UK: Insurance and Reinsurance Review of 2010

Last Updated: 20 December 2010
Article by Nigel Brook and David Langley
This article is part of a series: Click Insurance and Reinsurance Review of 2010 for the previous article.


Mr Farid Yeganeh v Zurich Plc [2010] EWHC 1185 (QB)

Allegations of fraud against an insured - importance of motive

This case illustrates the difficulties which insurers can face in proving allegations of fraud (and, in particular, arson) by a policyholder. The legal issues were not in dispute in this case and it was accepted by both sides that as soon as there is any fraud in the claims process, the whole insurance claim is fraudulent (see Axa General v Gottlieb [2005]). Whilst the standard of proof for fraud is the balance of probabilities, the more serious the allegation, the stronger the evidence needed to establish it. On the other hand, it is unlikely that there will be any documentary evidence of an insurance fraud and so the court may have to draw appropriate inferences from circumstantial evidence.

The property insurer alleged that the defendant had deliberately burnt down his property. The defendant admitted making untruthful claims to his local council in order to evade Council Tax and the judge said that there were doubts about the honesty of the defendant and the truthfulness and accuracy of his evidence. However, despite this, the judge found that there was no direct evidence of arson and there was no evidence to contradict his denials of guilt and about where he was on the night of the fire. The judge said that, if there had have been sound evidence of motive, he might have concluded that there had been arson because the likelihood of the only other possibility (that a heater was accidentally switched back on when it was tilted) was "so remote". However, the judge found that the list of reasons advanced by the defendant as to why he would not wish to burn down his house was "powerful". In particular, it was hard to see how arson followed by reinstatement of the house would advance any planning ambitions which the defendant had. This lack of a motive was therefore fatal to the insurer's claim of arson: "Arson is a very serious crime in quite a different league, in terms of execution as well as gravity, from making dishonest claims for payment or to save money".

However, the judge did accept that the defendant had made a dishonest claim for the contents of the property. In this respect, the defendant's dishonesty regarding Council Tax went to more than just his credibility as a witness - "It points to a tendency consistent with the fraud alleged" by the insurer..."This was not the first time he had made a dishonest claim for limited financial advantage". As a result of this fraud, the entire claim by the insured failed.

Shaul Yechiel v Kerry London Ltd [2010] EWHC 215 (Comm)

Factual evidence of insurance fraud

Various items of jewellery belonging to the insured were stolen when the insured was in France. The policy in question provided cover for those items only when they were in a deposit box or, for a period of up to 14 days only, in the insured's personal custody. At the time of the theft, the jewellery had been in the insured's custody for more than 14 days. The insured accepted that there was therefore no cover for the theft, but claimed that his insurance brokers had failed to inform the insurers that the jewellery would be out of the deposit box for more than 14 days. The issue in this case was whether the insured had sent a letter to his brokers (by fax and by post) informing them that he was going to breach the 14 day limit. The case therefore turns on its particular facts but it is noteworthy for the factors which the judge took into account when deciding whom to believe.

Although each factor was not in itself conclusive, taken cumulatively these factors were compelling. They included the following: the insured had been inefficient at dealing with the insurers' requests in the past; it was not his practice to deal with his brokers by letter (instead he would phone them); if he had faxed the letter, the judge could not see why he would also have posted it; the insured did not call the brokers for confirmation of receipt even though he was seeking an extension of the 14 day time limit and knew that he would need to pay an additional premium/deal with insurers' further questions. The judge therefore concluded that the letter had not been sent.

Mark Noble v Martin Raymond Owens [2010] EWCA Civ 224

Whether retrial or fresh action should be ordered where claimant may have exaggerated damages due from insurers

The respondent was injured in a traffic accident. Liability was admitted and Field J assessed the level of damages at over £3m. A few months later, the defendant's insurers received confidential information that the respondent had in effect exaggerated his injuries and surveillance of him for several months appeared to the insurers to support that view and that the respondent had deliberately misled the court. The insurers applied for permission to appeal the award and for a retrial to take place. The respondent argued that judgment in his favour should not be set aside and instead the insurers should commence a fresh action to set aside the original judgment.

