ECJ Directive 2002/92/EC – Insurance mediation – Exclusion of the activities pursued by an insurance undertaking or an employee acting under the responsibility of such an undertaking – Whether it is possible for such an employee to pursue insurance mediation activities on an incidental basis – Professional requirements
C-555/11, [2013] EUECJ C-555/11
Bailii
Directive 2002/92/EC
European
Insurance
Updated: 22 November 2021; Ref: scu.516573
The insurance brokers, acting to arrange insurance for a small private limited company did not owe a duty in tort to the directors of that company personally. Where an action was brought in a tort and in breach of contract, damages could not be awarded on the tort where they were not available in contract.
Balcombe LJ
[1992] BCLC 793, Times 02-Apr-1992
England and Wales
Citing:
Followed – Watts and Co v Morrow CA 30-Jul-1991
The plaintiff had bought a house on the faith of the defendant’s report that there were only limited defects requiring repair. In fact the defects were much more extensive. The defendant surveyor appealed against an award of damages after his . .
Cited by:
Cited – Johnson v Gore Wood and Co (a Firm) CA 12-Nov-1998
The claimant had previously issued a claim against the defendant solicitors through his company. He now sought to pursue a claim in his own name. It was resisted as an abuse of process, and on the basis that no personal duty of care was owed to the . .
Cited – Hamilton Jones v David and Snape (a Firm) ChD 19-Dec-2003
The claimant was represented by the respondent firm of solicitors in an action for custody of her children. Through their negligence the children had been removed from the country. She sought damages for the distress of losing her children.
Agency, Insurance, Company, Contract, Negligence, Damages
Updated: 16 November 2021; Ref: scu.181818
[2005] EWHC 678 (Comm)
Bailii
England and Wales
Insurance
Updated: 15 November 2021; Ref: scu.224564
The claimant manufacturer challenged a refusal of indemnity from his insurers, the defendants under its product liability policy. An end user consumer had been injured. The insurer said that the claimant had delayed on notifying the possible claim.
Held: The claim succeeded: ‘the likelihood of a claim cannot simply be inferred from the happening of an accident’ and ‘when the accident occurred, there was not at least a fifty per cent chance that a claim against the Claimant would eventuate. There had been an accident. The gun was involved. It was a possibility, but not more, that the accident involved a fault in the gun. But there were other possibilities: a fault in the way in which the gun was used, or no fault at all.’
Knowles CBE J
[2015] EWHC 1708 (Comm)
Bailii
Citing:
Cited – Layher Ltd v Lowe and Others CA 8-Jan-1997
The insurers became insolvent, and re-insurers sought to escape liability saying that no sums had been paid out to trigger the re-insurer’s liability.
Held: Re-Insurers were liable under a policy requiring them to pay out on sums paid out by . .
Cited – Verelst’s Administratrix v Motor Cross Union Insurance Company Limited 1925
The insured was killed in a motor accident in India on 14 January 1923. Knowledge of her death reached her personal representative in England within a month, but the personal representative did not know of the existence of the insurance policy until . .
Cited – Jacobs v Coster, Avon Insurance CA 25-Jan-1999
. .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 09 November 2021; Ref: scu.549251
A ship was caught in harbour when an air raid broke out. The master took the ship to sea where it suffered damage.
Held: The shipowners were protected by a war risks clause in the charterparty agreement. As to waiver by election, Lord Goff of Chieveley said: ‘In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election. Characteristically, this state of affairs arises where the other party has repudiated the contract or has otherwise committed a breach of the contract which entitles the innocent party to bring it to an end, or has made a tender of performance which does not conform to the terms of the contract. .
In all cases, he has in the end to make his election, not as a matter of obligation, but in the sense that, if he does not do so, the time may come when the law takes the decision out of his hands, either by holding him to have elected not to exercise the right which has become available to him, or sometimes by holding him to have elected to exercise it. Instances of this phenomenon are to be found in s. 35 of the Sale of Goods Act 1979. In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him – for example, to determine a contract or alternatively to affirm it – he is held to have made his election accordingly . . perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms Moreover, it does not require consideration to support it, and so it is to be distinguished from an express or implied agreement, such as a variation of the relevant contract, which traditionally requires consideration to render it binding in English Law.’
Lord Goff of Chieveley
Times 19-Feb-1990, [1990] CLY 4077, [1990] 1 Lloyds Rep 391
Sale of Goods Act 1979 35
England and Wales
Cited by:
Cited – Oliver Ashworth (Holdings) Limited v Ballard (Kent) Limited CA 18-Mar-1999
In order for the landlord to claim double rent where a tenant held over unlawfully after the tenancy was determined, the landlord must not do anything to indicate that the lease might be continuing, for example by denying the validity of break . .
Cited – Peregrine Systems Ltd v Steria Ltd CA 14-Mar-2005
The claimant provided computer software to the defendants. The defendants appealed dismissal of their defences arguing that the system had failed.
Held: No repudiatory breach was established, and moreover Steria had elected to affirm the . .
Cited – Stocznia Gdynia Sa v Gearbulk Holdings Ltd CA 13-Feb-2009
Orders were placed for the construction of ships. They were not delivered. The buyer, the defendant, cancelled the orders. The defendants sought the loss of profit. The claimants said they were entitled only to the repayment of instalments. The . .
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 . .
Explained – Tele2 International Card Company Sa and others v Post Office Ltd CA 21-Jan-2009
Appeal against rejection of claim for novation of contract.
Held: Aikens LJ summarised the analysis by Lord Goff of the principles of affirmation by election in Kanchenjunga as follows: ‘i) If a contract gives a party a right to terminate upon . .
Cited – Force India Formula One Team Ltd v 1 Malaysia Racing Team Sdn Bhd and Others ChD 21-Mar-2012
The claimants alleged misuse by the defendants of confidential information.
Held: Arnold J said: ‘Confidential information is not property, however, even though businessmen often deal with confidential information as if it were property and . .
Lists of cited by and citing cases may be incomplete.
Insurance, Contract, Equity
Leading Case
Updated: 09 November 2021; Ref: scu.188152
Macaura owned the large majority of shares in a limited company, trading in timber. The company also owed him substantial sums. He kept on the insurance of timber and other assets within the business but in his own name. When he came to claim, his claim was refused by the insurers.
Held: His appeal failed. An insurable interest in property could only arise where the insured held a legal or equitable interest in the insured property.
Neither a shareholder nor a simple creditor of a company had any insurable interest in any particular asset of the company because as such he had no legal or equitable interest in it.
Lord Buckmaster said: ‘Turning now to his position as shareholder, this must be independent of the extent of his share interest. If he were entitled to insure holding all the shares in the company, each shareholder would be equally entitled, if the shares were all in separate hands. Now, no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up. If he were at liberty to effect an insurance against loss by fire of any item of the company’s property, the extent of his insurable interest could only be measured by determining the extent to which his share in the ultimate distribution would be diminished by the loss of the asset – a calculation almost impossible to make. There is no means by which such an interest can be definitely measured and no standard which can be fixed of the loss against which the contract of insurance could be regarded as an indemnity . . In the present case, though it might be regarded as a moral certainty that the appellant would suffer loss if the timber which constituted the sole asset of the company were destroyed by fire, this moral certainty becomes dissipated and lost if the asset be regarded as only one in an innumerable number of items in a company’s assets and the shareholding interest be spread over a large number of individual shareholders.’ and ‘No shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up.’
Lord Sumner also said that the appellant had no insurable interest: ‘It is clear that the appellant had no insurable interest in the timber described . . He had no lien or security over it and, though it lay on his land by his permission, he had no responsibility to its owner for its safety, nor was it there under any contract that enabled him to hold it for his debt. He owned almost all the shares in the company, and the company owed him a good deal of money, but, neither as creditor nor as shareholder, could he insure the company’s assets. The debt was not exposed to fire nor were the shares, and the fact that he was virtually the company’s only creditor, while the timber was its only asset, seems to me to make no difference. He stood in no ‘legal or equitable relation to’ the timber at all. He had no ‘concern in’ the subject insured. His relation was to the company, not its goods, and after the fire he was directly prejudiced by the paucity of the company’s assets, not by the fire.’
Lord Wrenbury said: ‘My Lords, this appeal may be disposed of by saying that the corporator even if he holds all the shares is not the corporation, and that neither he nor any creditor of the company has any property legal or equitable in the assets of the corporation.’
Lord Buckmaster, Lord Wrenbury, Lord Sumner
[1925] AC 619, (1925) 133 LT 152, [1925] All ER 51, [1925] AC 619, [1925] All ER Rep 51, 94 LJPC 154, 133 LT 152, 41 TLR 447, 69 Sol Jo 777, 31 Com Cas 10 HL
England and Wales
Cited by:
Distinguished – Sharp v Sphere Drake Insurance plc (The Moonacre) 1992
S, a retired businessman, had bought a vessel and insured it in his name, but registered it in the name of company, R. In the winter, the boat was laid up, but occupied by a workman who maintained it and kept it secure. The boat was destroyed by a . .
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 – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Lists of cited by and citing cases may be incomplete.
