UK: Insurance And Reinsurance Update - 5th June 2012

Last Updated: 21 June 2012
Article by Nigel Brook

Ted Baker Plc v Axa Insurance UK

Whether theft by employee fell within scope of an insurance policy/construction of insurance policies

The insured discovered that one of its employees had been stealing stock from its warehouse and sought an indemnity from its insurers. The relevant insurance policy had a number of discrete sections including a Theft section which contained an endorsement providing that "the insurance by this Section extends to cover loss...resulting from theft or any attempt thereat but the Insured shall be responsible for the first £1,000...which does not involve entry to or exit from the Premises by forcible and violent means".

One of the sections of the insurer's standard wording - the Theft by Employees Section ("TES") - was not selected by the insured and did not form part of the policy issued to the insured. Nevertheless, Eder J held that there was cover under the Theft section of the Policy "and the wording should be given its plain meaning, namely that theft means theft, including theft by employees as this is not otherwise excluded".

The judge further held that there was no customary usage of the expression "theft or any attempt thereat" and underwriters' subjective views as to how cover should work were inadmissible. He also rejected an argument that something had gone wrong with the wording because the insured's construction was contrary to business commonsense or that market practice assisted the insurers' arguments. He held thatRainy Sky v Kookmin (see Weekly Update 39/11) did not apply to this case because there were not two competing constructions of the words used.

The judge acknowledged that inMopani Copper Mines v Millennium Underwriting (see Weekly Update 25/08) Clarke J had held that it was possible to look at deleted words in a policy in certain circumstances. However, he concluded that in this case the policy was clear and so it was not permissible to take into account the insured's non-selection of the TES as an aid to construction of the Theft section of the policy. In any event, the TES could not have been selected without amendment in this case and so, even if the non-selection was taken into account, it would not have helped insurers.

Elafonissos Fishing v Aigaion

Whether insured had proved its claim/breach of warranty allegation

Clyde & Co for defendant

The insured sought to claim for damage which it said its fishing vessel had suffered in a port when a cyclone struck the port. Shortly before trial, the insurer confirmed that it would not be putting forward a positive case but that, instead, the insured should be put to "strict proof".

Blair J acknowledged that certain issues could not be clarified at trial by oral evidence and cross-examination because all the insured's factual evidence was tendered under the Civil Evidence Act. However, he held that limited (rather than no) weight should be given to the Civil Evidence Act statements. He concluded that the insured had succeeded in proving its case (except in relation to a salvage claim - see below).

As part of his judgment, the judge found that an amount paid for wages and maintenance of crew should be allowed even though the insured had to have crew on board anyway (because the payment was allowable pursuant to the Rules of Practice of the Association of Average Adjusters).

However, the insured had not proved its claim for salvage by another vessel. Unlike the rest of its claim, this part of the claim had not been intermediated through a third party and so there had been no element of outside scrutiny. Furthermore, there had been no explanation as to why insurers had not been asked in advance to agree a payment to the vessel owners. In any event, taking into account Greek law on the point, the amount paid had not been reasonable.

Insurers had also sought to rely on a breach of warranty. The relevant warranty was "Warranted laid the Port of Mahajanga". Insurers were unable to prove a breach on the facts, but Blair J held, in any event that there was no basis for implying into the warranty further requirements on the insured to comply with the port regulations: "because of the potentially draconian effects of the breach of promissory warranties (ie that breach discharges the insurer as from the moment of breach regardless of whether the breach causes or contributes to the loss), they will be construed narrowly".

RBS v Highland Financial Partners

Whether clause was an exclusive jurisdiction clause and whether it bound assignee/anti-suit injunction

The claimant sought an anti-suit injunction restraining the pursuit of proceedings in the US. Several issues fell to be considered by Burton J, including the following:

1) Was the relevant jurisdiction clause an exclusive jurisdiction agreement? The clause provided that "the courts of England shall have jurisdiction". Burton J held that it did, in context, amount to an exclusive jurisdiction clause especially since the next clause in the agreement was entitled "Non Exclusive Jurisdiction". The express word "exclusive" did not need to be used.

