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The British and Irish Legal Information Institute (Bailii) contains British and Irish case law & legislation, European Union case law, Law Commission reports, and other law-related British and Irish material.  Certain recent cases published in the Lloyd’s Law Report are also available on our website.

The British and Irish Legal Information Institute (Bailii) contains British and Irish case law & legislation, European Union case law, Law Commission reports, and other law-related British and Irish material.  

Bailii provides access to its database of cases and other materials for free.

To search cases please use the following link:


Certain recent cases published in the Lloyd’s Law Report will be made available on our website.

To find cases please use our search function.

We have also included links to video recordings of BILA events.

Cyber liability and mock trial (video) 22 June 2011

Rubin and anor v Eurofinance SA and others [2012] UKSC 46

The Supreme Court of the United Kingdom has, in a judgment handed down on 24 October 2012, ruled that the liquidators of New Cap are entitled to enforce in England against a Lloyd’s Syndicate a judgment of the New South Wales Supreme Court ordering the Syndicate to repay US$5,980,600, plus interest, which the Syndicate had received from New Cap in January 1999.

New Cap, an Australian reinsurer, reinsured Lloyd’s Syndicate 991 for a number of years, including the years 1997 and 1998. The reinsurance agreements were governed by English law and contained London arbitration clauses. The parties entered into commutation agreements under which New Cap paid the sums of US$2,000,000 and US$3,980,000 representing the losses in these two years. However, at the time of payment New Cap was insolvent, and it entered administration three months later. Shortly afterwards it was wound up by its creditors. Those circumstances triggered the unfair preferences provisions of Part 5.7B of the Corporations Act 2001 (Cth).

In 2003 the liquidator commenced proceedings in New South Wales against the Syndicate, seeking a return of the payments under s 588FF of the Corporations Act 2001. The Syndicate contested the jurisdiction of NSW Court and refused to appear in the proceedings on the grounds that the Syndicate was not present in NSW and had not submitted to the jurisdiction of the Court. In December 2003 permission was given for service on the Syndicate in London, jurisdiction being founded on the fact that the cause of action arose in NSW.

The Syndicate continued to refuse to participate in the proceedings, despite a judgment of White J in September 2008 confirming that the NSW Court possessed jurisdiction and that the arbitration clauses were ineffective as between the liquidator and the Syndicate. However, the Syndicate remained a party to the separate liquidation proceedings and submitted proofs of debt in respect of unpaid sums and return premiums. Judgment was given against the Syndicate by Barrett J in New Cap Reinsurance Corporation Ltd v A E Grant [2009] NSWSC 662, a judgment later varied, [2009] NSWSC 950, to take account of the different membership of the Syndicate in the two years in question.

The NSW Court sought the assistance of the English courts in the recognition and enforcement of the award in England. English law on the recognition and enforcement of foreign judgments is labyrinthine, and there are several different procedures, including the common law and the Foreign Judgments (Reciprocal Enforcement) Act 1933 for ordinary judgments, the Brussels Regulation for EU judgments, the Lugano Convention for other European judgments, plus special statutory procedures for the recognition and enforcement of judgments given in insolvency proceedings inside the EU and outside the EU. The enforcement proceedings in England turned upon which of these procedures was the correct one and whether its requirements had been satisfied.

In a 200 paragraph judgment which produced disagreements on various points but unanimity in the outcome, the Supreme Court ruled in favour of the liquidator. The majority approach, found in the comprehensive judgment of Lord Collins, was that the judgment could be recognised and enforced under the 1933 Act, a measure which operates on a basis of reciprocity. Reciprocal arrangements exist with Australia. The Act operates where the court whose judgment is to be enforced possessed jurisdiction over the defendant either because he was present in the jurisdiction or because he had voluntarily submitted to the jurisdiction of the court. In the present case, the Syndicate was not present in NSW, but the Supreme Court found that the Syndicate had voluntarily submitted to the jurisdiction of the NSW court by pressing its claims in the liquidation of New Cap: the two sets of proceedings were sufficiently closely related for that purpose.

In the outcome, therefore, the judgment of the NSW Court in 2009 ordering the money to be repaid by the Syndicate is enforceable in England.