Insurance, Company
Leading Case
Updated: 09 November 2021; Ref: scu.184482
The Popi M sank in calm seas and fair weather as a result of a large and sudden entry of water into her engine room through her shell plating. The vessel’s owners claimed against her hull and machinery underwriters, contending that the loss was caused by a peril of the sea or alternatively by crew negligence. The suggested peril of the sea was a moving submerged object, i.e. a submarine. The underwriters contended that the vessel was not seaworthy. More specifically, the underwriters advanced a mechanism for unseaworthiness through wear and tear, based on expert metallurgical evidence. The judge rejected that theory. He also rejected the owners’ argument that there had been crew negligence. That left the possibilities that the vessel was in some other way unseaworthy or that it collided with a submarine. There was no clear basis upon for the court to say that burden of proof had been discharged.
Held: The burden of proving this, on a balance of probabilities, lay on the plaintiffs. A trial judge is not bound to accept the evidence of one side or the other: there remains the possibility of deciding the case on the burden of proof. The court should avoid deciding cases on a balance of improbabilities. It was not possible to proceed on the basis of eliminating the impossible and deciding that the remaining explanation, however improbable, must be the cause, unless all the relevant facts were known; that state of affairs did not exist, as the ship had sunk in deep water. The concept of proof on a balance of probabilities had to be applied with common sense. It required a judge, before he found a particular event occurred, to be satisfied on the evidence that it was more likely to have occurred than not.
(1) where the cause of a past event is in issue and two or more competing causes are advanced the burden of proving his case on causation remains on the claimant throughout, and though the defendant can advance a competing cause there is no obligation on him to prove this case.
(2) Even after a prolonged enquiry with a mass of expert evidence, it is open to the courts to conclude that causation remains in doubt and the result will be that the claimant has failed to discharge the burden of proof.
(3) Therefore the effect of this decision is that where the court considers one theory as improbable but also rules out all other theories the court should not treat the improbable theory as the likely cause of the event.
Lord Brandon of Oakbrook said: ‘the appeal does not raise any question of law, except possibly the question what is meant by proof of a case ‘on a balance of probabilities’. Nor do underwriters challenge . . any of the primary findings of fact made by Bingham J. The question, and the sole question, which your Lordships have to decide is whether on the basis of those primary findings of fact, Bingham J and the Court of Appeal were justified in drawing the inference that the ship was, on the balance of probabilities, lost by perils of the sea.
In approaching this question it is important that two matters should be borne constantly in mind. The first matter is that the burden of proving, on a balance of probabilities, that the ship was lost by perils of the seas is and remains throughout on the shipowners. Although it is open to the underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they chose to do so, there is no obligation on them to prove, even on a balance of probabilities, the truth of their alternative case.
The second matter is that it is always open to a court, even after the kind of prolonged inquiry with a mass of expert evidence which took place in this case, to conclude, at the end of the day, that the proximate cause of the ship’s loss, even on a balance of probabilities, remains in doubt, with the consequence that the shipowners have failed to discharge the burden of proof which lay on them.’
As to the Sherlock Holmes fallacy that ‘once you have eliminated the impossible, whatever remains, however improbable, is the truth ‘: ‘In my view there are three reasons why it is inappropriate to apply the dictum of Mr. Sherlock Holmes, to which I have just referred, to the process of fact-finding which a Judge of first instance has to perform at the conclusion of a case of the kind here concerned.
The first reason is one which I have already sought to emphasize as being of great importance, namely, that the Judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course for him to take.
The second reason is that the dictum can only apply when all relevant facts are known, so that all possible explanations, except a single extremely improbable one, can properly be eliminated.
The third reason is that the legal concept of proof of a case on a balance of probabilities must be applied with common sense. It requires a judge of first instance, before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not. If such a Judge concludes, on a whole series of cogent grounds, that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not, does not accord with common sense. This is especially so when it is open to the Judge to say simply that the evidence leaves him in doubt whether the event occurred or not, and that the party on whom the burden of proving that the event occurred lies has therefore failed to discharge such burden.
In my opinion Bingham J adopted an erroneous approach to this case by regarding himself as compelled to choose between two theories, both of which he regarded as extremely improbable, or one of which he regarded as extremely improbable and the other of which he regarded as virtually impossible. He should have borne in mind, and considered carefully in his judgment, the third alternative which was open to him, namely, that the evidence left him in doubt as to the cause of the aperture in the ship’s hull, and that, in these circumstances, the shipowners had failed to discharge the burden of proof which was on them.’
Lord Brandon of Oakbrook
[1985] 2 All ER 712, [1985] 1 WLR 948, [1985] 2 Lloyds Rep 1, [1985] UKHL 15
Bailii
England and Wales
Citing:
At First Instance – The Popi M; Rhesa Shipping Co SA v Edmonds 1983
The parties disputed the cause of the loss of a ship. The experts suggested different but improbably explanations; each supported as the most likely explanation only because any other hypothesis was regarded as almost (if not altogether) impossible. . .
Approved – La Compania Martiartu v Royal Exchange Assurance Corporation CA 1923
The court found, on limited evidence, that the ship in respect of which her owners had claimed for a total loss of perils by sea, had in fact been scuttled with the connivance of those owners.
Scrutton LJ said: ‘This view renders it . .
Cited by:
Cited – Gibbs and others v Rea PC 29-Jan-1998
(Cayman Islands) The respondent worked for a bank. He disclosed a business interest, but that interest grew in importance to the point where he resigned in circumstances amounting to constructive dismissal. His home and business officers were raided . .
Cited – Moiz Ahmed Siddiqui, Ishrat Siddiqui/Bhajan Singh Sohanpal v Council of the London Borough of Hillingdon TCC 15-Apr-2003
The claimants sought damages for cracks in their house caused by the roots of trees on the defendant’s land.
Held: The claimants had failed to establish by evidence that the tree roots were the cause of the damage. The claim failed. . .
Cited – UCB Group Ltd v Hedworth CA 4-Dec-2003
The defendant challenged the claimant’s right to possession under a legal charge. She appealed a finding that she had not established the undue influence of her husband, a solicitor.
Held: A lender who received a voidable security was entitled . .
Cited – Exel Logistics Ltd v Curran and others CA 30-Sep-2004
The claimants sought damages for personal injuries after a crash in a Land Rover maintained by the defendants. The defendants appealed findings of negligence in failing properly to inflate the rear tyres, in continuing despite the danger, and poor . .
Cited – Stephens and Another v Cannon and Another CA 14-Mar-2005
The claimants had purchased land from the defendants. The contract was conditional on a development which did not take place. The master had been presented with very different valuations of the property.
Held: The master was not entitled to . .
Cited – Flannery and Another v Halifax Estate Agencies Ltd, Trading As Colleys Professional Services CA 18-Feb-1999
A judge at first instance taking a view on an expert’s report should give reasons in his judgment for that view. On appeal, where no reasons had been given, he should be asked to provide reasons by affidavit for the appeal. An inadequately reasoned . .
Cited – McTear v Imperial Tobacco Ltd OHCS 31-May-2005
The pursuer sought damages after her husband’s death from lung cancer. She said that the defenders were negligent in having continued to sell him cigarettes knowing that they would cause this.
Held: The action failed. The plaintiff had not . .
Cited – Carisbrooke Shipping Cv5 v Bird Port Ltd ComC 13-Sep-2005
. .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
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 . .
Cited – Hill Street Services Company Ltd v National Westminster Bank Plc and Burjor Mistry ChD 19-Oct-2007
The claimant company said that the bank had allowed money to be removed from its account without authority. Originally it said the second defendant, its former director had authrised the payments. On the second defendant denying this, the company . .
Explained – Ide v ATB Sales Ltd and Another CA 28-Apr-2008
Each appellant challenged how the judge had decided between alternative proofs of causation of the respective loss. In Ide, the claimant asserted a fault in a cycle handlebar, and in Lexus, the claimant asserted that it caught fire whilst . .
Cited – Fosse Motor Engineers Ltd and others v Conde Nast and National Magazine Distributors Ltd and Another TCC 20-Aug-2008
The claimant said that the defendant’s employees had negligently started a fire which burned down the claimant’s warehouse. There was limited evidence to establish the cause.
Held: The claim failed. The scientific evidence did not point to any . .
Cited – Piper v Hales QBD 18-Jan-2013
The claimant owned a very vauable vintage Porsche racing car. It was hired to the defendant. The car suffered severe mechanical damage whilst being driven, and the insurers declined liability.
Held: The Defendant as hirer was under an . .
Cited – Nulty and Others v Milton Keynes Borough Council CA 24-Jan-2013
There had been two fires at a depot owned by the claimants. The fires were found to have been likely to have been caused by the deceased employee. His insurers had repudiated liability saying that the had not been notified oin a timely fashion.
Cited – Milton Keynes Borough Council v Nulty and Others TCC 3-Nov-2011
There had been two fires at depots owned by the claimants. They brought proceedings against an employee, but his insurers repudiated liability saying that they had not been promptly notfied of the claim.
Held: The first fire was caused either . .
