The court was asked whether a re-insurer would have repudiated by reason of a failure to disclose an adverse claims record had the broker not been negligent.
Held: if a broker relies on a causation defence he must satisfy the court that the insurer would in fact have exercised its rights and declined to meet the claim; if this is established no loss flows from the breach. If it is not established then damages are assessed on a loss of a chance basis and the court will value the chance of recovering a full or partial indemnity. Kerr J said: ‘once a plaintiff has proved that as the result of the defendant”s negligence he has lost the benefit of a contract which would have been valid if concluded, but which would have been voidable at the election of the other party, then in my view the burden of proof shifts to the defendant to show that on the balance of probabilities the plaintiff would in any event have lost all or part of the benefit of the contract as the result of the probable action of the other party.’
Judges:
Kerr J
Citations:
[1973] Lloyds Rep 217
Jurisdiction:
England and Wales
Cited by:
Adopted – Channon (T/A Channon and Co) v Ward QBD 12-May-2015
The claimant had lost significant sums through his accountancy practice, but now claimed that his insurance broker, the defendant had negligently failed to renew his professional indemnity policies, even though he had supplied policy numbers to the . .
Lists of cited by and citing cases may be incomplete.
Insurance, Professional Negligence
Updated: 04 May 2022; Ref: scu.572354