The Court of Appeal found that there was conflicting authority on this issue. In Ladd v Marshall [1954] Denning LJ held that a retrial should be held where, broadly, (1) the fresh evidence could not have been obtained with reasonable diligence for the original trial, (2) the evidence would have had an important influence on the case and (3) the evidence must be apparently credible. However, in the House of Lords case of Jonesco v Beard [1930], it was suggested that the proper course where deceit is alleged is to leave the aggrieved party to commence a new action (unless the Court of Appeal determines the issue itself or the evidence is incontrovertible).

Smith LJ said that the authorities are in conflict where the new evidence (as here) only suggests fraud and is contested by the other side. She concluded that, generally, "where fresh evidence is adduced to the Court of Appeal tending to show that the judge at first instance was deliberately misled, the court will only allow the appeal and order a retrial where the fraud is either admitted or the evidence of it is incontrovertible. In any other case, the issue of fraud must be determined before the judgment of the court below can be set aside". It was unnecessary to commence a fresh action, though, and the Court of Appeal allowed the appeal to the extent that the issue of fraud should be referred for trial by a High Court judge.


Masefield AG v Amlin Corporate Member Ltd [2010] EWHC 280 (Comm)

Whether act of piracy amounted to actual or constructive total loss

According to section 57(1) of the Marine Insurance Act 1906 ("the Act") provides that there is an actual total loss where "the subject-matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof" (there is no need to give notice of abandonment). Section 60(1) of the Act provides that "there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred". The policy in this case also contained a Constructive Total Loss clause which provided that no claim for a CTL would be recoverable unless the insured cargo was "reasonably abandoned either on account of its actual loss appearing to be unavoidable or because the cost of recovering...the subject-matter...would exceed its value on arrival".

In this case, Somali pirates had seized a tanker and the claimant cargo owner served a notice of abandonment on the defendant cargo insurer. The notice was declined. 10 days later the shipowners paid the pirates a ransom and the vessel was released. The claimant argued that although there had always been the possibility that the shipowner would successfully ransom the ship, that possibility should be ignored for the purposes of sections 57 and 60 of the Act. Steel J dealt with the following issues:

  1. Actual total loss. The issue was whether the claimant was "irretrievably deprived" of the cargo before the ransom was paid. The judge held that an insured is not irretrievably deprived of property "if it is legally and physically possible to recover it (and even if such recovery can only be achieved by disproportionate effort and expense)". The facts in this case were that (by contemporaneous correspondence and information in the public domain) the claimant was fully aware that the cargoes were likely to be recovered and that other vessels seized by Somali pirates had been promptly released following negotiations (and in fact the vessel and cargo were recovered shortly afterwards);
  2. Constructive total loss. It could not be said that the subject matter had been abandoned or that an actual total loss appeared unavoidable: "What is required is not a notice of abandonment....but the abandonment of any hope of recovery". In this case, the shipowners and cargo owners had every intention of recovering their property and were fully hopeful of doing so; and
  3. Was payment of the ransom contrary to public policy? The judge was not persuaded that it was. Payment of a ransom is not illegal as a matter of English law and although it was true that paying a ransom encouraged repetition (especially where there is insurance cover), it is the only option for ensuring that the crews of such vessels are taken out of harm's way. As there was no clear and urgent reason for categorising the activity as contrary to public policy, the courts should not become involved (this view was strengthened by the fact that kidnap and ransom cover is a long-standing feature of the insurance market and such policies should not be considered unenforceable).


Akzo Nobel Chemicals and Akros Chemicals v European Commission (2010/C 301/02)

ECJ (Grand Chamber) dismisses appeal over legal professional privilege and inhouse lawyers (in relation to EU competition investigations)

In April 2010, Advocate General Kokott issued an opinion approving the 2007 decision of the Court of First Instance of the ECJ that communications with in-house lawyers did not qualify for legal professional privilege in the context of EU competition investigations. As was widely predicted, the ECJ Grand Chamber has now followed that opinion and rejected an appeal against the Court of First Instance's judgment. The reasoning of the Grand Chamber was as follows:

  1. Following the decision in AM&S Europe v Commission [1982], legal professional privilege (in relation to EU competition investigations) does not cover exchanges within a company with in-house lawyers because such lawyers are not "independent": "An in-house lawyer, despite his enrolment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client. Consequently, an in-house lawyer is less able to deal effectively with any conflicts between his professional obligations and the aims of his client". It was said that, as an employee, an in-house lawyer cannot ignore commercial strategies pursued by his employer and so cannot exercise professional independence.
  2. This approach does not violate the general EU law principle of equal treatment because "an in-house lawyer does not enjoy a level of professional independence equal to that of external lawyers".
  3. There is no predominant trend across all the Member States towards affording legal professional privilege to communications with in-house lawyers. A larger number of Member States still exclude in-house lawyers from the scope of legal professional privilege or do not allow them to be admitted to a Bar or Law Society.
  4. Even if consultation with in-house lawyers was covered by the right to obtain legal advice (which the ECJ did not believe was the case), in-house lawyers are not always able to represent their employer before all the national courts.
  5. The conclusion of the ECJ does not undermine the principle of legal certainty and nor does it violate the principle of national procedural autonomy.

COMMENT: This decision, though expected following Advocate General Kokott's opinion, will be disappointing for in-house lawyers, not least because the decision might be deployed in argument in other areas of EU law, beyond competition law. Nevertheless, it should be recalled that this position was first established almost 30 years ago in AM&S and there has been no impact since then from that decision on the general English law position regarding in-house lawyers and privilege. The case of Alfred Compton v Customs & Excise Commissioners (No.2) [1972] confirmed that under English law, in-house lawyers do qualify for legal professional privilege (provided that advice is given in a legal context). Alfred Compton has been continually applied by the English courts, even after AM&S and, more recently, Akzo Nobel and there is no reason to anticipate that this position will change following the Grand Chamber's decision

Quinn Direct Insurance Limited v The Law Society of England and Wales [2010] EWCA Civ 805

Request for disclosure of documents to solicitors' insurer following Law Society intervention

"O" and "I" were joint partners of a firm of solicitors. Following the intervention of the Law Society in their practice, the solicitors' insurer refused to indemnify "O" on the ground of his alleged dishonesty. The insurer then sought disclosure of all documents of the firm in the Law Society's possession "to consider whether under the policy the [insurer] is obliged to indemnify or obliged not to indemnify ["I"]". No allegation of dishonesty had been made against "I" at that stage. The Law Society agreed to provide certain documentation (where specific claims had been made by clients and there were no privilege or confidentiality objections) but refused a blanket request for access. At first instance, Smith J refused the insurer's application (see Weekly Update 42/09) and the insurer appealed.

The Court of Appeal has dismissed the appeal. There was no implied term in the regulatory scheme (which requires solicitors to be insured) that the insurers are entitled to disclosure. This conclusion was based on several grounds, including: 1) an insured solicitor is not bound or entitled to disclose to his insurers privileged documents without a client's consent; and 2) the objective of the insurer in seeking the information and documents is not the advancement of any public purpose or regulatory responsibility but the private purpose of seeking evidence to justify a refusal of an indemnity to "I" in respect of clients' claims made against him.

Third party judgments

Omega Proteins Ltd v Aspen Insurance UK Ltd [2010] EWHC 2280 (Comm)

Whether judgment between insured and third party is binding on liability insurers

Clyde & Co for claimant

The insured was ordered to pay a third party damages after it failed to comply with a new law banning the supply of animal material containing the vertebral column of cattle aged over 24 months. The judgment found that the insured had breached express and implied contractual terms. The insured was placed in liquidation and so the third party brought a direct claim against the insured's liability insurers under the Third Parties (Rights Against Insurers) Act 1930. Insurers sought to rely on a policy exclusion which provided that the insurers would not indemnify the insured against any liability arising under a contract "unless such liability would have attached in the absence of such contract". Clarke J held as follows:

1. The exclusion clause in question requires the court to consider what liability there would have been had there been no contract between the insured and the third party (and not what liability there would have been taking into account the existence of the contract (the existence of a contract sometimes helping to establish the necessary proximity between the parties to found a tortious duty of care)).

2. The judgment against the insured was not determinative of whether or not the loss is covered under the policy. It is open for both insurers and the insured to dispute whether the insured was in fact liable and, if so, on what basis: "Unless B and C have by contract agreed something different, a judgment given in proceedings between A and B is neither binding on, nor enforceable by, C in subsequent proceedings between B and C".