Cited – Love v Halfords Ltd QBD 8-Apr-2014
The claimant had purchased a new bicycle from the defendants who also maintained it. Several months later, the steerer tube broke causing an accident and severe injury. The cycle had been finally assembled by the defendant after importation, but . .
Cited – The Worshipful Company of Grocers v Keltbray Group Holdings Ltd and Another QBD 19-May-2016
Allegation that a collapse in a nearby building caused a water leak in the claimant’s nearby building.
Held: the effects of the collapse did not cause the major cracking at Grocers’ Hall which was reported on following the flood. The Grocers . .
Lists of cited by and citing cases may be incomplete.
Evidence, Damages, Insurance, Evidence
Leading Case
Updated: 02 November 2021; Ref: scu.184697
An insurance company had engaged a main contractor to handle repairs to houses insured under its policies. The contractor had engaged the claimant subcontractor to carry out the works at the defendants’ homes, but then went into insolvent liquidation before the works were paid for. The claimant now sought payment direct from the insured. The defendants denied any contract with the claimant, despite mandates signed by them.
Held: The claims failed. It was both a perfectly possible reading of the mandate and far more consonant with the commercial common sense of the situation to interpret it to mean that, although the insurer will be responsible for paying the cost of the insured losses, the householder will remain liable for all other costs, namely the policy excess and any works not covered by the insurance.
The court considered the possible application of the contra preferentem rule: ‘The fact that the contra proferentem rule is a matter of common law whereas regulation 7 (2) is a creature of statute is no reason to differentiate between their applications; the 1999 Regulations give wholesale effect to a European Directive and it is unnecessary to suppose that they were intended to affect the common law relating to contractual interpretation. The occasions on which the principle of construction and the common-law rule apply are the same: their operation is limited to cases of genuine interpretative doubt or ambiguity’
The contracts were to be determined on the standard rules for construction. If the terms were unambiguous then the 1999 Regulation had no application, and ‘ it is impermissible to prejudge the construction of the mandates by presupposing an analysis that ignores them. The mandates were in fact signed. A common reason for having written express contracts is to impose and assume liabilities that would not otherwise be implied.’
Keyser QC J
[2013] EWHC 484 (QB)
Bailii
Unfair Terms in Consumer Contracts Regulations 1999 7
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 . .
Cited – Chartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Cited – St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No.2) CA 1973
When looking at a contract ‘one must construe the document according to the natural meaning of the words contained in the document as a whole, read in the light of surrounding circumstances.’
The contra preferetem rule can only come into play . .
Cited – Mira Oil Resources of Tortola v Bocimar NV ChD 1999
Colman J discussed the application of the contra preferentem rule: ‘Further, this is not a case where the meaning of the words is so finely balanced that the contra proferentum rule should be applied in favour of the owners. If in the view of the . .
Cited – Association of British Travel Agents Ltd v British Airways Plc CA 2000
Sedley LJ described the common-law rule of contra preferentem, that any doubt as to the meaning of contractual words will be resolved by construing them against the party that put them forward, as ‘a principle not only of law but of justice’ and . .
Approved – The Financial Services Authority v Asset L I Inc and Others ChD 8-Feb-2013
The court was asked whether so-called ‘land-banking’ schemes were ‘collective investments schemes’ within section 235.
Held: Andrew Smith J discussed the difference in effect between the contra preferentem rule, and regulation 7 of the 1999 . .
Cited – Rainy Sky Sa and Others v Kookmin Bank SC 2-Nov-2011
Commercial Sense Used to Interpret Contract
The Court was asked as to the role of commercial good sense in the construction of a term in a contract which was open to alternative interpretations.
Held: The appeal succeeded. In such a case the court should adopt the more, rather than the . .
Cited – Pink Floyd Music Ltd and Another v EMI Records Ltd CA 14-Dec-2010
The defendant appealed against an order made on the claimant’s assertion that there were due to it substantial underpayments of royalties over many years. The issues were as to the construction of licensing agreements particularly in the context of . .
Cited – Direct Travel Insurance v McGeown CA 12-Nov-2003
The contra proferentem interpretation rule is to be invoked only in cases of genuine doubt or ambiguity. Auld LJ said: ‘A court should be wary of starting its analysis by finding an ambiguity by reference to the words in question looked at on their . .
Cited – Du Plessis v Fontgary Leisure Parks Ltd CA 2-Apr-2012
The claimant, who owned a holiday mobile home on the respondent’s site challenged the raising of site fees, saying that the contract was unfair. Previously all site fees were equal within the site, but the respondent had introduced a scheme which . .
Cited – Brown and Davis Ltd v Galbraith CA 1972
The defendant’s car was damaged in a collision. It was taken to the plaintiff’s garage for repair. The defendant’s insurers contracted with the defendant to pay for the repairs for a specified amount. The plaintiff carried out repair work, and the . .
Cited – Curtis v Chemical Cleaning and Dyeing Co CA 1951
The defendant sought to rely on an exemption clause in its garment cleaning contract. The defendant’ shop assistant had said that it extended only to damage to beads and sequins, whereas by its terms it covered all liability for damage to articles . .
Cited – Amalgamated Investment and Property Co Ltd (in Liq) v Texas Commerce International Bank Ltd CA 1982
The court explained the nature of an estoppel by convention.
Lord Denning MR said: ‘The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone . .
Cited – Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd CA 6-Apr-2006
Moore-Bick LJ discussed whether the court should give effect to a non-reliance clause in a contract saying: ‘It is common to include in certain kinds of contracts an express acknowledgement by each of the parties that they have not been induced to . .
Lists of cited by and citing cases may be incomplete.
Contract, Insurance, Consumer
Leading Case
Updated: 02 November 2021; Ref: scu.471743
The Insurance company provided endowment insurance polices. They disagreed with the Commissioners as to whether these were policies of insurance and thus as to how they fell to be stamped. Life insurance was defined in the 1891 Act as ‘insurance upon any life or lives or upon any event or contingency relating to or depending upon any life or lives.’ The instrument that was to be presented for stamping in that case was the policy of insurance and ‘Policy of insurance’ was defined to mean ‘every writing whereby any contract of insurance is made’.
Held: Channell J defined a contract of insurance: ‘It seems to me that for the purpose of determining whether that contract comes within the definition [of life insurance] we must look at it as a whole, and not split it up into two separate parts . . Whereby for some consideration, usually but not necessarily for periodical payments called premiums, you secure for yourself some benefit, usually but not necessarily the payment of a sum of money, upon the happening of some event . . A contract of insurance, then, must be a contract for the payment of a sum of money, or for some corresponding benefit such as the rebuilding of a house or the repairing of a ship, to become due on the happening of an event, which event must have some amount of uncertainty about it, and must be of a character more or less adverse to the interest of the person effecting the insurance.’
Channell J
[1904] 2 KB 658
Stamp Act 1891
England and Wales
Cited by:
Cited – Department of Trade and Industry v St Christopher Motorists Association Ltd 1974
The defendant company provided for the hire of a chauffeur if the insured was disqualified from driving.
Held: Contracts of insurance are not confined to contracts for the payment of money, but may include a contract for some benefit . .
Cited – Digital Satellite Warranty Cover Ltd v The Financial Services Authority CA 29-Nov-2011
Parties appealed against on order for the winding up of the company. The Authority (FSA) had said that the company which supplied warranties to owners of digital receiver boxes were providing regulated insurance services, but that the companies were . .
Cited – Digital Satellite Warranty Cover Ltd and Another v Financial Services Authority SC 13-Feb-2013
The appellants challenged an order for the dissolution of their company under the 2000 Acts. They had provided warranties for assorted consumer electrical goods which amounted to insurance, but said that they were not required to be registered under . .
Lists of cited by and citing cases may be incomplete.
Insurance, Stamp Duty
Leading Case
Updated: 01 November 2021; Ref: scu.471980
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 companies and as to whether the compensation under the Acts counted as damages under the policies. The syndicate said that damages are quintessentially sums which fall to be paid by reason of some breach of duty or obligation.
Held: The question for consideration is what the document would convey to a reasonable person having all the background knowledge which would have reasonably been available to the parties at the time of the contract. There was no clear evidence that the parties had considered the detailed provisions carefully, but was rather a collection of standard clauses. There was no reason to think that the purpose of the Underlying Policy was anything other than the protection of the police fund against claims by third parties for personal injury or damage to property. The claimant was entitled to be indemnified by the defendant pursuant to the Excess Policy in respect of any liability of the claimant to pay compensation under the 1886 Act.
Walker J
[2008] EWHC 1375 (Comm), [2009] Lloyd’s Rep IR 39, [2009] 2 All ER (Comm) 200
Bailii
Police Act 1996, Riot (Damages) Act 1886
England and Wales
Citing:
Cited – Re Hooley Hill Rubber and Royal Insurance Co CA 1920
When interprting a contract, it is assumed that the draftsman works with a view to certainty of sense and standardisation of terms. Bankes LJ said: ‘Courts should be chary in interfering with the interpretation given to a well-known document and . .
