UK: Insurance And Reinsurance Weekly Update - 5 August 2014

Last Updated: 11 August 2014
Article by Nigel Brook

Lim (an infant) v Walia

Court of Appeal decides whether deceased had severable interest in life insurance policy benefit/insurers' duty to exercise discretion reasonably

The claimant, whose mother had died, applied under the Inheritance Act 1975 for an order that the court re-distribute assets from her estate. The deceased had taken out a joint life insurance policy with her husband. The policy provided that the insurer would pay out on the first death of the couple and also that "on proof to the [insurer]'s satisfaction that the life insured is suffering from a terminal illness, we will bring forward the payment of the sum insured".

The deceased separated from her husband (but was never divorced from him). She formed a relationship with another man and gave birth to their son in 2009. She was diagnosed with a terminal illness in February 2011 and died the following month. The insurers paid the insurance proceeds to her husband in May 2011, triggering this application to the court. The claimant sought to rely on section 9 of the 1975 Act which provides that if a deceased was "immediately before his death beneficially entitled to a joint tenancy of any property", the court can order that the value of that severable share of property immediately before death be treated as part of the deceased's estate.

At first instance, it was held that immediately before her death, the deceased had been beneficially entitled to a joint tenancy of the terminal illness benefit under the policy. On appeal, McCombe LJ (dissenting) agreed with that conclusion. He noted that an insurance policy and its proceeds are a chose in action and so the deceased had had an interest in the policy from its inception. He went on to hold that the deceased had had a severable share in the right to claim the terminal illness benefit at the moment immediately before death and the fact the money was paid by the insurer for another reason (i.e. death) did not negate the existence of that share for the purpose of section 9. He also referred to the policy condition that a claim had to be established to the satisfaction of the insurer and said that that "must be taken to mean its reasonable satisfaction; the insurer could not have rejected a claim out of whim or caprice".

However, the other two Court of Appeal judges disagreed with the conclusion of McCombe LJ and the judge at first instance on section 9. Arden LJ said that it was correct to say that the deceased had had a severable interest in the terminal illness benefit. However, in this case, no claim had been made for the terminal illness benefit before death and therefore "the insurer was justified in paying the death benefit to the appellant. So the value of the severable interest in the terminal illness benefit immediately prior to death was nil". McFarlane LJ agreed. Here, there had been only one sum to be paid out (either on death or on proof of terminal illness): "There were not two sums, each with a realisable value...... If payment of the sum insured was not brought forward to a time before the first death, then the deceased's severable interest in the right to make a claim to bring it forward (the terminal illness benefit) evaporated and was of no value".

Accordingly, the appeal was allowed and the deceased's husband was allowed to keep the insurance proceeds.

Travis Coal v Essar Global

Whether ICC arbitration award could be enforced after "summary judgment" by tribunal

The claimant applied to enforce an ICC arbitration award in its favour. After judgment was entered by the English court, the defendant applied under section 103 of the Arbitration Act 1996 for an order setting aside the judgment, or an adjournment of the decision on recognition and enforcement of the award, pending the determination of proceedings being brought in the US (challenging the award). The claimant challenged the award on the grounds of due process and breach of agreed procedure.

Blair J rejected the argument that (in the absence of an express power) a summary judgment process by arbitrators necessarily amounts to a denial of due process. In any event, he held that the tribunal had had the power to adopt this procedure. The arbitration agreement had provided that the arbitrators could hear any dispute "in accordance with such procedure as the arbitrators may deem appropriate" and this gave them a wide power. Furthermore, the 2012 ICC Rules also allows tribunals to adopt such procedural measures as they consider appropriate, whilst also ensuring that each party has a reasonable opportunity to present its case. The judge held that there had been such an opportunity in this case, since oral testimony had been received: "so far as it was summary, the procedure fell within [the arbitration agreement]".

Tchenguiz v The SFO

Whether disclosed documents could be used in separate proceedings overseas

Weekly Updates 28/14 and 16/14 have set out the background to this case. The defendant, the Serious Fraud Office, disclosed certain documents to the claimant, who now wishes to use those documents in a pending appeal in separate proceedings in Guernsey. The permission of the court was needed to use the documents in that way. Eder J acknowledged that the documents in question were potentially relevant and that the claimant's desire to use the documents went beyond his own private interests because there was a very strong public interest in discovering the truth. Nevertheless, he refused permission for the following reasons:

(1) The English court should not leave the evaluation of the likely significance of the documents entirely to the Guernsey courts. The evidence before the judge suggested that the documents in question were far from being "crucial" or "decisive" to the Guernsey proceedings.

(2) It was also a "very weighty consideration" that the documents contained information relating to a criminal investigation carried out by the SFO (including the methodology employed by the SFO and its interaction with the Guernsey authorities). There was a very strong public interest against permitting the use of such documents for collateral purposes.

(3) Similarly, the documents were provided by the Guernsey authorities pursuant to a specific request from the SFO for mutual legal assistance. There is a public interest in not jeopardising the willingness of foreign states to cooperate in respect of similar criminal investigations in the future.

Symes v St George's Healthcare

The effect of a default judgment in a negligence case/whether causation can be contested

The claimant obtained default judgment against the defendant in a clinical negligence case. The order provided that "No acknowledgment of service having been filed, it is ordered that the defendant must pay the claimant an amount which the court will decide, and costs". The master subsequently held that the matters pleaded in the particulars of claim should stand as conclusive on the issue of causation of the losses claimed and the defendant appealed against that decision.

The judge reviewed the relevant caselaw and concluded that there is no bar to a defendant challenging causation in the face of a judgment in default where damages have been ordered to be assessed. It does not matter that the claimant's statement of case alleges that particular losses were caused – the defendant can argue that, whilst "some damage" was caused, it was not the damage alleged by the claimant in his statement of case.

Here, the defendant had not just accepted that "some damage" had been caused by its negligence, but also that it had caused some of the actual damage which the claimant had alleged in the particulars of claim. Accordingly, unless it can be said that the default judgment represents a decision that all of the damage alleged by the claimant was suffered by him as a result of the defendant's negligence, then it must be open for the defendant to advance its causation objections to the other aspects of damage alleged by the claimant. The judge confirmed that here the default judgment did not cover all the damage alleged in the particulars of claim.

Nor had the defendant acted in breach of the CPR by not serving a defence setting out its case on causation. A defendant is not required to set out its case on causation in the defence because it can advance that case in the context of the assessment of damages process. However, the judge did note that it "would have been more sensible" here to have served a defence.

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.