Insurers had sought to rely on the observations of Tomlinson J in London Borough of Redbridge v Municipal Mutual Insurance [2001], where he held that it would not normally be possible to "look beyond or outside the four corners of the determination itself for the basis of the liability to which the insured has become subject". Clarke J said that as a first instance decision, these comments were not binding on him and, even if they were, Tomlinson J had only referred to what would "normally" be the position. In any event, he did not agree with Tomlinson J's conclusion and even if Tomlinson J was correct, it is only the primary facts which are fixed by the judgment against the insured.

In reinsurance, it is an implied term of the reinsurance contract which is governed by English law that the decision of a foreign court as to the liability of the reinsured to its original insured will be treated as binding (save for certain exceptions), even if the English court might have reached a different conclusion (see Commercial Union v NRG [1998]). Clarke J held that no such implied term arose in this case which did not involve worldwide reinsurance cover and, in any event, did not involve the decision of a foreign court.

3. In this case, the insured would have been liable even in the absence of the contract pursuant to which it supplied the material. It had failed to take reasonable care to ensure that the product which it supplied was safe and could be lawfully supplied. As part of its duty of care, it should also have kept itself informed of changes in the law (which were reasonably discoverable). Accordingly, it had been negligent.

4. As for the burden of proof, the judge held that since the policy term in issue was an exclusion clause with an exception (ie every liability which arises under any contract is excluded unless it would have attached anyway) and so it was for the insurer to show that the liability in question arose under a contract and also that the exception was inapplicable. The judge therefore rejected the argument that, once the insurer proves that the loss arose under a contract, it was then for the insured to show that the exception to the exclusion applies. However, it should be noted that this decision was confined to the particular clause in question in this case. The insurers were unable to discharge their burden of proof on the facts. Accordingly, the third party was entitled to be indemnified under the terms of the policy.

COMMENT: In this case, Clarke J was determining a question ("would the insured still have been liable in the absence of the contract?") which could not have been determined in the original action against the insured because that question was not in issue. However, Clarke J also commented that it was open to parties to re-argue questions which had already been decided in the original action. For example, an insured who had been held to be fraudulent in the original action might argue, in a subsequent action between the insured and his insurers, that he was in fact negligent (and therefore covered under his policy). Thus the original action establishes the primary facts (eg that a representation was made and what it included), but in a further action, the judge could look again at whether the representation was fraudulent or negligent (whatever was decided in the original action). In practice this approach will often entail the re-examination of witnesses and other evidence and could therefore be a potentially costly and time-consuming exercise for both the insured and its insurers


Persimmon Homes Ltd v Great Lakes Reinsurance (UK) Plc [2010] EWHC 1705 (Comm)

Whether ATE insurers entitled to avoid policy/allegations of negligent underwriting

An After the Event ("ATE") insurance policy was issued to the insured, who was bringing a claim against Persimmon. Persimmon won the action and the insured was ordered to pay Persimmon's costs. The insured was then wound up and so Persimmon brought a claim against the ATE insurers pursuant to the Third Parties (Rights against Insurers) Act 1930. The judge had found that the insured's employee had acted dishonestly in giving evidence against Persimmon. The ATE insurers purported to avoid their policy on a number of grounds, including misrepresentation of the risk.

Persimmon initially sought to advance the argument that, in the context of ATE insurance, the insurer must show that the material misrepresentation and/or non-disclosure would have affected the opinion of the solicitor acting for the insured in the underlying litigation and not of the "prudent underwriter". However, this argument was abandoned when the experts agreed that the misrepresentations and non-disclosure in this case were material. Steel J also rejected an argument that the insurers in this case had been aware of the misrepresentations and non-disclosure and had failed to react. A further argument was raised that there had been negligent underwriting in this case.

"Amber lights" set out in the insurers' own underwriting manual included: 1) a case with merits at 50%; 2) a case primarily dependent on oral testimony; and 3) a case with the hallmarks of a "David v Goliath". Persimmon argued that all these factors were present in this case. However, the judge noted that 1) although counsel had given an assessment of a 50% prospect of success in respect of their conditional fee agreement, of greater significance was the assessment of the merits by both counsel and solicitors in the region of 60% or more; 2) whilst the claim was mainly dependent on the resolution of a dispute between the witnesses, the dominant issue was the outcome of a meeting in respect of which the insured had an apparently contemporaneous note; and 3) although there was an element of inequality of arms, that would seem to be true of any claim for which a claimant was in need of a CFA in order to prosecute it. Steel J concluded that "Although many underwriters might (and indeed did) reject the risk, I am unable to accept the proposition that underwriters would certainly have rejected it as too risky". In particular, the willingness of counsel to act on the basis of a CFA had given the underwriter confidence to write the cover.

Kris Motor Spares Limited v Fox Williams LLP [2010] EWHC 1008 (QB)

Recoverability of ATE premiums - whether it is reasonable to insure at a late stage of proceedings

A dispute arose between a firm of solicitors and its clients. The solicitors were self-insured during the proceedings but shortly before the trial of a preliminary issue, took out an ATE (After the Event) insurance policy. The premium was expensive - £95,550 to obtain cover of £130,000 (a rate on line of 73.5%). After the solicitors won at trial, the master held that costs (including the ATE premium) should be paid by the clients. The clients appealed and said that the premium was objectionable for two reasons:

1. The policy had been taken out too late in the proceedings. Simon J rejected that argument. There is no principle that the premium on a late incepting policy is irrecoverable as an unreasonable cost - each case will depend on its particular facts. In this case, it had been reasonable for the solicitors to take the view that it would be imprudent to continue to self-insure, particularly in light of the fact that the clients had instructed Leading Counsel (thus possibly reducing the solicitors' chances of success).

2. The amount of the premium was unreasonable and contrary to the general principle against increasing the costs of litigation. The judge said that this was a less easy question to decide. ATE insurers do not compete for claimants, instead they compete for solicitors to recommend their product. Thus the only restraining force on the premium charged is how much a costs judge will allow on an assessment and the costs judges, in turn, have no criteria to enable them to decide whether any given premium is reasonable. The judge therefore concluded that "where the issue is raised as to the size of the premium there is an evidential burden on the paying party to advance at least some material in support of the contention that the premium is unreasonable". No expert evidence was adduced in this case, though, and so it could not be said that the master's conclusion on the level of the premium was wrong.

However, the judge did add that he recognised that the recoverability of ATE premiums under a costs order is currently the subject of vigorous debate (see, for example, the recent Jackson Report) and this judgment should not be seen as discouraging challenges to ATE premiums on the basis of unreasonableness. However, such challenges must be resolved on the basis of evidence and analysis.

Sanctions against Iran

On 9 June 2010 the United Nations Security Council (UNSC) passed Resolution 1929 (2010) imposing further UN sanctions on Iranian entities. A day later the UK responded by including within its own sanctions regime individuals and entities targeted by the UN. On 1 July 2010 the US enacted the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), which was followed on 26 July 2010 by the EU Foreign Affairs Council Decision, which together impose the toughest sanctions regime yet on Iran, with ramifications for the energy, insurance, transport and financial sectors. More recently on 16 August 2010 the US Treasury Department issued the Iranian Financial Sanctions Regulations to implement subsections 104(c) and 104(d) of CISADA and on 25 October 2010, the European Council adopted a wide-ranging package of sanctions on Iran, with prohibitions affecting the energy, insurance, transport and financial sectors which came into force on 27 October 2010.

The latest EU sanctions prohibit the provision of insurance or reinsurance to the Government of Iran, an Iranian person, entity or body and, to any natural person or legal person acting on behalf of or at direction of an Iranian person. Importantly, HM Treasury takes the view that this prohibition will also apply to reinsurance provided by a UK reinsurer where the underlying insured is an Iranian company, regardless of where the insurer is based.

Certain exceptions to this ban are allowed for the provision of: (i) health and travel insurance to individuals acting in their private capacity; (ii) any compulsory or third party insurance to Iranian persons or entities based in the EU; (iii) insurance or reinsurance to Iranian individuals acting in their private capacity (except if they are in the list of designated persons or entities); (iv) insurance or reinsurance to the owner of a vessel, aircraft or vehicle chartered by the Iranian Government or an Iranian person or entity.