Cited – Toomey v Eagle Star Insurance Co Ltd CA 1994
The word ‘reinsurance’ is often used loosely simply to describe any contract of insurance which is placed by or for the benefit of an insurer, but it should be construed more properly to require the insurance of an insurable interest in the subject . .
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 . .
Cited – Sunport Shipping Limited, Prometheus Maritime Corporation, Celestial Maritime Corporation, Surzur Overseas Limited v Tryg-Baltica International (UK) Ltd (Formerly Know As Colonia Baltica Insurance Ltd) and others CA 24-Jan-2003
(The ‘Kleovoulos of Rhodes’) A large quantity of cocaine was discovered by divers behind a grille in a sea chest at the vessel’s discharge port, Aliveri – having been placed there by unknown third persons at the load port in Colombia, South America. . .
Cited – Yorkshire Water Services Ltd v Sun Alliance and London Insurance Plc and Others (1) CA 20-Aug-1996
The court was asked whether the costs of flood alleviation works were recoverable under public liability insurance policies.
Held: A claim for the costs of remedial action taken to mitigate future losses were not covered by the terms of the . .
Cited – F and K Jabbour v Custodian of Israeli Absentee Property 1953
The court was asked as to the effect of foreign regulations on the ownership of a right of action under an insurance policy, and for that purpose examined whether the plaintiff’s claim against the insurance company was a ‘mere right to claim . .
Cited – Hall Brothers Steamship Company Limited v Young CA 1939
The shipowners appealed a decision that the underwriters were not liable under collision liability clause. Their ship had collided with another at Dunkirk when the steering gear failed. Under french law the pilot was not liable since he had not been . .
Cited – Tesco Stores Ltd v Constable and others CA 16-Apr-2008
Tesco voluntarily agreed to indemnify a third party for economic loss. When that third party claimed under the indemnity for economic losses arising out of damage to property of another, Tesco sought to claim under its own public liability insurance . .
Cited – Tioxide Europe Ltd v CGU International Plc and others CA 20-Jul-2005
The court considered how an insurance contract should be construed. Langley J said: ‘The general principle is that the proper construction is to be determined by the ordinary and natural meaning of the words used in the contractual and commercial . .
Cited – Charterhouse Development (France) Limited v Sharp ChD 1998
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 . .
Cited – Lancashire County Council v Municipal Mutual Insurance Ltd CA 3-Apr-1996
The defendant agreed to indemnify the insured ‘in respect of all sums which the insured shall become legally liable to pay as compensation arising out of’ various matters including wrongful arrest, malicious prosecution and false imprisonment. The . .
Mentioned – Rylands v Fletcher HL 1868
The defendant had constructed a reservoir to supply water to his mill. Water escaped into nearby disused mineshafts, and in turn flooded the plaintiff’s mine. The defendant appealed a finding that he was liable in damages.
Held: The defendant . .
Cited – Charter Reinsurance Co Ltd v Fagan and Others HL 24-May-1996
The re-insurers appealed against a finding that they were liable to make payment under a contract which required them to pay ‘sums actually paid.’ They said that the company having become insolvent, no payment would in fact be made.
Held: The . .
Cited – J W Dwyer Ltd v Metropolitan Police District Receiver 1967
The owner of a jewellery shop claimed to recover compensation from the police for damage to his shop in a smash and grab raid. Since there were more than 3 robbers, the police accepted that there had been a riot but defended the claim on the basis . .
Cited – DH Edmonds Ltd v East Sussex Police Authority CA 6-Jul-1988
The plaintiffs Brighton jewellers sought compensation from the police authority for a raid on their premises by three or four men. Kenneth Jones J at first instance held that the incident did not involve a tumultuous assembly and accordingly the . .
Cited – Ford v Receiver for the Metropolitan Police District 1921
Bailhache J considered a claim under the 1886 Act: ‘There must be judgment for the plaintiff, and the question of the quantum of damages must be referred.’ . .
Cited – Kaufmann Brothers v Liverpool Corporation KBD 1916
It was argued that a claim under the 1886 Act was a claim for ‘alleged neglect or default’ within the meaning of the 1893 Act, so that the claim was time-barred under that Act.
Held: The argument failed. The 1893 Act did not apply.
Lush J . .
Cited – Pitchers v Surrey County Council 1923
In 1919 there was a riot involving Canadian soldiers from a local Camp. They released fellow soldiers in custody and raided the officers’ mess, and damaged and stole the contents of a tailor’s shop and other shops known as ‘Tin Town’ – a group of . .
Cited – Bearmans Ltd v Metropolitan Police District Receiver CA 1961
Sellers LJ said: ‘The second plaintiffs had paid some andpound;5,000 for that theft; and for their respective losses these plaintiffs sought to recover damages under the Riot (Damages) Act, 1886’
The court considered that a liberal approach . .
Cited – Bartoline Limited v Royal Sun Alliance plc 2007
The claimant sought an indemnity under the Public Liability Section of a Combined Policy for: (i) expense incurred by the Environment Agency under section 161 of the Water Resources Act 1991 cleaning up water courses of pollutants after a fire on . .
Cited – Scott (for and Behalf of All Underwriting Members of Syndicates 401 and 857 at Lloyd’s) v The Copenhagen Reinsurance Company (UK) Ltd CA 16-May-2003
Where an insurance policy required damage to have been caused by an insured risk, the causative link had to be a significant rather than a weak one.
Determining whether transactions are related is therefore an acutely fact sensitive exercise, . .
Cited by:
See Also – Yarl’s Wood Immigration Ltd and others v Bedfordshire Police Authority ComC 30-Sep-2008
The owners of the Yarslwood Immigration centre sought damages under the 1886 Act after a riot at the centre caused substantial damage.
Held: The claim failed: ‘The fact that YWIL and GSL [the appellants] were acting as public authorities . .
Appeal from – 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 . .
See Also – Yarl’s Wood Immigration Ltd and Others v Bedfordshire Police Authority CA 23-Oct-2009
The claimant sought to recover the costs of damage to their centre following a riot, saying that under the 1886 Act, they were liable. It appealed against a ruling that they were unable to claim as a public authority, saying that the 1886 Act was . .
Cited – The Mayor’s Office for Policing and Crime v Mitsui Sumitomo Insurance Co (Europe) Ltd and Others SC 20-Apr-2016
The Court considered the quantification of damages to be awarded to a business suffering under riots under the 1886 Act, and in particular whether such recoverable losses included compensation for consequential losses, including loss of profits and . .
Lists of cited by and citing cases may be incomplete.
Police, Insurance
Updated: 01 November 2021; Ref: scu.270220
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 compensation and not in damages as covered by the insurance policy.
Held: The insured’s appeal failed. Once one appreciates that the reason for the 1886 Act placing the burden of paying compensation to the victims of riot damage on the police authority is that the police are responsible for law and order and that they are (notionally) in breach of that responsibility, it seems to me, as an English lawyer, that compensation payable is a sum which the police authority is ‘liable to pay as damages’.
[2009] EWCA Civ 64
Bailii
Riot (Damages) Act 1886 2
England and Wales
Citing:
Cited – J W Dwyer Ltd v Metropolitan Police District Receiver 1967
The owner of a jewellery shop claimed to recover compensation from the police for damage to his shop in a smash and grab raid. Since there were more than 3 robbers, the police accepted that there had been a riot but defended the claim on the basis . .
Cited – DH Edmonds Ltd v East Sussex Police Authority CA 6-Jul-1988
The plaintiffs Brighton jewellers sought compensation from the police authority for a raid on their premises by three or four men. Kenneth Jones J at first instance held that the incident did not involve a tumultuous assembly and accordingly the . .
Cited – Hall Brothers Steamship Company Limited v Young 1938
The insured vessel, Trident, went to Dunkirk and engaged a French pilot whose pilot boat developed a fault in its steering gear which caused her to collide with Trident without Trident being in any way to blame. French law had a provision that . .
Cited – Hall Brothers Steamship Company Limited v Young CA 1939
The shipowners appealed a decision that the underwriters were not liable under collision liability clause. Their ship had collided with another at Dunkirk when the steering gear failed. Under french law the pilot was not liable since he had not been . .
Cited – Sunport Shipping Limited, Prometheus Maritime Corporation, Celestial Maritime Corporation, Surzur Overseas Limited v Tryg-Baltica International (UK) Ltd (Formerly Know As Colonia Baltica Insurance Ltd) and others CA 24-Jan-2003
(The ‘Kleovoulos of Rhodes’) A large quantity of cocaine was discovered by divers behind a grille in a sea chest at the vessel’s discharge port, Aliveri – having been placed there by unknown third persons at the load port in Colombia, South America. . .
Cited – Charterhouse Development (France) Limited v Sharp ChD 1998
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 . .
Cited – Yorkshire Water Services Ltd v Sun Alliance and London Insurance Plc and Others (1) CA 20-Aug-1996
The court was asked whether the costs of flood alleviation works were recoverable under public liability insurance policies.
Held: A claim for the costs of remedial action taken to mitigate future losses were not covered by the terms of the . .
Cited – Bartoline Limited v Royal Sun Alliance plc 2007
The claimant sought an indemnity under the Public Liability Section of a Combined Policy for: (i) expense incurred by the Environment Agency under section 161 of the Water Resources Act 1991 cleaning up water courses of pollutants after a fire on . .
Appeal from – 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 . .
See Also – Yarl’s Wood Immigration Ltd and others v Bedfordshire Police Authority ComC 30-Sep-2008
The owners of the Yarslwood Immigration centre sought damages under the 1886 Act after a riot at the centre caused substantial damage.
Held: The claim failed: ‘The fact that YWIL and GSL [the appellants] were acting as public authorities . .
Cited by:
See Also – Yarl’s Wood Immigration Ltd and Others v Bedfordshire Police Authority CA 23-Oct-2009
The claimant sought to recover the costs of damage to their centre following a riot, saying that under the 1886 Act, they were liable. It appealed against a ruling that they were unable to claim as a public authority, saying that the 1886 Act was . .
Lists of cited by and citing cases may be incomplete.
Police, Insurance
Updated: 01 November 2021; Ref: scu.282613
Two insurance companies were liable to contribute equally to an amount payable to a third party. The doctrine of contribution could be modified by contract and the matter should be considered by reference to the parties’ contractual liabilities.
Lord Woolf
Times 09-Jun-1993, [1994] 1 AC 130, [1993] UKPC 22
Bailii
Citing:
Not Followed – Legal and General Assurance Society Ltd v Drake Insurance Co Ltd CA 15-Jan-1991
An insurance company, having paid under the policy to a doubly insured party, sought contribution from the second insurer, who had not been notified of the claim by the insured. The claim for a contribution was one in equity, but since the company . .
Cited by:
Cited – Bolton Metropolitan Borough Council v Municipal Mutual Insurance Ltd CA 6-Feb-2006
The deceased had come into contact with asbestos when working on building sites for more than one contractor. The claimant here sought contribution from the defendants for the damages it had paid to his estate. The issue was as to liability on . .
Cited – The National Farmers Union Mutual Insurance Society Ltd v HSBC Insurance (UK) Ltd ComC 19-Apr-2010
Gavin Kealey QC DHCJ set out the concept of double insurance: ‘Double insurance arises where the same party is insured with two (or more) insurers in respect of the same interest on the same subject-matter against the same risks. If a loss by a . .
Cited – Zurich Insurance Plc UK Branch v International Energy Group Ltd SC 20-May-2015
A claim had been made for mesothelioma following exposure to asbestos, but the claim arose in Guernsey. Acknowledging the acute difficultis particular to the evidence in such cases, the House of Lords, in Fairchild. had introduced the Special Rule . .
Lists of cited by and citing cases may be incomplete.
Updated: 15 October 2021; Ref: scu.80208
Charges on income are not first to be deducted before computing relevant profits of a company carrying on life assurance business under the Act. This allows such companies to set such charges against the balance of profits chargeable to corporation tax at the full rate, and not merely at the rate set for the policy holders’ share.
Times 24-Jul-1999
Finance Act 1989 88(3)
England and Wales
Cited by:
See Also – Bibby (Inspector of Taxes) v Prudential Assurance Co Ltd; Oakes (Inspector of Taxes) v Equitable Life Assurance Society ChD 17-May-2000
A life insurance company which sold its ‘own purchase shares’ was not prevented by the section from reclaiming the tax credits on associated income distributions. . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.85068
Insurers are liable to undisclosed principals on an indemnity policy, provided it was made with the range of their authority. The claim arose out of the death of two seamen on their employers’ vessel but the employers were not named in the relevant policy.
Lord Lloyd said: ‘There are two reasons why their Lordships prefer the decision in Mark Rowlands . . In the first place the words ‘event or events’ in section 2, while apt to describe the loss of the vessel are hardly apt to describe . . liability arising under the common law, as a consequence of the loss of the vessel. Secondly, section 2 must take colour from the short title and preamble to Section 1. By no stretch of the imagination could indemnity insurance be described as a ‘mischievous kind of gaming’. Their Lordships are entitled to give section 2 a meaning which corresponds with the obvious legislative intent.’
Lord Lloyd of Berwick said: ‘For present purposes the law can be summarised shortly. (1) An undisclosed principal may sue and be sued on a contract made by an agent on his behalf, acting within the scope of his actual authority. (2) In entering into the contract, the agent must intend to act on the principal’s behalf. (3) The agent of an undisclosed principal may also sue and be sued on the contract. (4) Any defence which the third party may have against the agent is available against his principal. (5) The terms of the contract may, expressly or by implication, exclude the principal’s right to sue, and his liability to be sued. The contact itself, or the circumstances surrounding the contract, may show that the agent is the true and only principal.’
Lord Lloyd
Gazette 02-Feb-1994, Times 16-Dec-1993, [1994] 2 AC 199, [1994] 1 All ER 213, [1994] 2 WLR 370
Insurance Act 1774 2
Commonwealth
Citing:
Applied – Mark Rowlands v Berni Inns Ltd CA 1985
The plaintiff owned the freehold and had let the basement to the defendant. The plaintiff insured the building. The defendant covenanted to pay to the plaintiff an insurance rent equal to the proportionate cost of insuring the part of the building . .
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 – Banca Nazionale Del Lavoro Spa v Playboy Club London Ltd and Others SC 26-Jul-2018
The Playboy casino required a reference for a customer, but asked for this through a third party. The bank was not aware of the agency but gave a good reference for a customer who had never deposited any money with them and nor to whom it had issued . .
Lists of cited by and citing cases may be incomplete.
Updated: 11 August 2021; Ref: scu.89287
Beatson J
[2008] EWHC 843 (Comm), [2008] Lloyd’s Rep IR 643
Bailii
England and Wales
Cited by:
Appeal from – Temple Legal Protection Ltd v QBE Insurance (Europe) Ltd CA 6-Apr-2009
‘In the present case the binder gives Temple certain valuable rights, including a right in Section 27.1 to ‘retain’ commission out of premiums, but they do not include any rights of a security or proprietary nature to which the authority can be . .
Lists of cited by and citing cases may be incomplete.
Updated: 10 August 2021; Ref: scu.267064
The appellant challenged an order saying that a reinsurer to whom an unfair presentation of the risk was made had failed to establish that he would have declined the risk if a fair presentation had been made to him by the reinsured.
Arden, Lewison, Christopher Clarke LJJ
[2017] EWCA Civ 96
Bailii
England and Wales
Updated: 29 July 2021; Ref: scu.577493
The Court was asked whether the claimant reinsurer (‘Axa’) is entitled to avoid two reinsurance treaties entered into with the defendant reinsured (‘Arig’) and to recover in consequence the net sum of about US $5.15 million paid to Arig under those two treaties.
Males J
[2015] EWHC 1939 (Comm)
Bailii
England and Wales
Updated: 29 July 2021; Ref: scu.550067
The vessel had been taken by the authorities in Venezuela after drugs were found to have been attached to its hull by third parties. Six months later it was declared a constructive total loss. The ship owners now sought recovery of its value from the insurers. The Court of Appeal had rejected the claim allowing the insurers to rely on an exclusion in the clauses relating to malicious acts by a third party.
Held: The ship-owners’ appeal failed. The acts complained of were not aimed at the owners, but at the ship, and that was the essential of the exclusion. ‘clause 1.5 is not apt to cover the present circumstances, and . . the premise on which this appeal reaches the Supreme Court is incorrect. ‘
Lord Mance (Deputy President), Lord Sumption, Lord Hughes, Lord Hodge and, Lord Briggs
[2018] UKSC 26, [2018] 2 WLR 1671, [2018] WLR(D) 317, [2018] 2 All ER (Comm) 671, [2019] AC 136, [2018] 4 All ER 589, [2018] 2 WLR 1671, [2018] 2 Lloyds Rep 1, [2018] Lloyds Rep IR 448
Bailii, Bailii Summary, SC, SC Summary, SC 180320 am Hearing, SC 180320 pm Hearing, SC Summary Video, WLRD
Institute War and Strikes Clauses 1/10/83 with additional perils, cls 1.5, 4.1.5
England and Wales
Citing:
Preliminary Issues ComC – Atlasnavios-Navegacao, Lda v Navigators Insurance Company Ltd and Others ComC 29-Mar-2012
Trial of preliminary issues in an action in which the Claimant claims under its war risks insurance for the constructive total loss of the vessel ‘B Atlantic’ (‘the Vessel’). Between 7 and 12 August 2007 the Vessel loaded a cargo of coal at . .
At ComC – Atlasnavios-Navegacao, LDA v Navigators Insurance Company Ltd and Others ComC 8-Dec-2014
The claimant’s vessel and its crew had been detained after illegal drugs were found to be attached to its hull in port in Venezuela by ship crew members. The ship owners asserted effective total loss.
Held: The owners were entitled to recover . .
At CA – Atlasnavios-Navegacao, Lda v Navigators Insurance Company Ltd and Others CA 1-Aug-2016
(The B Atlantic) The court was asked whether Flaux J was right to find that the owners of a ship were entitled to be indemnified by the insurers in respect of the constructive total loss of the vessel under war insurance after detention ‘by reason . .
