Legal News

Tokio Marine Holdings Inc announced in a statement that it will refuse to honour insurance contracts taken out by firms linked to Lex Greensill and his supply-chain finance group, after a thorough investigation. The Tokyo-headquartered insurer said it had found that Greensill fraudulently misrepresented matters material to underwriting the policies to BCC Trade Credit Pty Ltd, Tokio’s Australian subsidiary, from at least September 2018. In light of those deceitful misrepresentations and fraudulent breaches of an insured’s duty of disclosure, Tokio Marine today notified counterparties that these policies, and related obligations, are void from inception, the company said. Tokio Marine added it will vigorously defend itself against claims brought against it and against BCC, whether brought, lodged, filed or made, over......

Colley v Motor Insurers’ Bureau [2022] EWCA Civ 360 What are the practical implications of this case? In practice, the ruling’s immediate impact is somewhat constrained because section 152(2) of the Road Traffic Act 1988 ( RTA 1988) has been amended, removing an insurer’s ability to sidestep liability under RTA 1988, s 151 on the footing of a later declaration entitling it to avoid the policy. The amendment applies prospectively only, from 1 November 2019, so any claims in respect of accidents occurring before that date will remain subject to the old wording (to which the decision in Colley will directly apply). Even so, the Court of Appeal’s approach to the insurance obligation under Articles 3 and 10 of EU Directive 2009/103 (the ‘ Codified Directive’) has consequences for personal injury road traffic claims going forward. The effect is that there are only very...

Brown v Fisk and others [2021] EWHC 2769 ( QB) What are the practical implications of this case? Master Dagnall’s ruling sits within an established stream of English and Scottish authority. It confirms, consistently with decisions over time at every level up to the Supreme Court, that the expression ‘road or other public place’—used repeatedly in road traffic legislation—cannot sensibly be extended to secure alignment with the Court of Justice ruling in Vnuk. The Master also explores the factors that require consideration, yet acknowledges the difficulty of reconciling the principal authorities with each other. Advisers supporting victims of ‘off‑road’ vehicle accidents, where the existence of insurance cover is uncertain or disputed, may find his detailed review particularly useful. What was the background? The claimant suffered injury after a collision with a Land Rover whilst members of the bonfire society were gathering jumble within a gated and fenced yard off a...

M/ V Pacific Pearl Co Ltd v Osios David Shipping Inc [2021] EWHC 2808 ( Comm) What are the practical implications of this case? The judgment carries significant consequences for P& I Clubs and other insurers, because sanctions create substantial complexity for arranging cover and for delivering benefits, including security for claims. Any association with a sanctioned state increases banks’ risk of non-payment, even where the transaction is neither prohibited nor sanctionable. This mirrors banks’ positions on transfers linked to sanctioned jurisdictions, even where no prohibition applies in the banking system. It is therefore reasonable for P& I Clubs to incorporate sanctions clauses into security documentation that mirror the banks’ stance. In practice, the possibility of non-payment exists regardless of the security obtained—be that a vessel arrest or an LOU—by the recipient. Nevertheless, a recipient presented with P& I Club security...

Representative claim by and on behalf of insurance companies is properly constituted ( Royal & Sun Alliance Insurance plc and others v Textainer Group Holdings Ltd and others) Royal & Sun Alliance Insurance plc and others v Textainer Group Holdings and others [2021] EWHC 2102 ( Comm) What are the practical implications of this case? This decision stands as an unusual authority on CPR 19.3. The rule provides, in substance, that where a claimant pursues relief to which another person is jointly entitled with him, every person sharing that joint entitlement must be joined as a party unless the court directs otherwise. The court adopted a narrow construction, treating the provision as limited to situations involving a joint legal right to the remedy. It does not encompass cases where multiple parties hold several rights to relief and merely share a common interest in the outcome. In that...

Iddon v Warner [2021] Lexis Citation 39 What are the practical implications of this case? There is no definition in the Criminal Justice and Courts Act 2015 ( CJCA 2015) of what amounts to ‘substantial injustice’ in s 57(2). In LOCOG v Sinfield [2018] EWHC 51 ( QB) at [65], Mr Justice Knowles observed that it must denote more than the claimant merely losing damages for those heads not tainted by dishonesty (see also Recorder Hatfield QC in Stanton v Hunter [2017] Lexis Citation 989). A further difficulty for the defendant here was Mrs Iddon’s determination to proceed to trial, clinging to the hope of avoiding her claim’s dismissal. His Honour Judge Sephton QC’s conclusion that a change of position brought about by an interim payment does not, by itself, activate the substantial injustice jurisdiction provides welcome clarity on statutory...

