Legal expenses insurance was purchased by a Miss Nicholson who ran a Natural Health Clinic in Clerkenwell. The insurance was called an ‘Office or Surgery Policy’ and section 7, headed ‘Legal Expenses’, provided that the insurers would pay the insured’s legal costs incurred in relation to claims against her for (inter alia) negligence or for possession of freehold or leasehold property up to andpound;50,000. She instituted proceedings against her landlord for breach of his repairing covenant and he counterclaimed for possession. She instructed Mr Tarbuck as her solicitor; the litigation went against Miss Nicholson in the sense that she was granted relief from forfeiture only on condition that she made certain payments. She failed to make those payments and was made bankrupt on the landlord’s petition, before she paid her solicitor’s bill. The bill came to andpound;69,000 which she was unable to pay and, indeed, unwilling to pay. Mr Tarbuck sought to rely on the 1930 Act because, as he put it, Miss Nicholson had insurance against her liability to pay his fees and she was thus ‘insured against liabilities to third persons which she may incur’. The insurers argued that all that had happened was that Miss Nicholson had voluntarily incurred a liability to pay a contract debt and that was not the sort of liability envisaged by the 1930 Act.
Held: ‘I have to choose between construing the words ‘where a person is insured against liabilities to third parties which he may incur’ as limited to insurance against liabilities which may be imposed on that person by operation of law, whether for breach of contract or in tort, or as including the underwriting of liabilities voluntarily undertaken by that person, i e the payment of contract debts. I do not believe that the words were intended to include the latter.’ He therefore dismissed the claim.
Judges:
Toulson J
Citations:
[2002] QB 571
Statutes:
Third Parties (Rights against Insurers) Act 1930
Jurisdiction:
England and Wales
Cited by:
Not good Law – First National Tricity Finance Ltd v OT Computers Ltd; In re OT Computers Ltd (in administration) CA 25-May-2004
The company had gone into liquidation. They had sold consumer policies as extended warranties on behalf of the claimant. The company had insured its own joint liability under the contracts, and the claimant sought information from the company’s . .
Followed – T and N Limited, Associated Companies of T and N Ltd (In Administration) v Royal and Sun Alliance Plc, and others ChD 9-May-2003
T and N had exposure to asbestosis claims; these claims were insured by Lloyd’s but on terms that if payments were to be made, T and N should make certain reimbursements to Lloyd’s. T and N then insured with a captive company known as Curzon their . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 14 August 2022; Ref: scu.198400