Cited – Nishina Trading Co Ltd v Chiyoda Fire and Marine Insurance Co Ltd (The Mandarin Star) CA 1968
The ship owners had not been paid two months of charter hire due to them, so the master took the cargo. The cargo did not belong to the defaulting charterer, however, but rather to an innocent third party. The insurance clause provided that ‘it is . .
Cited – Brough v Whitmore 11-Feb-1791
Provisions sent out in a ship for the use of the crew, are protected by a policy of assurance on the ship and furniture. . .
Cited – Rickards v Forestal Land, Timber and Railways Co Ltd CA 1941
MacKinnon LJ said: ‘There are two massive volumes of Arnould which purport to deal with The Law of Marine Insurance. They now contain over 1800 pages, and the Marine Insurance Act, 1906, is entitled ‘An Act to codify the Law relating to Marine . .
Cited – Panamanian Oriental Steamship Corpn v Wright (The ‘Anita’) 1970
. .
Cited – Panamanian Oriental Steamship Corporation v Wright (The Anita) CA 1971
The burden is on Underwriters to bring themselves within an exclusion clause they seek to rely on.
Lord Denning distinguished between what might be described as justified or ‘connected’ political interference on the one hand and unjustified or . .
Cited – Shell International Petroleum Co Ltd v Gibbs (The ‘Salem’) QBD 1981
Conspirators disposed of a cargo of oil dishonestly, in South Africa, in breach of sanctions and with a view to profit. Mustill J. considered whether this loss was caused by persons acting maliciously, that is out of spite or ill-will or the like. . .
Cited – Shell International Petroleum Co Ltd v Gibbs (The ‘Salem’) CA 1982
The conspirators purchased and manned a tanker, The Salem. They chartered her to an innocent charterer, Pontoil SA, for a voyage to Europe carrying a cargo of oil which Pontoil acquired from Kuwait Oil Co in Mina al Ahmadi and agreed to resell to . .
Cited – North Star Shipping Ltd and others v Sphere Drake Insurance Plc and others ComC 22-Apr-2005
. .
Cited – Sunport Shipping Limited, Prometheus Maritime Corporation, Celestial Maritime Corporation, Surzur Overseas Limited v Tryg-Baltica International (UK) Ltd (Formerly Know As Colonia Baltica Insurance Ltd) and others CA 24-Jan-2003
(The ‘Kleovoulos of Rhodes’) A large quantity of cocaine was discovered by divers behind a grille in a sea chest at the vessel’s discharge port, Aliveri – having been placed there by unknown third persons at the load port in Colombia, South America. . .
Cited – Allen v Flood HL 14-Dec-1898
Tort of Malicicious Inducement not Committed
Mr Flood had in the course of his duties as a trade union official told the employers of some ironworkers that the ironworkers would go on strike, unless the employers ceased employing some woodworkers, who the ironworkers believed had worked on . .
Mentioned – Regina v Cunningham CCA 1957
Specific Intention as to Damage Caused
(Court of Criminal Appeal) The defendant wrenched a gas meter from the wall to steal it. Gas escaped. He was charged with unlawfully and maliciously causing a noxious thing, namely coal gas, to be taken by the victim.
Held: Byrne J said: ‘We . .
Cited – Regina v G and R HL 16-Oct-2003
The defendants, young boys, had set fire to paper and thrown the lit papers into a wheelie bin, expecting the fire to go out. In fact substantial damage was caused. The House was asked whether a conviction was proper under the section where the . .
Cited – Cory v Burr HL 30-Apr-1883
In a time policy of marine insurance on ship the ordinary perils insured against (including ‘ barratry of the master ‘) were enumerated, and the ship was warranted ‘free from capture and seizure and the consequences of any attempts thereat.’ In . .
Cited – In re Etherington and the Lancashire and Yorkshire Accident Co CA 8-Feb-1909
By the terms of a policy an accident insurance company undertook, if, at any time during the continuance of the said policy, the insured should sustain any bodily injury caused by violent, accidental, external, and visible means, then, in case such . .
Cited – Zurich Insurance Plc UK Branch v International Energy Group Ltd SC 20-May-2015
A claim had been made for mesothelioma following exposure to asbestos, but the claim arose in Guernsey. Acknowledging the acute difficultis particular to the evidence in such cases, the House of Lords, in Fairchild. had introduced the Special Rule . .
Cited – Royal Greek Government v Minister of Transport (The Ann Stathatos) 1949
The ship had been chartered, but the crew refused to sail without an escort, in war conditions. The charterer sought to be excused liability under a clause making allowance for ‘insufficiency of crew’.
Held: The presumption against surplusage . .
Cited – 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 – Handelsbanken v Dandridge and others CA 30-Apr-2002
The Aliza Glacial
Construction of two standard clauses in the Institute War and Strikes Clauses Hulls-Time, 1983 edition. Potter LJ treated the vessel’s loss, following the owners’ refusal to meet an outrageous ransom demand by a terrorist organisation, as outside . .
Cited – Melinda Holdings Sa v Hellenic Mutual War Risks Association (Bermuda) Ltd ComC 18-Feb-2011
The claimant sought to assert its claim for payment under war risks insurance with the defendant after the insured ship was arrested and detained in Cairo. . .
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.
Updated: 25 July 2021; Ref: scu.616316
[2005] EWHC 665 (Comm), [2005] 2 Lloyd’s Rep 76, [2005] 2 CLC 238
Bailii
England and Wales
Citing:
See Also – North Star Shipping Ltd. and others v Sphere Drake Insurance Plc and others ComC 27-Oct-2004
. .
Cited by:
Appeal from – North Star Shipping Ltd and others v Sphere Drake Insurance Plc and others CA 7-Apr-2006
A claim was made under a marine insurance policy for damage caused to a vessel by an explosion. Underwriters alleged that they were entitled to avoid the policies for (inter alia) non-disclosure of the existence of criminal proceedings in Greece . .
Cited – Navigators Insurance Company Ltd and Others v Atlasnavios-Navegacao Lda SC 22-May-2018
The vessel had been taken by the authorities in Venezuela after drugs were found to have been attached to its hull by third parties. Six months later it was declared a constructive total loss. The ship owners now sought recovery of its value from . .
Lists of cited by and citing cases may be incomplete.
Updated: 25 July 2021; Ref: scu.224563
Claim under two excess global liability policies for indemnity against its liability for the ‘pinking’ of UPVC products manufactured and sold by others which included in their formulation a titanium dioxide pigment supplied by Tioxide. Excess layer insurance policies.
The Honourable Mr Justice Langley
[2004] EWHC 2116 (Comm)
Bailii
England and Wales
Cited by:
Appeal from – Tioxide Europe Ltd v CGU International Plc and others CA 20-Jul-2005
The court considered how an insurance contract should be construed. Langley J said: ‘The general principle is that the proper construction is to be determined by the ordinary and natural meaning of the words used in the contractual and commercial . .
These lists may be incomplete.
Updated: 19 July 2021; Ref: scu.214301
The court considered the relevance of moral hazard for an insurer accepting an insurance proposal: ‘When accepting a risk underwriters are properly influenced not merely by facts which, with hindsight, can be shown to have actually affected the risk but with facts that raise doubts about the risk’.
Phillips J
[1989] 1 LI LR 69
England and Wales
Cited by:
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 . .
These lists may be incomplete.
Updated: 11 July 2021; Ref: scu.245963
NU the insurer of a consequential loss insurance policy, appealed against the decision, on a claim brought by G, the owners of a property under redevelopment, which had suffered a fire as to G’s resultant loss of rental income from the property. The fire destroyed architects’ drawings which were not insured and caused a substantial delay in the development. The issue was whether a proviso contained in G’s policy, that at the time of the damage the claimant must have ‘an insurance covering the interest of the insured in the property at the premises against such damage’ could be construed as giving G an insurable interest in the Architects drawings even though they were not the owners.
Held: The appeal was dismissed. The word ‘interest’ contained in the proviso should be construed in context, depending on the insured’s relation to the damaged property. An insured could recover if he had rights in existence at the time of the loss which were affected by the damage e.g. profits from a forward sale. However, the Architects’ drawings were not property in which he had a personal interest at the time of the fire. They were the property of the Architects, and G were under no obligation to insure themselves against their loss.
Such loses through delay were not recoverable.
Auld LJ said: ‘the nature of the insurable interest in each case must depend on the type of cover in issue’.
Auld LJ, Neill LJ
Ind Summary 22-Jan-1996, Times 12-Jan-1996, [1996] 1 Lloyds Rep 614, [1996] 2 All ER 487
England and Wales
Citing:
Approved – Sharp v Sphere Drake Insurance plc (The Moonacre) 1992
S, a retired businessman, had bought a vessel and insured it in his name, but registered it in the name of company, R. In the winter, the boat was laid up, but occupied by a workman who maintained it and kept it secure. The boat was destroyed by a . .
Cited – Lucena v Craufurd HL 1806
Before the declaration of war, against the United Provinces, His Majesty’s ships took possession of several ships belonging to Dutch East India men, and took them to St Helena. The Commissioners then insured the ships for their journey from St . .