2) Was an assignee of the defendants bound by the clause? The defendants sought to rely onThrough Transport Mutual v New India [2005] but Burton J referred to caselaw and textbook commentary which have criticised the decision. The judge held that the assignee was bound by the exclusive jurisdiction clause (the point, in any event, having been eventually conceded by the assignee, it seems).

3) Could the claimant obtain an anti-suit injunction to restrain proceedings which were being brought in the US not just against itself but also against two of its employees (who had been joined to the US proceedings as personal defendants). There is conflicting caselaw on the issue of whether an anti-suit injunction can be ordered to restrain proceedings against a non-party. However, Burton J concluded that "the obvious reputational damage for [the claimant] resulting from the making of a claim as to what [the employees] have allegedly done during their employment, in itself gives [the claimant] a sufficient interest" for the court to grant an anti-suit injunction restraining the US proceedings against the employees.

Ambra Borgognoni Vimercati v BV Trustco

Expert determination and the rights of one of the parties/whether the court should intervene

The parties entered into an agreement which provided that, should the claimant dispute the price obtained by the defendant, she would be entitled to request the defendant "to obtain at her cost ...a market an expert to be appointed by the International Chamber of Arbitration in Milan". Following a subsequent dispute, the claimant did not accept the defendant's proposed approach to instructing the expert. She sought various orders from the court.

Hollander QC reviewed the relevant caselaw and dealt with the following issues:

1) Was the claimant entitled to be involved in instructing the expert? The expert determination clause did not provide that the parties should give joint instructions, nor that the claimant should be entitled to make representations (nor did it require the expert to have any particular expertise). Although there are remedies if an expert goes outside his mandate, in general the court will not interfere at a time when the expert has not yet been appointed. (However, the court can intervene to resolve a non-hypothetical dispute as to the mandate of the expert at the outset in certain circumstances).

2) Should the defendant be ordered to disclose certain documents to the claimant and the expert? The judge held that no such order should be made. It was for the expert to determine which documents he needed - the disclosure here was really required by the claimant and she would not be entitled to pass those documents to the expert (because the disclosure would be subject to a collateral undertaking in the usual way).

3) It was up to the International Chamber of Arbitration in Milan to specify the expertise or profession of the expert. Furthermore, it is up to the expert to decide the procedure for the determination.

COMMENT: Weekly Update 27/11 reported the decision in Barclays Bank v Nylon Capital, in which the Court of Appeal found that the court could decide any dispute as to the jurisdiction of an expert, even if a clause purported to confer that jurisdiction on the expert. The judge distinguished this case from Nylon Capital on the basis that there was no "well-defined dispute" here which would fall to be determined in advance of the expert's appointment.

WXY v Gewanter & Anor

Application to set aside judgment following non-attendance at trial

The defendant applied under CPR r39.3 for an order setting aside judgment against him. He had failed to attend trial - he claimed because of a threat to the life/safety of his wife and family. His wife had received a photograph of herself with the words "we know - you have been warned" and she made an association between this and a photograph which she understood had been sent to a man who was conducting litigation involving someone close to the Claimant. That person had been murdered.

Slade J noted prior caselaw which has held that the court no longer has a broad discretion under CPR r39.3. Instead, it must be shown that the applicant has acted promptly, had a good reason for not attending trial and had a reasonable prospect of success at trial.

Although she found that the applicant had acted promptly (a delay of 3 weeks "in the context of a complex case" not amounting to a failure to act promptly), she found that the defendant failed on the other two grounds.

In relation to the threat, she found that there had been no advice from the police not to travel and the defendant had known that he could apply to participate in the hearing by video link. He had also made numerous unsuccessful applications to adjourn the proceedings. She found his true reason for non-attendance had been his unwillingness to face the claims against him.

Other News

On 21 May 2012, the Insurance Fraud Bureau published a press release announcing that it has launched a new insurance fraud register. The register will help insurers to identify fraudsters at the point of purchase: pdfs/ifb_appoints_andrew_buck_to_roll-out_insurance_ fraud_register.pdf

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.

Nigel Brook
In association with
Related Topics
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions