The insurers had conducted the litigation for the defendant under a professional indemnity policy, without objection from the defendant, and the outcome was an award of damages and costs which left part of the costs outside the limit of cover. The limit of cover triggered the section 51 application. The judge decided that the insurers had not conducted the litigation solely in their own interests, and that the defendant had, throughout, an interest in defending its reputation. Further the insurers’ conduct of the case had not been the cause of the claimant incurring costs in excess of the limit of cover. He therefore refused the application, for both those reasons.
Held: The appeal failed. The Court endorsed the judge’s analysis that the question whether a limit of cover case of this type was exceptional for the purposes of section 51 was likely to depend critically upon the extent of the insurer’s self-motivation in its conduct of the defence, although this was not to be regarded as an invariable rule.
Citations:
[2002] Lloyd’s Rep IR 398
Statutes:
Jurisdiction:
England and Wales
Insurance, Costs
Updated: 06 May 2022; Ref: scu.676821
