A clerk employed by a firm of accountants defrauded two of the firm’s clients of andpound;20,000 over a period of about three years.
Held: One can not ‘pay’ a cause of action.
Devlin J said: ‘I think that the primary meaning of the word ‘claim’ – whether used in a popular sense or in a strict legal sense – is such as to attach it to the object that is claimed; and is not the same thing as the cause of action by which the claim may be supported or as the grounds on which it may be based.’
and ‘If you say of a claim against a defendant that it is for ,100, you have said all that is necessary to identify it as a claim; but if you say of it that it is for fraud or negligence, you have not distinguished it from a charge or allegation. In particular, if you identify a claim as something that has to be paid . . it must be something that is capable of separate payment: you cannot pay a cause of action. It follows, I think, that if there is only one object claimed by one person, then there is only one claim, however many may be the grounds or the causes of action which can be raised in support of it.’
and ‘The assured cannot recover anything under the main indemnity clause or make any claim against the underwriters until they have been found liable and so sustained a loss.’
 1 WLR 45
Cited – Haydon and Others v Lo and Lo (A Firm) and Another PC 23-Jan-1997
(Hong Kong) A claim was made under a professional indemnity policy. The solicitors’ clerk had through a series of frauds embezzled some HK$50m. The insurers said that this was one claim, and that their liability was limited to the maximum under the . .
Approved – Post Office v Norwich Union Fire Insurance Society Ltd CA 1967
A contract of insurance provided an indemnity for ‘all sums which the insured shall become legally liable to pay as compensation in respect of loss of property’. The claim was by the Post Office against a contractor, Potters, for damaging one of . .
Cited – Law Society of England and Wales and others v Shah and others ChD 30-Nov-2007
Solicitor firms had been made bankrupt leaving a shortfall after thefts from client accounts of over 12 million pounds. The thief had diappeared, and the other partners were now discharged form bankruptcy. The Law Society accepted that it could not . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 May 2022; Ref: scu.242424