Jersey: The Royal Court In Jersey Highlights Potential Concerns For The Insurance Industry

Last Updated: 20 June 2012
Article by Carl Ashcroft

The small print is no longer enough. The recent case of Cafe de Lecq Limited v R A Rossborough (Insurance Brokers) Limited 2012 JRC 53 has put an end to the cry "it"s in the small print. That would be more than enough to make anyone who wishes to rely on an exclusion clause to sit up and take notice; but, even more importantly for insurers, an expert in the case labelled so called Quote Engines as laying the ground for the next big miss-selling scandal. For such an important case the basic facts were quite simple. On 8 May 2007 the Cafe de Lecq burnt down. The cause was agreed to be overheating of cooking oil by a deep fat fryer on the premises.

It was also agreed that the insurer was able to decline payment on the policy because of a clause which stipulated that any deep fat fryer on the premises should have a thermostat and an automatic cut out system if the thermostat failed. The fryer in question had no such safety features.

The case hinged on whether the broker (Rossborough) had discharged its duty of care to its client (Cafe de Lecq) and the extent to which that duty may be affected by the experience of the client.

The Court found that

  • The client had received complete copies all of the pertinent documentation including enclosures.
  • The full terms of the deep fat fryer warranty were clearly intelligible and any reader studying the terms of the ...warranty...would have had no difficulty in understanding what was being warranted.
  • The client even though a previous cafe owner had no special expertise in the context of the warranty in question and an attempt to classify him as such by the broker was said to be setting the bar too low.

The insurance broking industry in Jersey is regulated by the Codes of Practice for General Insurance Mediation Business issued by the Jersey Financial Services Commission in accordance with the powers conferred by article 19 of the Financial Services (Jersey) Law 1998. The Code requires that brokers must have due regard for the interests of its customers; must act with due skill, care and diligence; and where providing advice or exercising discretion must be able to demonstrate that it has provided the best advice or exercised the necessary discretion that is appropriate for its customers needs.

The broker had, in fact, simply sent the documentation to the client and told them to check the details shown on the attached schedule of cover to ensure that they remain in accordance with your requirements. A later letter again failed to say anything about the warranty in question. The Court stated that the crucial text was if not quite buried among other provisions of the policy, far from immediately apparent.

The court agreed with an expert called by the client that "leaving a client to find it for himself in the policy quotation, schedule or full wording is not good enough". A warranty is an onerous obligation and an important restriction on cover. The assumptions by the broker that the client was sufficiently experienced without ever having questioned him as to his experience fell below the standard required.

It was found by the Court that reliance on a so called Quote Engine had played a role in the broker"s shortcomings. The insurer had provided its software to the broker enabling the broker to offer quotations on behalf of but without further reference to the insurer. The process depends on the broker populating the software with information supposedly gleaned from the client. However the existence of default settings meant that any information insufficiently explored with the client could lead to arbitrary assumptions being incorporated in the quotation. In this case it was conceded by the broker that to a "large extent" he had populated the software with information that he had not specifically discussed with the client. This the court said "drained the broker"s role of much of its raison "etre" and placed the broker more closely allied to the insurer than is healthy to the detriment of the client whose interest the broker is supposed to be looking after.

In coming to its conclusion the Court found the client/broker relationship as pivotal. The whole premise of that relationship was that it should accomplish something over and above what the client could do for himself were he to approach an insurer direct. That had clearly not happened in this case.

The Codes and the case law clearly point to the need for unusual, limiting or exempting provisions being brought to the attention of the client Harvest Trucking C Ltd v Davis [1991] 2 Lloyd"s Rep 638.

In effect the Court stated the client was simply told Here is the policy documentation: be sure to read it and check that it meets your requirements. Irrespective of the client"s experience, said the Court, that is not good enough.

The warnings are clear therefore. If you wish to rely on an unusual, limiting or exempting provision then it must be brought to the attention of the client preferably both orally and in writing thereafter. It may also be necessary to take a step back from automated processes or proformas whereby the setting up of contracts is concerned.

Without wishing to be alarmist it may also be prudent to consider any contracts that have been automatically generated. There may be a time bomb ticking in your filing waiting to go off.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.