clause 1 that the mere putting of goods on a quay does not terminate the insurance. After the arrival of the goods on the quay the insurance may last 60 days. ‘

Citations:

[1960] Lloyd’s Rep 554

Cited by:

Cited – Bayview Motors Ltd v Mitsui Marine and Fire Insurance Company Ltd and others CA 7-Nov-2002
Two consignments of motor vehicles were protected in transit by a marine insurance. They were misappropriated at the port of landing. The insurers appealed a finding that the cars were still insured.
Held: The theft by an officer of the state . .
Cited – Bayview Motors Ltd v Mitsui Marine and Fire Insurance Company, Ltd and others ComC 23-Jan-2002
Two consignments of motor vehicles had been misappropriated by customs officers at Santo Domingo. The insurers under a marine insurance policy resisted payment on the basis that the cover was concluded.
Held: The occurrences giving rise to the . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 29 April 2022; Ref: scu.183040

An Inchmaree clause didn’t apply if a welding break caused no damage to the other vessel.
cw Insurance – Inchmaree clause – scope – latent defects – patent defects – separate parts of insured property.

Citations:

Ind Summary 04-Dec-1995, [1996] 1 Lloyd’s Rep 85, [1996] CLC 294, Lloyd’s List 15 November 1995 (I D )

Jurisdiction:

England and Wales

Citing:

Reversed on Appeal to – Promet Engineering (Singapore) Pte Ltd (Formerly Self-Elevating Platform Management Pte Limited) v Nicholas Colwyn Sturge and others (The Nukila) CA 26-Mar-1997
Insurers were liable for other damage to ship hull if there had been more than a latent defect in it. In Inchmaree clauses in English law, ‘damage’ usually refers to a changed physical state. . .

Cited by:

Reversing on appeal from – Promet Engineering (Singapore) Pte Ltd (Formerly Self-Elevating Platform Management Pte Limited) v Nicholas Colwyn Sturge and others (The Nukila) CA 26-Mar-1997
Insurers were liable for other damage to ship hull if there had been more than a latent defect in it. In Inchmaree clauses in English law, ‘damage’ usually refers to a changed physical state. . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 28 April 2022; Ref: scu.85059

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 would require disclosure under the Act are such circumstances as would affect an insurer’s mind. Did it operate as an inducement to the insurer to enter into the policy? In order to be entitled to avoid a contract of insurance or reinsurance on the ground of non-disclosure the insurer must show both that the fact not disclosed was material, and that its non-disclosure induced the contract. To be material a fact did not have to have a decisive influence on the mind of the prudent underwriter. The test is as stated in subsections 18(2) and 20(2) which relate to non-disclosure and misrepresentation respectively and which set out the common law principles relevant to non-marine (as well as marine) insurance. The material non-disclosure or misrepresentation must induce the contract. It is not sufficient that the non-disclosure or misrepresentation is material: ‘there is to be implied in the Act of 1906 a qualification that a material representation will not entitle the underwriter to avoid the policy unless the misrepresentation induced the making of the contract, using ‘induced’ in the sense in which it is used in the general law of contract’ and ‘in practice the line between misrepresentation and non-disclosure is often imperceptible.’
A ‘material circumstance’ which might justify an insurer’s avoidance of a policy was one that would have an effect on the mind of the prudent insurer in estimating the risk; but, for a circumstance to be material, it was not necessary that it should have a decisive influence (such that but for the misrepresentation or non-disclosure the insurer would have declined the risk or accepted it only on different terms). But before an underwriter could avoid for non disclosure he had to show that he had actually been induced by the non-disclosure to enter into the policy on the relevant terms (i.e. that if the full facts had been disclosed he would not have entered into it or would have done so only on different terms). Even where there is non-disclosure of a material fact, if this does not in fact influence the judgment of the actual underwriter, avoidance is not justified. Lord Mustill said that ‘in practice the line between misrepresentation and non-disclosure is often imperceptible’.
‘In the general law it is beyond doubt that even a fraudulent misrepresentation must be shown to have induced the contract before the promisor has a right to avoid, although the task of proof may be made more easy by a presumption of inducement.’

Judges:

Lord Mustill

Citations:

Times 27-Jul-1994, Independent 04-Aug-1994, Gazette 07-Oct-1994, [1995] 1 AC 501, [1994] 3 All ER 581, [1994] 2 Lloyds Rep 427, [1994] 3 WLR 677

Statutes:

Marine Insurance Act 1906 18 20(2)

Jurisdiction:

England and Wales

Citing:

Applied – Berger and Light Diffusers Pty v Pollock 1974
. .
Applied – Container Transport International Inc v Oceanus Mutual Underwriting Association (Bermuda) CA 1984
The plaintiffs operated a scheme relying upon insurance. The insurers refused to renew, and they then approached and obtained insurance from the defendants, but it was alleged without disclosing the full history.
Held: The plaintiffs had made . .
Appeal from – Pan Atlantic Insurance Co Ltd and Another v Pine Top Insurance Co Ltd CA 1993
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’ . .