For further information: Rubin and another v Eurofinance SA and others [2012] UKSC 46

Stych v Dibble [2012] EWHC 1606 (QB)

S was a passenger in a Range Rover being driven by D. The vehicle belonged to a customer (B) at a garage where D worked part-time, and it was being used without B’s knowledge or consent. D was uninsured. An accident occurred in which S was severely and permanently injured. S obtained judgment in default against D, and the question was whether B’s motor liability insurers were required to satisfy the judgment against D. Under section 151(2)(b) of the Road Traffic Act 1988 insurers are liable to meet a judgment obtained against any person other than the assured, but that does not apply to an “excluded liability”. That term is defined by section 151(4) as one suffered by a person who was allowing himself to be carried in or upon the vehicle and knew or had reason to believe that the vehicle had been stolen or unlawfully taken. The Court held, refusing to follow McMinn v McMinn [2006] EWHC 827 (QB), that the provision had to be construed consistently with the Second Motor Insurance Directive, Council Directive 84/85/EC, which referred only to a passenger who “knew” that the vehicle was stolen, so that the words “or ought to have known” bore no additional meaning. The Court did not deal with the question whether the words “unlawfully taken” were consistent with the Directive, as it had been conceded that a taking short of theft would bring the exception into play. On the facts, the insurers had failed to prove that S had known that the vehicle had been taken without permission, and so he was able to recover.

For further information: Stych v Dibble [2012] EWHC 1606 (QB)

The Bribery Act – are you ready? Talk by Raj Parker and Chris Newby (17 June 2011)

Video of BILA lecture on the Bribery Act – are you ready? Presented by Raj Parker and Chris Newby (17 June 2011)


Hawksford Trustees Jersey Ltd v Stella Global UK Ltd [2012] EWCA Civ 987

A dispute arose between the parties. The matter went to court and judgment was given for Hawksford. Stella Global, were ordered to pay interim costs of £200,000. Hawksford had tried but failed to obtain After the Event (ATE) insurance to cover a potential adverse costs order at the trial. Stella Global then appealed. On the day before the appeal hearing was scheduled to take place, Hawksford procured an ATE policy for a premium of £394,638, an amount greatly in excess of the other costs of the parties. The ATE policy provided cover to Hawksford, in the event of the appeal being allowed, against having to pay Stella Global’s costs of the action and the costs of the appeal. It was common ground that, had the appeal been allowed then the Court of Appeal would have ordered Hawksford to pay both the costs of the action and the costs of the appeal, so that the cover would have been necessary. In the event the appeal was dismissed and Hawksford sought to recover £331,038, the cost of the ATE premium discounted by a sum representing the premium charged for Hawksford’s potential liability to repay the interim costs ordered by the judge.

The Court of Appeal held, by a majority (Rix and Etherton LJJ, Patten LJ dissenting), that section 29 of the Access to Justice Act 1999 ? which provided that: ?Where in any proceedings a costs order is made in favour of any party who has taken out an insurance policy against the risk of incurring a liability in those proceedings, the costs payable to him may, subject in the case of court proceedings to rules of court, include costs in respect of the premium of the policy? ? was to be construed as drawing a distinction between the trial and the appeal. They were to be regarded as separate proceedings, so that it was not open to the Court of Appeal to award by way of costs the amount of an ATE premium which related to the trial.

For further information: Hawksford Trustees Jersey Ltd v Stella Global UK Ltd [2012] EWCA Civ 987

Ted Baker plc v Axa Insurance UK Ltd [2012] EWHC 1406 (Comm)

Ted Baker (TB) sold merchandise through retail outlets. Between early 2006 and December 2008, TB noticed losses at a London warehouse but was unable to identify the cause. On 12 December, following a tip-off, an employee in charge of processing returns of stock, was arrested. He was, along with two accomplice van drivers, charged was stealing stock from the warehouse. On 13 March 2009, he pleaded guilty to conspiracy to steal between 10 September 2000 and 12 December 2008. Claims for loss of property and for business interruption were made against the defendant insurers. The Material Damage section of the policy excluded damage caused by “acts or frauds of dishonesty by the Insured’s employees”. However, cover was provided by the Theft Extension Clause: ?The insurance by this Section extends to cover loss or damage resulting from theft or any attempted thereat but the Insured shall be responsible for the first £1,000 of each and every loss which does not involve entry to or exit from the Premises by forcible and violent means.” The Business Interruption section applied where there was insurance in place covering the loss of property, although it excluded consequential loss for all loss “arising directly from theft or attempted theft” (Exclusion clause 2(c)) and “caused by or consisting of?acts of fraud and dishonesty ?” (Exclusion clause 4(c)). However, there was a special endorsement, headed “Theft Extension Clause” which stated ?Exclusion 2(c) of the Cover is deleted.? Exclusion clause 4(c) was not deleted. The insurers denied that employee theft was covered by the policy. Eder J ruled as follows:

  1. As a matter of construction of the wording of the policy, there was cover for employee theft under the Theft section. That construction was not contrary to business commonsense, it was not plain that something had gone wrong with the wording and this was not a case in which a term of the contract was open to more than one interpretation. The failure of TB to take up specific “Theft by Employees” cover available under the policy was not admissible as an aid to construction. The subjective views of the parties were inadmissible as part of the factual matrix, and there was no relevant evidence of market practice.
  2. Business interruption losses arising from theft by employees was covered by the policy. The cover under this section was on an “all risks” basis, the proviso that material damage covered was satisfied, exclusion 2(c) had been deleted and exclusion 4(c) had not been deleted but it applied only to fraud or dishonesty (see paras 108, 109, 110 and 113).
  3. There was no estoppel by convention. There were no relevant shared assumptions, and in any event it would now be inequitable for Axa to assert that there was no cover for employee theft under the Theft Section or BI Section of the policy (see para 118).
  4. Rectification was not made out. There was no outward expression of accord indicating an agreement to an exclusion clause or an agreement that employee theft was excluded, nor any cogent material upon which it could be said that the policy wording did not reflect what the parties agreed not merely what they or one of them thought that it meant (see para 124).

For further information: Ted Baker plc v Axa Insurance UK Ltd [2012] EWHC 1406 (Comm)

Elafonissos Fishing and Shipping Company v Aigaion Insurance Company SA [2012] EWHC 1512 (Comm)

The assured’s fishing vessel, Agios Spyridon, was insured by the insurers under a time policy for a year from 11 August 2007, on the terms of the Institute Fishing Vessel Clauses 1987. The policy contained a warranty as follows: “Warranted laid up from 1/11/06 until 28/2/07 ? in port of Mahajanga ?”. On Christmas Day 2006, a cyclone struck the port of Mahajanga. This caused the vessel to break free and to collide with the port, damaging the vessel.  The insurers put the assured to proof of loss, both in respect of damage to the vessel and also in respect to a claim made against the assured by the owners of the vessel Saint Raphael for salvage in that it towed the Agios Spyridon. They also argued that the assured was in breach of warranty. Blair J held as follows:

  1. As to the damage, Blair J was satisfied by the evidence that on the balance of probabilities extensive damage had been caused by repeated contact with the quay and had not come from any other (uninsured) source.
  2. The salvage claim would be disallowed, as there was no evidence of any agreement being reached with the Saint Raphael for salvage services.
  3. If, as contended by the insurers, the warranty was to be construed as requiring the assured to comply with the regulations of the Port of Mahajanga, which required the vessel to have four crew members on board and to have operational engines, the vessel was crewed and the insurers had not proved that the engines were inoperative. However, that construction of the warranty would be rejected: because of the potentially draconian effects of the breach of promissory warranties, they were to be construed narrowly, and if insurers had wanted the protection they claimed then they should have stipulated for it in clear terms.

For further information: Elafonissos Fishing and Shipping Company v Aigaion Insurance Company SA [2012] EWHC 1512 (Comm)

Harrison v Black Horse Ltd [2011] EWCA Civ 1128

In July 2003 the Harrisons borrowed £46,000 from the Bank, and at the same time took out a single Payment Protection Insurance (PPI) policy costing £11,500. The premium was borrowed by means of a separate loan. In July 2006 the Harrisons borrowed a further £60,000 (to discharge the previous borrowing and the PPI policy, with the balance on household improvements and a holiday), and they took out a further PPI policy at a cost of £10,200. The loan was repayable over 23 years, and the PPI was to last for five years only but the premium was payable co-termimously with the loan repayments.

