UK: Insurance And Reinsurance - 5 February, 2013

Last Updated: 12 February 2013
Article by Nigel Brook

Nulty & Ors v Milton Keynes BC

Causation test when neither cause seems likely

Weekly Update 40/11 referred to the first instance decision in this case. The claimant alleged that a fire at its premises was caused by a self-employed engineer, who was insured by NIG. Edwards-Stuart J held that the insured had breached a notification condition and there was no appeal from that decision. The judge had also determined that the claimant had proved its case that the engineer had caused the fire. In so doing, he had held that neither possible cause of the fire (arcing from a disused cable or a cigarette end discarded by the engineer) seemed likely, but that the arcing possibility was no more than a remote possibility and was "very much less likely than" the cigarette explanation. He found that that was enough to discharge the claimant's burden of proof. The defendants appealed against that decision.

The Court of Appeal has found that the judge had reached the right result on the evidence but had applied the wrong legal test. In reaching this conclusion, the Court of Appeal referred to the The Popi M [1985] in which Lord Brandon rejected the proposition that once the impossible has been eliminated, what remains must be the cause (however improbable). There, the House of Lords concluded that in some cases, the result may be that no cause is proven on the facts.

Here, the Court of Appeal held that there is no rule of law that once all other possibilities have been eliminated, the one remaining possible cause must be correct. Furthermore, "The civil "balance of probability" test means no less and no more than that the court must be satisfied on rational and objective grounds that the case for believing that the suggested means of causation occurred is stronger than the case for not so believing". The balance of probability should not be expressed in percentage terms (eg more than 50% probability). The balance of probability in favour of a finding that the cigarette had caused the fire had been satisfied in this case, with the circumstantial evidence proving compelling.

Wall v Mutuelle de Poitiers Assurances

Governing law for an issue concerning expert evidence

The English claimant was injured in a car accident in France. He commenced proceedings in England against the other driver's French insurers (pursuant to the ECJ Odenbreit case). There was no dispute that the other driver had been negligent and judgment was entered in favour of the claimant. Damages fell to be assessed and the following issue arose: Does the issue of which expert evidence the court should order fall to be determined by reference to:

(a) the law of the forum (English law) because this is an issue of "evidence and procedure" (under Article 1.3 of the Rome II Regulation); or

(b) the applicable law (French law) because this is an issue relating to "the nature and the assessment of damage" (under Article 15 of Rome II)

It was not disputed that the Civil Procedure Rules (and, in particular, CPR r35) applied because rules as to expert evidence are plainly a matter of procedure. However, the insurers sought to argue that only one expert should be called (as is usual under French civil procedure), whereas the claimant asked for permission to call a number of experts, as is customary in English litigation of this kind. The judge concluded that he was not required to put himself in the position of a French court and decide the case as that court would have decided it (even though the English courts should try to reflect the level of damages which would have been awarded in France). He concluded that: "It is in my judgment clear that the questions of what expert evidence the court should order, and, in particular, whether or not there should be one (or more) single joint expert(s) pursuant to CPR r.35 are matters of procedure within Art 1.3".

Relfo v Varsani

Whether allegations of dishonesty justify freezing order/enforcement of worldwide freezing orders

Sales J made the following points in relation to this application for a post-judgment worldwide freezing order:

(1) Allegations of dishonesty against the defendant can, on their own, found an inference that there is a real risk of dissipation of assets. A risk had been proven here because the defendant failed to disclose all his bank accounts. It was also relevant that there had been a trial in this case and the court had found the defendant had participated in the dishonest removal of assets from the claimant

(2) Although it was appropriate to grant a worldwide freezing order here, that was on the basis that an undertaking be provided that leave from the English court would be sought to enforce the order outside England and Wales. Such an undertaking is common and the fact that this case concerned the grant of a post-judgment freezing order did not make any material difference

(3) It was common ground that the order should be time-limited and the judge held that a period of one year was appropriate (since it would take some time to enforce in different countries)

(4) In this case, it was appropriate to extend the normal order to include "assets purportedly held by the defendant as trustee or nominee". Here, the defendant's family was involved in "considerable mixing of funds and assets"

Gorbunova v Berezovsky

Whether application for freezing order should have been made on notice/alleged breach of undertaking to serve

The respondent argued that an application for a freezing order against him should not have been made without notice. Although it is a basic principle that an order should not be made against a party without giving him an opportunity to be heard, there are certain exceptions. These include situations where the matter is urgent or where the giving of notice would defeat the purpose of the order (because the respondent would take steps to remove assets once he has notice of the application).

Mann J rejected the argument that the application here had been made on the basis that it was urgent. Instead, the real reason for the without notice character was the risk of the order being defeated. On the evidence, he found that that reason had been justified here: the respondent was a "man under financial pressure" who might try to satisfy other creditors rather than the applicant. He also had a "propensity to go so far as giving dishonest evidence in pursuit of a claim" (in different proceedings), "coupled with his use of obscure offshore structures...which can easily be manipulated by him for his own purposes".

The applicant had given an undertaking to serve the order as soon as practicable. The order was obtained on 20 December but the injunction material was not served until 4 January 2013. The issue was whether the applicant should have served the eight different defendants as and when she could or whether she had been justified in serving them all simultaneously (it had taken her some time to track down/ affect valid service on some of the defendants). The judge agreed that all the defendants should have been served at the same time (and the order must have been made on that basis). The applicant could not have achieved such service any sooner than she had. Even if that was wrong, the delay in service was not so "egregious" as to justify a discharge of the order.

Singh v Yaqubi

Whether claimant needed replacement car - of possible interest to motor insurers

The claimant's Rolls Royce was damaged by the defendant's car and he hired a Bentley for five days and then a Rolls Royce for a further 6 weeks. He sought recovery of those hire charges. The claimant is a partner in a property development business and the car which was damaged was one of the business's fleet of seven vehicles. The Court of Appeal has held that he had to show "a reasonable need" for a replacement Rolls Royce during the period of repair. The first question which needs to be addressed is whether the claimant needed a replacement car at all. The Court of Appeal rejected the claimant's argument that that basic principle (established by Lord Mustill in Giles v Thompson [1994]) has been weakened by subsequent cases. Furthermore, need had to be proven by the claimant and could not be inferred by the judge. Once proven, the defendant would then need to prove that the need had been met in a reasonable manner.

It was held that the claimant had not proven his need for any replacement car. Pill LJ said "Very large hire claims such as this one should be scrutinised carefully by the court and particularly when the business partnership, which was required to establish the need, had a fleet of seven prestigious cars on the same insurance. For such a business claim to succeed, the judge was entitled to require specific evidence of need, such as evidence of the actual use of the vehicle for business purposes before the accident and the use to which the hired vehicle was put during the period of hire".

Phoenix Life Assurance v FSA

Interpreting insurance policies

This case turned on the interpretation of a particular with-profits policy. Of general interest are the comments made by Smith J on interpreting insurance policies. The defendant argued that in cases of conflict between the two, a policy schedule should prevail over the policy wording because the schedule is specific to the policyholder. Reference was made to a speech by Lord Bingham in The Starsin [2003] in which he said that "it is common sense that greater weight should attach to terms which the particular contracting parties have chosen to include in the contract than to pre-printed terms probably devised to cover very many situations to which the particular contracting parties have never addressed their minds" (emphasis added).

The judge found that in this case, that principle did not assist the defendant because particular conditions in the policy itself had been selected. Even though those conditions were "pre-printed terms" (and so excessive weight should not be given to their exact wording when interpreting their application in a particular contract), it did show that the operative conditions had not in fact been chosen in the policy schedule.

Henry v NGN

Costs budgeting and departing from the budget

On 1 April 2013, a raft of new measures set out in the Legal Aid, Sentencing and Punishment of Offenders Act will come into force. Amongst these are new requirements to exchange and file costs budgets in all multi-track cases (ie cases worth more than Ł15,000) commenced on or after 1 April 2013 in a county court, the Chancery or Queen's Bench Division (except the Admiralty and Commercial Courts) unless the court otherwise orders, and to any other proceedings where the courts orders.

However, costs budgets are already in use in certain types of cases, including defamation. In this defamation case, the court approved both sides' budgets and neither side sought approval to any revised budget. The case then settled but the parties could not agree costs and during detailed assessment proceedings, the respondent objected to the appellant's bill of costs on the grounds that it exceeded the budget.

The Court of Appeal has now handed down a judgment which will be of interest as it indicates the approach which courts might adopt in future on this issue. Although a court will not normally allow costs in an amount which exceeds the budget, there may be good reasons for departing from the budget. Moore-Bick LJ said that when considering whether there is a good reason, it is necessary to take into account not just all the circumstances of the case but also the objective of the costs budgeting regime (ie to to ensure costs remain proportionate and the parties are on an equal footing).

Here, the appellant's solicitors had failed to comply with the relevant practice direction but that didn't mean a departure from the approved budget had to be rejected. The Court of Appeal noted that the costs budget is not meant to act as a cap. Here, there was good reason to allow a departure because:

(1) the appellant's failure did not put the respondent at a disadvantage or cause it to incur unreasonable costs

(2) the respondent failed to comply with the practice direction and exceeded its budget too

(3) the court was less active than it should have been in monitoring expenditure, and

(4) the respondent failed to protest when first informed of the appellant's costs

Despite this outcome, Moore-Bick LJ cautioned that: "The primary function of the budget is to ensure that the costs incurred are not only reasonable but proportionate to what is at stake in the proceedings. If, as is the intention of the rule, budgets are approved by the court and revised at regular intervals, the receiving party is unlikely to persuade the court that costs incurred in excess of the budget are reasonable and proportionate to what is at stake".

Navig8 PTE v Al-Riyadh

Whether applications to hear jurisdiction challenge and summary judgment should be heard together html

It is only in very rare cases that a summary judgment application should be heard immediately after a jurisdiction challenge has been heard (ie that they should be listed to be heard together at the same hearing). This is because:

(1) if the jurisdiction challenge fails, the defendant should be given a chance to consider whether to contest the claim on the merits and participate in the English proceedings, and

(2) defendants shouldn't have to prepare for a hearing on the merits of a claim before their jurisdiction challenge has been heard

The claimant sought to rely on an earlier case where a court had proceeded immediately to determine an application for summary judgment after rejecting a jurisdiction challenge. However, Popplewell J distinguished that case on the basis that here there was a foreign defendant and permission was needed to serve out. Accordingly, the two applications were not listed together.

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
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.