Author Archives: Sam Tacey

Court of Appeal holds that a failure to exercise a “duty to speak” can form the basis of an estoppel

 

In Ted Baker PLC v (1) AXA Insurance UK PLC (2) Fusion Insurance Services Ltd  (3) Tokio Marine Europe Insurance Ltd [2017] EWCA Civ 4097 Ted Baker PLC (TB) suffered significant business interruption losses as a result of goods stolen by a trusted employee. TB subsequently made claims against its insurers for those losses. At first instance, TB’s claim was rejected for two main reasons: first that TB was in breach of a condition precedent, on the basis that it failed to produce certain documentation required by the policy; and second, that the nature of the thefts was such that no single loss exceeded the excess in the policy. Eder J, at first instance, stated that he had not reached these conclusions “with any great enthusiasm”.

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Commercial Court upholds right of insurer to avoid policy for misrepresentation and non-disclosure

In Dalecroft Properties Ltd v Underwriters [2017] EWHC 1263 (Comm), Mr Richard Salter QC (sitting as a Deputy Judge of the High Court) confirmed the defendant insurers’ right to avoid a property insurance policy following various misrepresentations relating to the state of repair of the insured property and non-disclosures relating to acts of vandalism to the property. The property in question was subsequently destroyed by fire and a claim was made by the insured. In response, the insurers purported to avoid the policy. On the facts, it was held that there were material misrepresentations and that material non-disclosures were made, such that the insurers were entitled to avoid the policy.

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Court of Appeal confirms that payment of money into escrow account is not an insured loss under a liability policy

 

In WR Berkley Insurance (Europe) Limited v Teal Assurance Company Limited [2017] EWCA Civ 25, the Court of Appeal upheld the first instance decision of Mr Justice Eder, and confirmed that the payment of monies into an escrow account did not constitute an insured loss under a liability insurance policy.

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Commercial Court provides guidance on interaction between aggregation and excess clauses

In Spire Healthcare v Royal Sun Alliance Insurance plc [2016] EWHC 3278, the claimant sought declarations to the effect that an insurance policy it held with the defendant insurer contained no operative aggregation clause such that the total cover available to it would be £20m (the aggregate limit of the policy). The claimant also contended that if it was wrong, and an aggregation clause did exist (such that the maximum cover available would be £10m (the per claim limit of the policy)), then there should also be aggregation in respect of the excess payable in relation to each claim, so that a single excess of £25,000  should be payable in respect of a group of aggregated claims. The defendant took the opposite position, contending that there should be aggregation in relation to the limits of cover, but none in relation to the excess. The claimant (an operator of a number of hospitals) sought the declarations due to the large number of negligence claims it faced arising from the conduct of a single consultant surgeon.

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Commercial Court dismisses appeal by reinsurers disputing that certain losses arising from the World Trade Centre attack in 2001 arose from one event

In Simmonds v Gammell [2016] EWHC 2515 (Comm) the respondent insurer had participated in various layers of an excess liability insurance programme, insuring the Port of New York (PONY). The appellant reinsurer had participated in one of the relevant reinsurance contracts, reinsuring the respondent. The reinsurance contract provided cover of US$1.5 million, excess of $1 million, in respect of “each and every loss”. Loss was defined as a “loss…or a series thereof arising from one event”.

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Supreme Court rules that “collateral lies” are no bar to a claim on an insurance policy

In Versloot Dredging v HDI Gerling Industrie Versicherung AG [2016] UKSC 45, the Supreme Court held that a claim which is supported by a fraudulent narrative will not be subject to forfeiture under the fraudulent claims rule provided that the claim itself was valid and that the lie had no bearing on the validity of the claim.

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Supreme Court determines that a director cannot be liable to an employee under the Employers’ Liability (Compulsory Insurance) Act 1969 for a failure to insure

In Campbell v Gordon [2016] UKSC 38 the appellant, Mr Campbell, was employed by a company as a joiner. Mr Gordon, the respondent, was the sole director of the company. Mr Campbell subsequently suffered an injury while working with a circular saw. Although the company had employers’ liability insurance, it excluded liability for claims arising from the use of electrical woodworking machinery, such that it did not cover Mr Campbell’s claim. The company’s failure to have appropriate insurance in place was in breach of s1(1) of the Employers’ Liability (Compulsory Insurance) Act 1969 (ELCIA).

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