Centre Reinsurance International Co and Another v Curzon Insurance Ltd: ChD 12 Feb 2004

It was a necessary part of the system of statutory transfers of insurance obligations under the Act, that the rights should be transferred before exhaustion of any policy excess, and notwithstanding the insolvency. The rights (inchoate at this stage) are transferred on insolvency even where there is an, as yet unreached, excess in the policy of insurance. The benefit of the insurance policy should not become part of the insolvent estate. The court refused to make a blanket order authorising claims handling expenditure by the insurers in general terms: ‘While . . . it may be true that the reinsurers’ exercise of claims handling may be of benefit to TandN’s creditors, the reinsurers’ prime concern is to protect their own interests. The transfer of claims handling rights to the reinsurers is not something which the administrators desire. On the contrary, they are anxious to have control themselves of claims handling in what they see as the best interests of TandN and its creditors. The reinsurers have power to give back control of claims handling to TandN (in effect to the administrators) but the issue assumes that they decline to do so.
In these circumstances, it is difficult to see why the court should direct, in exercise of its power to regulate the conduct of an administration, that the cost to the insurers of conducting claims handling in pursuit of their own interests (in circumstances where, as the issue assumes, the cost of so doing is one which, under the policy, is recoverable in any event from TandN) should enjoy an elevated status as against the claims of others against TandN by treating it as an expense of the administration ahead of TandN’s other pre-administration creditors. There is no injustice in this. If the reinsurers wish to avoid the risk of non-recovery of their claims handling expenses (a circumstance which can only occur if the ultimate net loss never exceeds the retained limit, since, once the retained limit is attained, it will be open to the reinsurers to set-off any un-recovered claims handling costs against the andpound;500m limit of insurance), they can return claims handling to TandN.’


Blackburne J


Times 27-Feb-2004, [2004] EWHC 200 Ch, Gazette 18-Mar-2004, [2004] 2 All ER (Comm) 28


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


England and Wales


CitedCox v Bankside Members Agency Ltd and Others QBD 27-Jan-1995
Some agents had policies against which there were likely to be various calls, either because several claims were being pursued against the same agents by different Lloyd’s Names, or because the policies were group policies covering several agents . .
CitedLloyd v McMahon HL 12-Mar-1987
The district auditor had issued a certificate under the 1982 Act surcharging the appellant councillors in the sum of 106,103, pounds being the amount of a loss incurred or deficiency caused, as the auditor found, by their wilful misconduct.

Cited by:

CitedFirst 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 . .
Appeal FromFreakley 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 InstanceFreakley and others v Centre Reinsurance International Company and others HL 11-Oct-2006
When it became clear that the company would be financially overwhelmed by asbestos related claims, a voluntary scheme of arrangement was proposed under s425. The House was now asked whether the right to re-imbursement of the company’s lawyers after . .
Lists of cited by and citing cases may be incomplete.


Updated: 23 June 2022; Ref: scu.194071