Rockliffe Hall Ltd v Travelers Insurance Company Ltd [2021] EWHC 412 ( Comm) What are the practical implications of this case? The widely reported Supreme Court “test case” on business interruption insurance examined whether policies responded to the COVID‑19 pandemic under various disease clauses, where indemnity was triggered by the incidence or presence of a notifiable disease within a specified radius of the insured’s premises. The Supreme Court concluded that cover would attach where governmental action—such as a nationwide lockdown—was taken in reaction to cases of COVID‑19 that included at least one instance within the policy’s defined area. Consequently, even a solitary local case of COVID‑19 could be treated as the proximate cause of a policyholder’s pandemic losses. Importantly, though, the wordings analysed in the “test case” were tied to “notifiable” disease, thereby bringing COVID‑19 within scope from 5 March 2020, when it was...

The first instance decision has been taken to the Supreme Court by the FCA, all but one of the insurer parties, and the Hiscox Action Group as interveners. The four-day appeal was heard in mid- November 2020. Should the judges be broadly aligned, a ruling may issue before Christmas; otherwise, early 2021 is anticipated. The Supreme Court’s judgment could finally determine how far the representative sample policies respond to coronavirus ( COVID-19) business interruption losses. For policyholders with business interruption cover on other wordings not included in the test case, however, the position may remain less certain. Traditional business interruption policies Policyholders with traditional business interruption insurance—covering loss from damage to insured property—were likely advised that the prospects of coronavirus cover were poor. While coronavirus undoubtedly caused business interruption, it did not do so by causing damage to property. The prevailing view that such...

Re Legal and General Assurance Society Ltd and another company [2020] EWHC 2299 ( Ch), [2020] All ER ( D) 37 ( Sep) What are the practical implications of this case? This ruling is plainly positive for insurers and banks seeking to utilise the Part VII transfer mechanism under the Financial Services and Markets Act 2000 ( FSMA 2000). Notably, the court’s method of distinguishing this transfer from that in Re Prudential Assurance Company Ltd and others [2019] EWHC 2245 ( Ch) is especially helpful, enabling many schemes to progress without companies being overly anxious about contravening the Re Prudential decision. That stance should reassure stakeholders relying on established practice while still acknowledging the court’s vigilance arising from the earlier decision and debate. However, it would be incorrect to claim that the Re Prudential judgment—at least pending the outcome of the intended...

The impasse The standstill in settling coronavirus BI claims has sorely tried policyholders—many being small firms battling the financial shock of lockdown and the pandemic. In places, irritation hardened into anger as policyholders compared experiences and suspected insurers were seeking to argue it both ways. Some with BI extensions triggered by closure on a public authority’s order say they were told their losses were uninsured because they would have arisen anyway from the pandemic, with its fear, lockdown and social distancing. By contrast, others with BI wordings tied to an infectious disease say they were informed their losses were uninsured because they would have occurred anyway due to the government’s direction to shut businesses. One can readily see why policyholders felt aggrieved, not least given the Prime Minister and Chancellor’s statements on 17 March 2020 that insurers would pay companies compelled to close by the...

On 29 April 2020, the Fire Safety Bill received its second reading in the House of Commons and was also referred to a Public Bill Committee. The Bill will amend the Regulatory Reform ( Fire Safety) Order 2005, SI 2005/1541, to provide clearer guidance on the duties of the Responsible Person or duty-holder in multi-occupied, residential premises. Currently, under the Fire Safety Order, fire and rescue authorities hold enforcement powers over the shared parts of blocks of flats, for example entrance halls and landings. They do not possess such powers beyond the front doors of flats to act within individual homes, nor do they also have powers concerning the exterior of buildings. The Fire Safety Bill proposes amendments to the scope of the Fire Safety Order to make clear that the responsible person or duty-holder for multi-occupied residential buildings must manage and reduce fire risk relating to the...

The Lloyd’s Market Association ( LMA) has issued a policy provision for its members, ensuring policyholders’ cover persists past a set renewal date when the Lloyd’s marketplace is unreachable and Emergency Trading Protocol fails. The provision is intended to ensure that......

At Woolwich Crown Court in London, Edward Camborne De Lucy was directed to repay £33,410 to Aviva, together with £6,590 in court costs. On 14 January 2020, the court found him guilty of one count of fraud by false representation and a separate count of making or supplying an article for use in fraud. He also received an 18-month sentence, suspended for 18 months, and was instructed to pay a £114 victim surcharge. The case was brought before the court by the police force’s insurance fraud enforcement department following a complaint from the insurer regarding the case......

The case is UK Acorn Finance Ltd v Markel ( UK) Ltd , case number CL-2018-000236, in the Queen’s Bench Division of the High Court of Justice of England and Wales. By an order made on 1 November 2019, High Court Judge David Waksman required Markel ( UK) Ltd to provide UK Acorn Finance Ltd with copies of policies issued to surveyors undertaking sub-prime work during 2012 to 2014. Markel is also obliged to disclose materials evidencing its decision-making process for underwriting those policies, particulars of any indemnity claims brought by sub-prime lenders, and a witness statement from its DAC Beachcroft lawyer, according to the......

Brown v Metropolitan Police Commissioner and another ( Equality and Human Rights Commission intervening) [2019] EWCA Civ 1724, [2019] All ER ( D) 124 ( Oct) What are the practical implications of the judgment? The meaning of the CPR 44 QOCS regime is now fixed: in mixed claims a trial judge may invoke the discretion in CPR 44.16(2)(b), and the mere presence of a personal injury head will not secure automatic costs protection. Permission to appeal to the Supreme Court was refused. Any further challenge is improbable, as the Court of Appeal—anticipating that prospect—went beyond what was strictly required to dispose of the appeal (see paras [60]–[70]), addressing access to justice, certainty and deterrent effect. A renewed appeal is also unlikely since, given the fact-sensitive, case-by-case nature of the discretion, it is difficult to see how the Court of Appeal’s guidance could be refined or...

Protector Forsikring ASA revealed in a submission to the Oslo Stock Exchange last week that an arbitration tribunal had thrown out its assertion that a reinsurance agreement with Munich Reinsurance Co ought to indemnify certain property losses from the inferno that swept through the high-rise block. The business did not reveal the location of the hearing. It added that no reserves had been earmarked for such a result and that a £6.9m hit would be recognised in the forthcoming financial statements. The tribunal made no order as to legal costs. Protector Forsikring insured the Royal Borough of Kensington and Chelsea, the owner of Grenfell Tower when a fire......

Catlin Syndicate Ltd & Ors v Weyerhaeuser Company [2018] EWHC 3609 ( Comm) What are the practical implications of this case? This judgment confirms that the English court is reluctant to set aside parties’ bargains to arbitrate, even when the arbitration clause is incorporated by reference from the underlying layer and sits uneasily alongside express dispute resolution wording in the policy. The ruling highlights the practical difficulties that arise where layered (re)insurance placements carry inconsistent dispute resolution provisions. Because such layered programmes are standard for major risks, brokers and contracting parties should scrutinise with care not only the dispute resolution language in the layer they subscribe to, but also any such terms imported from policies beneath the layer. What was the background? The claimants and......

Dalamd Ltd v Butterworth Spengler Commercial Ltd [2018] EWHC 2558 ( Comm), [2018] All ER ( D) 37 ( Oct) What was the background to the decision? The insured held a commercial combined policy with Aviva and contractor's all risks cover with XL. As assignee of the policyholder, the claimant sought an indemnity from those insurers following the destruction of the business premises in a 2012 fire. The defendant, an insurance broker, had been engaged to arrange insurance for the site. The insurers declined indemnity on the basis of non‑disclosure and misrepresentation of material facts. The claimant did not contest those declinatures and instead pursued a negligence claim against the broker. What did the court decide? The claimant maintained that the defendant had not properly advised as to the matters then in question......

Prezzo Ltd v High Point Estates Ltd [2018] EWHC 1851 ( TCC) What are the practical implications of the judgment? In Mark Rowlands Ltd v Berni Inns Ltd [1985] 3 All ER 473, the Court of Appeal articulated a general rule: where a landlord is required to insure the building and the tenant contributes to the premium as insurance rent, that cover operates for the tenant's benefit as well. Accordingly, losses caused by an insured risk arising from the tenant's negligence must be met from the insurance proceeds, leaving the landlord with no additional negligence claim against the tenant. In the later decision of Frasca- Judd v Golovina [2016] EWHC 497 ( QB), [2016] All ER ( D) 282 ( Feb), the High Court revisited Berni Inns and held that, even though a short-term residential lease imposed no duty on the tenant to pay...

Advantage Insurance Co Ltd v Stoodley and another [2018] EWHC 2135 ( QB), [2018] All ER ( D) 79 ( Aug) What are the practical implications of the judgment? Two key, practical takeaways arise from this decision. Substantive point: a motor insurer granting cover under a DOC extension is insuring a liability that must be provided for under section 145 of the Road Traffic Act 1988 ( RTA 1988). Consequently, a DOC insurer may function not only as a contractual insurer but also as a hybrid insurer (a contractual insurer whose liability is adjusted by RTA 1988, s 148) or as a statutory insurer under RTA 1988, s 151. This will matter in situations where multiple insurers are involved. Procedural point: claimants who anticipate an adverse ruling cannot sidestep it by discontinuing before judgment and then attempting to re‑litigate the same issue. Where a...