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 . .
These lists may be incomplete.
Updated: 11 July 2021; Ref: scu.80870
Insurance – agreement to limit liability – binding nature – discharge from further liability
Moore-Bick J
Unreported, 29/04/1997
England and Wales
Cited by:
See Also – Sphere Drake Insurance Plc and Another v Orion Insurance Company Plc ComC 11-Feb-1999
ComC Multi-party run-off agreement made in 1975 to govern parties’ contributions towards run-off based on estimates of likely claims- asbestos-related claims led to final liabilities being vastly greater than . .
These lists may be incomplete.
Updated: 11 July 2021; Ref: scu.220773
References: Gazette 15-Jan-1992, [1992] QB 887, [1992] 2 WLR 157
Coram: Lloyd LJ
Ratio: An insurance company, having paid under the policy to a doubly insured party, sought contribution from the second insurer, who had not been notified of the claim by the insured. The claim for a contribution was one in equity, but since the company had paid in excess of their true liability, because of a ‘ratable proportion’ clause, they were not entitled to recover any part of the voluntary payment. The matter should be looked at at the time of the loss before there was any non-compliance with the condition precedent.
Lloyd LJ said: l ‘the principles on which one insurer is entitled to recover from another in a case of double insurance have been settled since Lord Mansfield’s day’.
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Last Update: 18 March 2019
Ref: 83017
References: [1985] 1 Lloyd’s Rep 437
Coram: Hirst J
Ratio: The LITSION PRIDE was insured against war risks. The terms required of her owners, notice as soon as practicable of her entry into specified war zones and then to pay an additional premium. The owners traded her into a war zone without giving notice, dishonestly intending to avoid the payment of the additional premium if the vessel got out unscathed. When she was hit by a missile and sunk, they gave the required notice by a letter which they dishonestly backdated to a date before the vessel entered the war zone. The fraud was irrelevant to the merits of the claim, because the vessel was held to be insured under a held covered clause with or without prior notice.
Held: The claim was forfeit on the ground that it was a breach of the insured’s duty of good faith. His decision has not fared well in subsequent decisions.
Jurisdiction: England and Wales
Last Update: 26-Sep-18
Ref: 623434
References: [1865] EngR 66, (1865) 4 F & F 905, (1865) 176 ER 843
Links: Commonlii
Ratio: A contract of fire insurance being a contract of indemnity, on which the assured is only entitled to recover the value of the property destroyed, and wilful misrepresentation of the value of the property destroyed will-under the usual condition agamst fraudulent claims – defeat and vitiate the whole claim. In an action on a fire insurance policy, containing the usual condition that it should become void in the event of a fraudulent claim the company setting up, in defence, both fraud and arson :-the jury being advlsed by the Judge that, as the case, as to arson, was only one of suspicion, they should decide rather upon the case as to fraud they were also directed, that if they were satisfied that the claim was wilfully faLlse and fraudulent, they should find for the company upon the plea of fraud.
Last Update: 15 August 2018
Ref: 280978
References: [2001] ScotHC 53
Links: Bailii
Ratio:
Statutes: Insurance Companies Act 1982 49
Jurisdiction: Scotland
Last Update: 05-Apr-18
Ref: 166468
References: (1783) 3 Dougl 246, [1783] EngR 109, (1783) 3 Doug 245, (1783) 99 ER 636
Links: Commonlii
Coram: Mansfield L, Butler, Willes, Ashurst, JJ
Ratio: An insurance otlice 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. (Willes and Ashurst, J.J,, dissentient), that the office was not erititled to recover.
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(This list may be incomplete)
Jurisdiction: England and Wales
Last Update: 01-Jan-18
Ref: 191157
References: [2002] EWHC 2601 (Comm), [2003] 1 All ER (Comm) 277, [2003] 1 Lloyd’s Rep 296
Links: Bailii
Coram: Tomlinson J
Ratio: 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 a constructive total loss (‘CTL’). They said the cause of the loss was not the fire, and the loss was uninsured.
Held: Abandonment of the subject-matter insured will take place by operation of law when the underwriters settle the claim. Section 61 is thus satisfied. The insured has been deprived of his right of choice envisaged by Section 61. He has no option but to treat the vessel as a total loss. Section 62(7) says in terms that notice of abandonment is unnecessary where when the insured receives information of the loss there would be no possibility of benefit to the insurer if notice were given to him. The Claimants were entitled to recover as for a CTL.
Statutes: Marine Insurance Act 1906 6162(7) 77(2)
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(This list may be incomplete)
Jurisdiction: England and Wales
Last Update: 19-Nov-17
Ref: 178942
References: [2007] EWHC 1785 (Comm)
Links: Bailii
Coram: Langley J
Ratio: Application for interim injunction to prevent continued sale of after the event insurance policies.
Last Update: 31-Aug-16
Ref: 259319
References: [2011] NSWCA 47
Links: Austlii
Coram: Allsop P, Giles JA, Young JA
Ratio: Austlii (Supreme Court of New South Wales – Court of Appeal) INSURANCE – Double insurance principle – two different insureds entitled to indemnity from two different insurers with respect to separate liabilities for the same injury – contribution between insurers – extended contribution principle in AMP Workers Compensation Services (NSW) Ltd v QBE Insurance Ltd [2001] NSWCA 267; (2001) 53 NSWLR 35 – uncrystallised liability sufficient for purposes of double insurance – second insurer concurred in first insurer indemnifying its insured in the injury – proof of liability of second insurer’s insured – first insurer’s indemnity discharged that liability – second insurer required to share burden of indemnity – sufficient to declare entitlement to contribution
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Last Update: 01-Jul-16
Ref: 566219
References: [2001] NSWCA 267, (2001) 53 NSWLR 35
Links: Austlii
Coram: Mason P, Handley, Beazley JJA
Ratio: Austlii (Supreme Court of New South Wales – Court of Appeal) FACTS
The appeal involved a question of double insurance. The employer held a compulsory third party policy with QBE Insurance Limited in respect of a motor vehicle and a current workers’ compensation policy with AMP Workers’ Compensation Services (NSW) Limited. An employee in the course of his employment was injured by another employee negligently driving in the course of his employment with the same employer.
The first employee commenced proceedings against the second employee but did not seek to join the employer although it would have been vicariously liable. Those proceedings were settled. QBE satisfied the judgment debt as the compulsory third party policy covered the employee as the driver of the vehicle. QBE then claimed contribution from AMP. AMP argued that there was no relevant double insurance because its workers’ compensation policy did not cover the negligent employee who was liable and entitled to indemnity from QBE, and the employer it did insure was never liable and never entitled to indemnity under either policy.
The dispute turned on the relevant date for the purposes of determining the question of double insurance. AMP contended that this had to be determined after the event when the claim for contribution was made. QBE contended that the question must be determined at the date of casualty. In the latter case there would clearly be double insurance in this case.
HELD (per Handley JA, Mason P and Beazley JA agreeing)
(i) The right of contribution only exists in respect of insurances which are contracts of indemnity, where two or more insurers are on risk in respect of the same loss or liability. The right arises when and because one of the insurers has paid more than his proper share of the common demand. Where one insurer has paid in full the indemnity is satisfied and the insured has no right of indemnity against any other insurer. The right of contribution therefore cannot depend on the continued existence of coordinate liabilities for the same demand because the very payment by one which calls the right into existence will have put an end to the liability of the other insurance.
(ii) The judgments in Albion Insurance Co Limited v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342 require the question of double insurance to be determined at the time of the casualty. Although the present question did not arise in Albion Insurance, the focus in both judgments was on the contractual position at the time of the casualty when the loss in the one case, or the liability in the other, accrued.
(iii) There is no reason in precedent or principle why the right of contribution should be defeated by the existence of a second layer of choice available to another party. It should not rest with either of the persons who had available choices to exercise those choices in a way which would leave the ultimate burden on one of the insurers without any right of contribution from the other.
ORDER
Appeal dismissed with costs.
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(This list may be incomplete)
Last Update: 30-Jun-16
Ref: 566218
References: [1758] EngR 138, (1758) 1 Burr 489, (1758) 97 ER 419
Links: Commonlii
Coram: Lord Mansfield
Ratio:The defendant insurers contended that because there had been double insurance they ought only to have to pay half the loss, although neither insurer had as yet paid any sum. They appealed against an order that it pay the whole loss.
Held: The appeal failed. Lord Mansfield said: ‘Before the introduction of wagering policies, it was, upon principles of convenience, very wisely established, that a man should not recover more than he had lost. Insurance was considered as an indemnity only, in case of a loss: and therefore the satisfaction ought not to exceed the loss . . If the insured is to receive but one satisfaction, natural justice says that the several insurers shall all of them contribute pro rata, to satisfy that loss against which they have all insured . . Where a man makes a double insurance of the same thing, in such a manner that he can clearly recover, against several insurers in distinct policies, a double satisfaction, ‘the law certainly says that he ought not to recover doubly for the same loss, but be content with one single satisfaction for it’ . . And if the whole should be recovered from one, he ought to stand in the place of the insured, to receive contribution from the other, who was equally liable to pay the whole.’