Participation in any activities intended to circumvent this prohibition, knowingly or intentionally, is also prohibited. Insurance and reinsurance contracts concluded before 27 October 2010 are not prohibited but the sanctions prohibit their extension or renewal. In response to a query, HM Treasury has expressed the view that the prohibition does not apply to Iranian risks ceded after 27 October 2010 under existing treaty reinsurance.

Third Parties (Rights against Insurers) Act 2010

The Third Parties (Rights against Insurers) Act 2010 received royal assent in March 2010. The new Act is not yet in force and no date has been set yet for it to come into force. We set out below, though, some of the main changes introduced by the Act.

The 1930 Act of the same name allowed a third party claimant, in certain circumstances, to claim directly against an insurer where the insured has become insolvent. Under the 1930 Act, though, a third party couldn't issue proceedings against an insurer without first establishing the existence and amount of the insured's liability. That often necessitated expensive and time-consuming legal proceedings. The Act removes the need for multiple sets of proceedings by allowing the third party (if it wishes to do so) to issue proceedings directly against the insurer and resolving all issues (including the insured's liability) within those proceedings.

The Act also improves the third party's rights to information about the insurance policy, allowing the third party to obtain information at an early stage about the rights transferred to him or her in order to enable an informed decision to be taken about whether or not to commence or continue litigation.

The Act updates the law to reflect changes in insolvency law since the 1930s. This includes providing for rights to be transferred to a third party where an insured is facing financial difficulties and enters into certain alternatives to insolvency such as voluntary procedures between the insured and the insured's creditors.

It is also confirmed (the issue previously being in doubt) that the Act applies to voluntarily-incurred liabilities such as liabilities covered by legal expenses insurance.

An insurer's defences against an insured continue to operate against the third party so that the third party cannot be in any better position as against the insurer than the insured would have been. However some of the more technical defences on which insurers were previously entitled to rely on have been abolished. For example, it will no longer be possible for an insurer to decline liability on the grounds that the insured failed to notify him, provided that the third party has notified the insurer in accordance with the terms of the policy.

Jackson Report on Civil Litigation Costs

On 14 January 2010, Lord Justice Jackson produced the final report into his review of civil litigation costs. The report runs to over 500 pages and contains a broad range of proposals for reform. We summarise below some of the most important aspects of the report for insurers:

Liability Insurers: The report recommends that the recoverable costs in personal injury cases in the fast track (which deals with claims worth more than £5,000 but less than £25,000) should be fixed. The report also recognises the need to control the cost of expert evidence if an overall cap is introduced. Lord Justice Jackson remains of the opinion that BTE (i.e. legal expenses) insurance is beneficial to small businesses and he recommends that both insurers and the Department for Business, Innovation and Skills should make serious efforts to draw the various forms of BTE insurance (and its costs) to the attention of SMEs.

In relation to Conditional Fee Arrangements, the report recommends that success fees and ATE insurance premiums should no longer be recoverable under costs orders from losing parties. Instead, a return to "old style" CFAs (ie the type of CFAs in place prior to April 2000, whereby success fees and ATE premiums would be deducted from the client's damages (subject to a voluntary cap of 25% of the damages received)) is recommended.

Personal Injury Insurers: The report concludes that the payment of referral fees for personal injury claims should be banned. It also concludes that the introduction of one-way costs shifting (whereby the defendant pays the claimant's costs if the claimant wins, but the claimant does not pay the defendant's costs if the claimant loses) will materially reduce the costs of personal injuries litigation. However, the report also recommends two-way costs shifting if it reasonable and just to do so in a particular case.

Third Party Funders: The report recognises that third party funding promotes access to justice and (unlike CFAs) does not impose additional burdens on opposing parties. It also tends to weed out weak claims, because funders will not take on the risk of such cases. It is likely to become even more important if success fees under CFAs become irrecoverable. Although the report does not recommend the abolition of the law of maintenance and champerty, it does propose that if funders comply with a voluntary code drafted by the Civil Justice Council (or some other form of regulation), funding agreements should not be overturned on the ground that they breach that law. It is also suggested that if the third party funding market expands significantly, the FSA might eventually regulate it.

However, the report also recommends that third party funders should be exposed to liability for adverse costs in respect of litigation which they fund (subject to the discretion of the judge).

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.

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This article is part of a series: Click Insurance and Reinsurance Review of 2010 for the previous article.
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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.