The 2006 loan was discharged in March 2009 and the PPI policy was cancelled, by which time it had cost the Harrisons £10,529.70. The PPI policy was sold by the Bank as agent of the insurers, Lloyds TSB General Insurance Ltd, and the Bank’s commission was £8,887.49 (87 per cent of the premium). The Bank did not disclose either the fact or amount of this commission to the Harrisons. The Harrisons claimed damages from the Bank.

HHJ Waksman dismissed the claim.

  1. Under section 150 of the Financial Services and Markets Act 2000 (FSMA) the Bank was under a statutory duty to comply with Insurance Conduct of Business Rules (ICOB), and rule 4.3 required the Bank to take reasonable steps to ensure that any personal recommendation to buy an insurance contract was suitable for the customer’s needs. On the facts the Bank had complied with the requirements of the rule, in that it had sought all relevant information by a detailed questionnaire. Further, there was no breach of rule 2.3 which prohibits the acceptance of an inducement by an agent to the extent that it was likely to conflict with the agent’s duty to the customer: although the commission was an inducement, the salesperson acting for the Bank did not receive any part of the commission and was unaware of its extent ? there was no causal link between the commission and the sale.
  2. Insofar as there was a duty of care owed by the Bank, there was no breach of that duty.
  3. There was no unfair relationship between the parties within section 140A of the Consumer Credit Act 1974 so that there was no basis for a remedy under section 140B: the Harrisons had not been told that the PPI policy was compulsory, and they had been given an opportunity to consider it.

The Harrisons appealed, arguing that the judge had been wrong in finding that there had not been an unfair relationship. The Court of Appeal dismissed the appeal. The Court of Appeal held that under the ICOB Rules there was no requirement of disclosure of commission to a consumer, and it would be anomalous if the lender was obliged to disclose receipt of a commission in order to escape a finding of unfairness under section 140A of the Act even though he was not obliged to disclose it under the ICOB Rules.

For further information: Harrison & Anor v Black Horse Ltd [2011] EWCA Civ 1128 (12 October 2011)

Jones v Environcom Ltd (No 2) [2011] EWCA Civ 1152

The assured’s business involved, amongst other things, recycling refrigerators. It was necessary to remove compressors, and in some cases this could be done only with the use of plasma guns. Those devices posed a risk of metal splatter and sparks which could cause fires. A major fire occurred as the result of the use of a plasma gun, and the insurers avoided the policy on the ground that there had been non-disclosure of the use of plasma guns, of a series of small fires caused by such guns and of a fire shortly before the renewal of the policy. The claim against the insurers was settled for £950,000, and the assured sought to recover the shortfall in its loss of some £6 million from its brokers.

David Steel J dismissed the claim.

  1. The brokers had been in breach of their duty to warn the assured of its duty of disclosure: it was not enough for the brokers to rely upon its written standard form explanations and warnings.
  2. The brokers were also in breach of duty by failing to take adequate steps to elicit the information which required to be disclosed, and if it had done so the existence of the fires would have come to light.
  3. However, the breaches had not caused the assured’s loss:
  • had there been disclosure, the loss would not have been insurable at all or, if it was, then it would not have been insurable on terms and premium acceptable to the assured;
  • the assured had been in breach of its Waste Management Licence, and that was a material fact which would have been relied upon by the insurers had other grounds for avoidance not existed; and
  • had there been renewal, the policy would have demanded that the use of plasma guns ceased, in which case there would have been no loss. The brokers appealed on the sole ground, not raised at trial, that if the brokers owed a duty to ensure that the assured’s practices were such as to render cover unnecessary. The Court of Appeal held that the pleadings would have to be amended to admit this defence, and that it was not appropriate at appeal stage to admit a new defence which was not merely a point of law but raised sensitive issues of mixed fact and law. The appeal was thus rejected.

For further information: Jones v Environcom Ltd & Anor [2011] EWCA Civ 1152 (13 October 2011)

W v Veolia Environmental Services (UK) Plc [2011] EWHC 2020 (QB)

The claimant’s 21 year old Bentley, worth around £16,000, was damaged by the negligence of the defendant. The claimant entered into a credit hire agreement for a replacement vehicle at a rate of £863.68 per day. Under the agreement the claimant assumed liability for the contractual rate of hire, but payment was deferred pending a claim for those costs that was made against the defendant, and to the extent that the costs were irrecoverable the claimant was insured by separate insurers against that risk up to the amount of £100,000.