Cited by:

Cited – Drake Insurance Plc v Provident Insurance Plc ComC 3-Feb-2003
A driver caused an accident, and the claimant insurance company paid out. It now sought a contribution from the defendant, who had also insured the driver, but had denied liability. The driver was a named additional driver under the second policy, . .
Cited – Assicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002
Rehearing/Review – Little Difference on Appeal
The appellant asked the Court to reverse a decision on the facts reached in the lower court.
Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .
Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL 20-Feb-2003
The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
Cited – Norwich Union Insurance Ltd v Meisels and Another QBD 9-Nov-2006
The claimants sought payment for water damage under their policies. The insurer alleged non-disclosure. The judge had found the claimants to be honest, and criticised the defendants witnesses. The claimants had been involved in companies which had . .
Cited – Simms v Conlon and Another CA 20-Dec-2006
Solicitors within a practice sued each other, and one wished to plead the fact of a finding of professional misconduct.
Held: The defendant’s appeal succeeded. It was not an abuse for the appellant to continue to assert his innocence, and the . .
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. . .
Cited – 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 – Hayward v Zurich Insurance Company Plc SC 27-Jul-2016
The claimant had won a personal injury case and the matter had been settled with a substantial payout by the appellant insurance company. The company now said that the claimant had grossly exaggerated his injury, and indeed wasfiully recovered at . .
Cited – Versloot Dredging Bv and Another v Hdi Gerling Industrie Versicherung Ag and Others SC 20-Jul-2016
The ‘DC MERWESTONE’ suffered a water ingress of water flooding the engine room. This resulted from (i) the negligence of the crew in failing to close the sea inlet valve of the emergency fire pump and drain down the system, after they had used the . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 28 April 2022; Ref: scu.84547

The insurer sought repayment of a claim it had settled saying that the claim for expenses had been fraudulent.

Judges:

Eder J

Citations:

[2011] EWHC 362 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Insurance

Updated: 28 April 2022; Ref: scu.430249

A cargo of casks and bags of china clay out-turned damaged, as a result of the stoving in of the casks on a voyage during which there had been heavy weather.
Held: The claim failed. The plaintiffs had not proved that the proximate cause of the loss was the rough weather. The causing of the damage was ‘equally consistent with defects in the casks, accidents during loading, bad stowage, rough weather, or accidents during or after discharge’ However, had it been shown to be the heavy weather, he would have held there to have been a loss by perils of the sea, even though there was nothing abnormal or unexpected in the weather on such a voyage in the month in which it occurred. Tucker J said: ‘Having regard to Thames and Mersey Marine Insurance Co Ltd v Hamilton, Fraser and Co (1887) 12 App Cas 484, the Xantho case (1887) 12 App Cas 503, and Hamilton, Fraser and Co v Pandorf and Co (1887) 12 App Cas 518, and the recent Privy Council decision in Canada Rice Mills, Ltd v Union Marine and General Insurance Co Ltd [1941] AC 55, I think it is clearly erroneous to say that, because the weather was such as might reasonably be anticipated, there can be no peril of the seas. There must, of course, be some element of the fortuitous or unexpected to be found somewhere in the facts and circumstances causing the loss, and I think such an element exists when you find that properly stowed casks, in good condition when loaded, have become stoved in as a result of the straining and labouring of a ship in heavy weather. It is not the weather by itself that is fortuitous; it is the stoving in due to the weather, which is something beyond the ordinary wear and tear, of the voyage. This appears to me to be ‘something which could not be foreseen as one of the necessary incidents of the adventure’. It was ‘an accident which might happen, not an event which must happen’, to quote the language of Lord Herschell in the Xantho.’

Judges:

Tucker J

Citations:

[1944] 4 All ER 341

Jurisdiction:

England and Wales

Cited by:

Cited – Global Process Systems Inc and Another v Berhad CA 17-Dec-2009
An oil rig suffered major damage in transit in rough seas. The insurers repudiated liability saying that the damages was the result of a natural vice rather than perils at sea.
Held: The fact that the sea conditions were within the range of . .
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: 12 April 2022; Ref: scu.384352

The court considered appeals from conflicting interpretations of the effect of s1(3) of the 1930 Act on pay to be paid clauses in the event of the insolvency of the insured.
Held: The condition did not purport to avoid the contract or to alter the rights of the parties under the contract in the event of the insured company’s insolvency. The rights of the company and the insurers remained the same after a winding up as they had been before winding up. Lord Justice Stuart-Smith: ‘What is affected or altered by the insolvency or winding up is the ability to enjoy the rights, but not the rights themselves, which remain the same before and after the event, save that upon the winding up the rights are transferred to the third party.’ Lord Justice Bingham set out principles for the interpretation of the 1930 Act: ‘(1) Its primary purpose was to remedy the injustice highlighted in Re Harrington (In re Harrington Motor Co Ltd [1928] Ch 105). Had the 1930 Act governed that case the pedestrian would have been able to enforce his claim directly against the insurer (and he could have done so even if the insurer had already paid the liquidator). But had the Act stopped there it would have been open to the parties to agree that the right to indemnity should cease on bankruptcy or winding up, so that there would be no rights in the insured to be transferred to the injured third party. It was accordingly necessary for the Act to invalidate avoidance clauses of this kind, and that was duly done . . (7) As Mr Justice Slade (as he then was) put it in The Allabrogia [1979] 1 Lloyd’s Rep. 190 . . ‘The manifest purpose of s.1(3) is to make certain that, in any of the events specified in s.1(1), the third party shall be able to take the full benefit of the rights against the insurer, unaltered and undiminished by any provision in the contract which is designed directly or indirectly to cancel, prejudice or reduce such rights in the event of one or more of such events taking place.’
Section 1(3) accordingly provides that the insurance contract shall be of no effect in so far as it purports directly or indirectly to avoid the contract or alter the rights of the parties under it upon the happening to the insured of any of the specified events. This seems to me to be an almost standard provision prohibiting parties from, in effect, contracting out of a statutory requirement. The application of the sub-section requires one to construe the insurance contract between insurer and insured to ascertain whether the rights of the contracting parties are determined or altered under the contract on the happening of one of the specified events. (8) . . . The question posed by Mr Justice Slade in The Allobrogia (sup) (at p.198) was whether the provision under review has the substantial effect of avoiding the contract between the member and the club or altering the rights of the parties upon the happening to the member of any of the events mentioned in s.1(1) of the 1930 Act, and I did not understand any of the parties before us to challenge that approach. In my opinion it is correct.’

Judges:

Lord Justice O’Connor, Lord Justice Bingham and Lord Justice Stuart-Smith

Citations:

[1989] 1 Lloyd’s Rep 239

Statutes:

Third Parties (Rights Against Insurers) Act 1930 1(3)

Jurisdiction:

England and Wales

Citing:

Appeal from – Socony Mobil Oil Co Inc and others v West of England Ship Owners Mutual Insurance Association Ltd (the ‘Padre Island’) (No 2) 1987
. .
Appeal from – Firma CF-Trade SA v Newcastle Protection and Indemnity Association (the ‘Fanti’) QBD 1987
The court considered the effect of section 1(3) on a ‘pay to be paid’ clause in a re-insurance contract.
Held: If, as a matter of construction of the membership rules, the condition survived the making of a winding-up order – which he thought . .
Cited – Re Harrington Motor Co Ltd, Ex parte Chaplin 1928
A person injured in a road accident had obtained judgment for damages against the company, but had been unable to enforce the judgment before the company went into liquidation. The company’s motor insurers paid the amount of the judgment to the . .

Cited by:

Cited – Freakley and Curzon Insurance Ltd v Centre Reinsurance International Company and Another; similar CA 11-Feb-2005
Claims were made for personal injury caused by asbestos. The re-insurers sought declaratory relief against the head insurers, and the administrators of the insolvent company. The administrators sought declarations in turn. Curzon insured the company . .
At first instance – Socony Mobil Oil Co Inc and others v West of England Ship Owners Mutual Insurance Association Ltd (Padri Island) (No 2); Firma CF-Trade SA v Similar (The ‘Fant’) HL 14-Jun-1990
The House was asked as to the effect of section 1(3) of the 1930 Act on policies including ‘pay or be paid’ clauses.
Held: The central question was whether the condition of prior payment was rendered of no effect by section 1(3) of the Act of . .
Lists of cited by and citing cases may be incomplete.

Insurance

Updated: 12 April 2022; Ref: scu.223315

‘losses on risks covering on an aggregate basis’ did not allow aggregation for excess where losses covered on individual basis.

Citations:

Gazette 18-Feb-1998

Jurisdiction:

England and Wales

Insurance

Updated: 10 April 2022; Ref: scu.90655

A pre-contractual obligation is not an obligation under s5.1 of the Convention.

Citations:

Times 04-Aug-1994

Statutes:

Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1988 5.1

Insurance

Updated: 10 April 2022; Ref: scu.89962

Rights to extension of insurances did not give rights to insist others should.

Citations:

Gazette 22-Jul-1992

Jurisdiction:

England and Wales

Insurance

Updated: 10 April 2022; Ref: scu.89930

Sums recovered in Lloyd’s litigation were to be used to set off debts under deed.

Citations:

Times 07-Nov-1996

Jurisdiction:

England and Wales

Insurance

Updated: 09 April 2022; Ref: scu.84169