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Last Update: 30-Jun-16
Ref: 342439
References: [1969] HCA 55, (1969) 121 CLR 342
Links: Austlii
Coram: Barwick CJ, McTiernan, Kitto, Menzies and Windeyer J.
Ratio:(High Court of Australia) Insurance – Contribution between insurers – Identity of risk insured – Loss covered by two policies – General nature and purpose of policies different – Extent of rights and liabilities created under policies different – Workers’ compensation policy with indemnity extended to include employer’s common law liability – Motor vehicle third party policy covering employer’s liability to employee arising out of use of motor vehicle.
Kitto J said: ‘ ‘a principle applicable at law no less than in equity, is that persons who are under co-ordinate liabilities to make good one loss (eg sureties liable to make good a failure to pay the one debt) must share the burden pro rata’: the object being, as Hamilton J stated in American Surety Co of New York v Wrightson (1910) 103 LT 663: ‘to put people who have commonly guaranteed or commonly insured in the same position as if the principal creditor or the assured had pursued his remedies rateably among them instead of doing as he is entitled to do, exhausting them to suit himself against one or other of them.”
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(This list may be incomplete)
Last Update: 30-Jun-16
Ref: 566217
References: [1987] 2 Lloyd’s Rep 529
Coram: Mr Justice Saville
Ratio:
Statutes: Third Parties (Rights Against Insurers) Act 1930 1(3)
This case is cited by:
(This list may be incomplete)
Last Update: 20-Jun-16
Ref: 223314
References: [2008] EWHC 1671 (Comm)
Links: Bailii
Coram: Beatson J
Application for stay of proceedings to allow an arbitration in Texas.
Last Update: 06-Dec-15 Ref: 271146
References: [2000] 2 Lloyd’s Rep 458, [2000] EWHC 223 (Comm)
Links: Bailii
Coram: Aikens J
A 90 foot motor yacht sank in calm weather in the course of a voyage from Piraeus to Sardinia with a crew of three: a skipper, an engineer and a deckhand.
Held: The owner’s insurance claim failed. There had been a breach of warranty in these terms: ‘Warranted professional skippers and crew in charge at all times.’ The claimants accepted that this was a promissory warranty – there was no argument that it was a term simply delimiting or describing the risk. Aikens J: ‘I accept . . that a practical construction must be given to the words of the warranty. I think it is clear that the insurers were concerned to ensure that the vessel was properly looked after all the time, both winter and summer, and wherever she was – whether cruising or in a marina for the winter months.
The ‘skipper’ together with the ‘crew’ has to be ‘in charge’ of the vessel ‘at all times’. In my view the wording ‘professional skippers and crew to be in charge’ means that the skipper and the crew’ together are to take care of and manage the vessel; that is the sense in which they are to be ‘in charge’ of her. They are also to be ‘in charge’ of the vessel together ‘all the time’. The last phrase is . . quite clear. It means that there must be a professional skipper and a crew that looks after the vessel the whole time, as opposed to intermittently or at intervals.’ As the claimants had not employed anyone who was a ‘professional skipper’ over a period of time, they were in breach of warranty. In summary ‘On the proper construction of the ‘professional skipper warranty’ the claimants were obliged to keep a suitably qualified skipper on board the yacht at all times . . ..’
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Last Update: 25-Oct-15 Ref: 242640
References: [1836] Bing NC 266
Coram: Lord Abinger CB
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.’
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(This list may be incomplete)
Last Update: 19-Oct-15 Ref: 251810
References: (1782) 3 Dougl 61, [1782] EngR 37, (1782) 3 Doug 61, (1782) 99 ER 538
Links: Commonlii
Coram: Lord Mansfield CJ, Buller J
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 with the inhabitants of the hundred, and it did not matter that the insurer had indemnified the insured. Lord Mansfield said: ‘The facts of this case lie in a narrow compass. The argument turns much on want of precision in stating the case, as most arguments do. The office paid without suit, not in ease of the hundred, and not as co-obligors, but without prejudice. It is, to all intents, as if it had not been paid. The question, then, comes to this, can the owner, having insured, sue the hundred? Who is first liable? If the hundred, it makes no difference; if the insurer, then it is a satisfaction, and the hundred is not liable. But the contrary is evident from the nature of the contract of insurance. It is an indemnity. Every day the insurer is put in the place of the insured. In every abandonment it is so. The insurer uses the name of the insured. The case is clear: the Act puts the hundred, for civil purposes, in the place of the trespassers; and, upon principles of policy, as in the case of other remedies against the hundred, I am satisfied that it is to be considered as if the insurers had not paid a farthing.’
Buller J said: ‘The better way is to consider this as a contract of indemnity. The principle is, that the insurer and insured are one, and, in that light, paying before or after can make no difference. I am, therefore, clearly of opinion, that the hundred cannot avail themselves of this defence.’ and ‘It has been admitted, and rightly, that the hundred is put in the place of the trespassers.’
Willes J said: ‘I am of the same opinion . . The hundred is not answerable criminally, but they cannot be considered as free from blame. They may have been negligent, which is partly the principle of the Act.’
Statutes: Riot Act 1714
This case is cited by:
Last Update: 11-Sep-15 Ref: 191156
References: [1692] EngR 46, (1692) 2 Vern 269, (1692) 23 ER 774 (A)
Links: Commonlii
One having no interest in the ship, lends £300 on a bottomry bond, and insures £450 on the ship ; policy decreed to be delivered up. — One having no interest in a ship insures it, the insurance is void, though the policy runs, interest or no interest. But if he is interested in the ship, he may insure more than the value of his interest. Where one insures a ship, if he would have any benefit of the insurance, he must renounce his interest in the ship.
Last Update: 02-Sep-15 Ref: 393135
References: [1786] EngR 42, (1786) 1 TR 112, (1786) 99 ER 1002
Links: Commonlii
A commission del credere is an absolute engagement to the principal from the broker, and makes him liable in the first instance. A broker with such a commission may set-off, under the general issue, a loss upon a policy happening before a bankruptcy, to an action by the assignees of the bankrupt, for premiums upon various policies under-written by him, and for which he had debited the broker : but such a loss carinot be proved under a riotice of set-off.
References: [1985] 1 Lloyd’s Rep 264
Coram: Mustill J
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 & 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 & 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 & Co. v. Pandorf & 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 & 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. & 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 & 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.’
Statutes: Marine Insurance Act 1906 55(1)
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References: [2007] EWHC 2699 (Comm)
Links: Bailii
Coram: Gloster J
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References: [2005] EWHC 454 (Comm)
Links: Bailii
Coram: Mr Justice Colman
Appeal against anti-suit order. The court ordered that since the question of whether an anti-suit injunction could be made to restrain proceedings abroad had been decided in Through Transport, that issue could go straight to the House of Lords.
Statutes: EC Regulation 44/2001, Administration of Justice Act 1969 12, Supreme Court Act 1981 37(1)
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References: , [1838] EngR 915, (1838) 5 Bing NC 58, (1838) 132 ER 1026
Links: Commonlii
The court considered the extent of a duty of care which might be owed by an agent.
Bosanquet J. said: ‘The jury were warranted in concluding, that if the Defendants were to effect an insurance upon the terms in question, they undertook to give notice in case of failure: that undertaking arises out of the nature of the case, and the relation in which the parties stood to each other: and according to the principle laid down in Smith v. Lascelles if a merchant is led, from previous transactions, to expect that his correspondent will effect an insurance, he has a right to rely on his discharging that duty, unless he receives a letter to the contrary.
Whether that expectation arises from previous dealings, or from an undertaking to insure in the particular instance, can make no difference; and Buller J. says, ‘Where the merchant abroad has no effects in the hands of his correspondent, yet, if the course of dealing between them be such that the one has been used to send orders for insurance, and the other to comply with them, the former has a right to expect that his orders for insurance will be obeyed, unless the latter give him notice to discontinue that course of dealing.”
References: [1919] 2 KB 670
Coram: Bailhache J
(Year?) The steamship was insured under a time policy against perils of the sea and stranding, and under further insurance against risks excluded under the first, particularly risks of hostile action. It was in a convoy of four ships zig zagging in the dark under the command of a naval officer to avoid possible torpedos. The court considered whether a merchant ship had been acting when in convoy as a military vessel: ‘sailing in convoy on a chosen route and taking precautionary measures [zig-zagging] necessary because of the presence of hostile submarines had led to the vessel being stranded. It was subsequently torpedoed’.
Held: There was no negligence on the part of the ship’s master or of the naval officer. The loss was not he proximate consequence of warlike operations, and responsibilty fell on the insurers, and not the King.
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Last Update: 19-Jan-16 Ref: 237696
References: (1989) 210 Cal App 3d 108
Links: Justia
Coram: Woods (Fred), J, Lillie, P J., and Johnson, J
California Court of Appeals
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References: Times 12-Jan-99, Gazette 10-Feb-99
A claim for an indemnity under a contract of insurance though in respect of personal injuries was not itself an action for damages for personal injuries and so no order could be made for pre-action discovery.
Statutes: Supreme Court Act 1981 33(2)