The replacement vehicle was delivered to the claimant at his house, and he signed both the credit hire agreement and the insurance application. The credit hire agreement was to last for 85 days, but repairs had not been effected on the expiry of that period and so a second agreement was sent to him which he signed and returned. The Bentley took 185 days to be repaired even though the damage was not serious. The credit hire fees amounted to some £138,000. The insurers, having paid the hire fees to the full extent, sought to recover from the defendants. Their argument was that the hire agreements were unenforceable under the Cancellation of Contracts Made in a Consumer’s Home or Place of Work etc Regulations 2008.

HHJ Mackie held as follows:

  1. The first agreement was unenforceable under the 2008 Regulations, although the second was valid.
  2. Had the claimant not paid the fees under the credit hire agreement, he would not have had a claim for damages against the defendants, because he would not have suffered any loss.
  3. However, the fees had been paid, albeit by the insurers, and accordingly the claimant had an action against the defendants for the sums paid, and the insurers were subrogated to that cause of action.
  4. The claimant had not failed to mitigate his loss by making payment, as he had acted reasonably.
  5. The evidence showed that the claimant’s financial affairs were in a bit of a mess, and accordingly he had not failed to mitigate his loss by entering into the credit hire agreement.
  6. Although the insurers had paid £38,000 ex gratia, that did not prevent them from recovering the full amount of their payment by way of subrogation.

For further information: W v Veolia Environmental Services (UK) Plc [2011] EWHC 2020 (QB) (27 July 2011)

Sousa v London Borough of Waltham Forest Council [2011] EWCA Civ 194

The claimant was insured by the insurers under a policy against damage to his property. The property suffered subsistence damage caused by the roots of a tree owned by the defendant. The insurers provided the claimant with an indemnity (other than in respect of the policy excess) and instructed him to commence proceedings against the defendant, subject to agreeing to indemnify him against the costs of the proceedings.

The claimant was required to use a specified firm of solicitors with whom the insurers had a Collective Conditional Fee Agreement (CCFA) which included a success fee of 100 per cent. The claim was settled on the basis that the defendant paid the claimant’s costs, but the defendant contested the success fee on the basis that it had not been reasonable for the claimant to have entered into a conditional fee agreement because he had the benefit of a full indemnity against costs by the insurers.

The Court of Appeal, upholding HHJ Behrens QC, held that the success fee was recoverable. The assured was the notional claimant, and the fact that the claim was being controlled by the insurers under their subrogation rights was irrelevant. The question was whether it was reasonable for the claimant to enter into a conditional fee agreement, and in the circumstances it was reasonable because he had been instructed to do so. Even if the court looked to the reality of the situation and treated the CCFA as one for the benefit of the insurers, there was nothing which precluded insurers from taking out a CCFA: the financial resources of the claimant were irrelevant to the question of whether he was entitled to enter into a conditional fee agreement.

For further information: Sousa v London Borough of Waltham Forest Council [2011] EWCA Civ 194 (03 March 2011)

Parker and Parker v National Farmers Union Mutual Insurance Society Ltd [2012] EWHC 2156

The first claimant (C1) was the owner of a house, which was insured in her name by The National Farmers Union Mutual Insurance Society Limited (NFU), the insurers, under a policy dated 6 July 2009. On 22 July 2009 the second claimant (C2), who was by then living with C1, was added as an assured. The house was damaged by fire on 6 December 2009, and a claim was made by C1. The insurers denied liability on a number of grounds: there was non-disclosure of a fraudulent claim by C2 in 2002 in respect of a stolen watch; there was non-disclosure of a fraudulent claim by both C1 and C2 in 2007 in respect of two stolen watches; C2 had deliberately set the fire in 2009; false documents relating to the lease of the property had been submitted in support of the claim; and there was breach of a policy condition which required documents. NFU counterclaimed for repayment of the sums paid for the earlier claims, for the cost of investigating the fraud and for a declaration that any sums payable to C1 could be recovered by way of subrogation from C2. Teare J held as follows.

  1. NFU did not have a non-disclosure defence against C1. (a) The 2002 claim by C2 had been fraudulent. (b) The 2007 claim by C2 had been fraudulent, but C1 had not been involved in the fraud. (c) The policy was composite and not joint. C1 and C2 had different interests in the property. C1 was the owner, and if C2 had any interest at all it was either some form of equitable interest or possibly in the rent payable under a lease to C1 and C2. Given that the rights of C1 and C2 were different, the policy could not be avoided against C1.
  2. The fire had been deliberately set by C2. However, C1 was not involved in the fraud and the fact that the policy was composite meant that she was not prevented from recovering.
  3. False documents were not submitted in respect of the fire, so on the facts there was no argument that C2 had submitted false documents as agent for C1 so that C1’s claim would be lost.
  4. The insurers could rely upon the defence of breach of condition. (a) The general condition ?To qualify for benefit you ?. must keep to the terms and conditions of the policy? rendered the claims conditions a condition precedent to liability, and that applied to the obligation on C1 ?to provide all the written details and documents that [the insurers] ask for?. (b) C1 was in breach of that condition, by refusing the insurers’ request to provide bank statements to evidence the availability of funds to rebuild the property. (c) The condition was not void under the Unfair Terms in Consumer Contracts Regulations 1999. The term did not cause a significant imbalance in the parties’ rights under the contract to the detriment of C1: the insurers were entitled to ask for documents which were in C1’s possession as long as they acted reasonably; under ICOBS 8.1 the insurers could not reject a claim unreasonably; and the general condition was expressed in plain, intelligible language.
  5. ICOBS 8.1.1R, which prevents an insurer from unreasonably rejecting a clam, did not take effect as an implied term in the policy, although they were legally binding. In the present case the breach of condition was connected to the loss, and reliance on the condition was not unreasonable in that C1 had been informed of the consequences of no-compliance.
  6. Had it been necessary to decide the point, the insurers would have had a subrogation claim against C2. C2 faced liability for damaging C1’s property, and the insurers would have been entitled to exercise subrogation rights against C2.
  7. The insurers’ counterclaim would be upheld. (a) The insurers were entitled to repayment of the sums paid in respect of the earlier fraudulent claims, with compound interest. (b) The insurers were entitled to damages representing the costs of investigating the fraudulent claim, with simple interest.
  8. If the insurers were liable, the diminution in the value of the house after the fire was some £425,000. As that was less than the agreed costs of reconstruction, that was the sum that would have been payable.

For further information: Parker and Parker v National Farmers Union Mutual Insurance Society Ltd [2012] EWHC 2156

AXA Insurance UK Plc v Thermonex Ltd [2012] EWHC B10 (Mercantile)

Thermonex, was between 2004 and 2008 a sub-contractor engaged in the construction of 118 Golf Villa residences in Ireland. In September 2009 proceedings were commenced in Ireland against Orchardville, a sub-contractor, by the main contractor, Gem Construction, seeking damages for breach of contract, breach of warranty restitution and negligence in respect of the design, supply and installation of basements in the development, which were alleged to have developed leaks. Thermonex was not joined to those proceedings. No other property was damaged and the estimated costs of Remedial works were undertaken, and the total estimated cost was just under €4.1 million.

Thermonex did not notify Axa, its public liability and CAR insurers, and went into liquidation in the middle of 2011. Gem threatened to join Thermonex to the Irish proceedings and Axa sought a declaration in the English courts that there was no liability under the policy.

HHJ Simon Brown QC found for Axa:

  1. The case was appropriate for declaratory relief under CPR 40.20, given that: foreign proceedings had been threatened and appeared to be imminent; Axa’s potential liability was substantial; and the policy was expressly stated to be governed by English law and it made sense for the English court to give a ruling on its meaning.
  2. The claim did not fall within the public liability section of the policy: this was a claim for pure economic loss and breach of contract, and thus fell outside the scope of public liability cover; and in any event there were policy exclusions for the contract works for for remediation costs for defects in the works and for liability assumed under contract.
  3. The CAR section of the policy was not engaged, as there was an express exclusion for the cost of replacing, repairing or rectifying any insured property due to design defects.
  4. The claims had not been notified immediately, as required by the policy. The notification obligations were conditions precedent in that the policy stated that all conditions were conditions precedent and there was an express provision saying that no claims would be payable unless the claims conditions were complied with.

For further information: AXA Insurance UK Plc v Thermonex Ltd [2012] EWHC B10 (Mercantile)Bailii.