UK: Insurance And Reinsurance Weekly Update - 9 December 2014

Last Updated: 16 December 2014
Article by Nigel Brook

Welcome to the forty-fifth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2014.

These updates are aimed at keeping you up to speed and informed of the latest developments in caselaw relevant to your practice. Please follow this link for further details of the following recent cases:

This week's caselaw

  • XYZ v Various
    A case on whether an insurer could be joined to proceedings against an insolvent insured.
  • Misland (Cyprus) v McKillen & Anor
    Court decides whether there must be a genuine claim against an "anchor" defendant under Regulation 44/2001.
  • Hampshire Constabulary v Southampton City Council
    When does time start to run for a contribution claim where a Part 36 offer is accepted?
  • Dufoo v Tolaini
    The Court of Appeal comments on "near-miss" offers.
  • Bradbury v Paterson
    A case on the position where the Official Solicitor ceases to act as a litigation friend.

XYZ v Various

Whether insurer could be joined to proceedings against insolvent insured

Weekly Update 43/13 reported an earlier decision in this group litigation. One of the defendant companies was technically insolvent and so the claimants had sought an order that the company provide information about the nature and extent of its insurance arrangements. The judge had ordered the company to provide a witness statement setting out whether it has adequate insurance to fund its participation in this litigation to the completion of the trial and the conclusion of any appeal.

In this case the insurers of one of the other defendant companies sought to join the insurers of the insolvent company to the proceedings in order to obtain a declaration against it. Their stance was that, sooner or later, the insolvent company's insurers would be brought into the litigation and it was sensible that that should happen now, as the more insurers who are involved in negotiations the greater the likelihood of an early resolution of these claims.

That argument was rejected by Mrs Justice Thirlwall DBE. CPR r19.2 did not apply because all the matters in dispute in the proceedings could be resolved without the addition of the insolvent company's insurers. Furthermore, the scope of insurance cover provided to the insolvent company was not "connected to" the group litigation. The insolvent' company's liability to the claimants was quite separate from its insurance position.

As the judge put it: "However attractively packaged this application may be it is an attempt by [the other defendant and its insurers] to establish in advance the depths of another insurer's pockets. If ....correct, CPR 19.2 (2)(b) would entitle a claimant in a personal injury case to join into proceedings a defendant's insurers, seeking a declaration as to the scope of the insurance available to meet the claim. This would cut across years of jurisprudence to the effect that a claimant must take the defendant as he finds him". The situation would have been the same had the other defendant's insurers sought to bring a Part 20 claim against the insolvent company's insurers (who might then have sought to sever the claim).

COMMENT: Had this application succeeded, it would have effectively bypassed the provisions of the Third Parties (Rights Against Insurers) Act 1930, which provides that an action may be brought against an insurer only after judgment is first obtained against the insolvent insured. However, as previously reported, it is expected that this position will change if and when the Insurance Act is passed next year and the 2010 Third Party (Rights Against Insurers) Act is brought into force later in 2015.

Misland (Cyprus) v McKillen & Anor

Whether there must be a genuine claim against an "anchor" defendant under Regulation 44/2001

Article 6(1) of Regulation 44/2001 provides that a person may be sued, where he is one of a number of defendants, in the courts for the place where any one of them is domiciled (provided the claims are so closely connected that there would otherwise be a risk of irreconcilable judgments resulting from separate proceedings).

In this case, the "anchor defendant" is domiciled in England but an Irish defendant sought to argue that Article 6(1) did not apply because the anchor defendant was only a nominal defendant and there was no genuine claim against it. The claimant countered that under Article 6(1), the merits of the claim against the anchor defendant are irrelevant.

There is conflicting authority on this point. Two leading textbooks support the need for a genuine claim, as did Carr J in the case of Sabbagh v Khoury [2014]. However, the claimant argued that the earlier case of Joint Stock Company "Aeroflot Russian Airlines" v Berezovsky [2013] was authority for the position that the merits of the case against the anchor defendant are irrelevant.

In the event, Behrens HHJ was not required to decide the issue because he found that the anchor defendant was not a nominal defendant on the facts. However, he did opine that: "I am far from convinced that Carr J was wrong". Accordingly, his provisional view was that if he had not been satisfied as to the genuineness of the claim against the anchor defendant here, he would have held that Article 6(1) did not apply.

Hampshire Constabulary v Southampton City Council

When does time start to run for a contribution claim where a Part 36 offer is accepted?

A third party had brought a personal injury claim against the claimant. The claimant made a Part 36 offer and that was accepted on 4th November 2010. The claim was therefore automatically stayed and a consent order was made on 15th December 2010 (with costs to be agreed). A costs order was subsequently made in September 2011. In January 2012, the claimant's solicitors wrote to the defendant's insurers claiming contribution from the defendant. Proceedings were commenced by the claimant against the defendant on 3 December 2012.

The Civil Liability (Contribution) Act 1978 provides, broadly, that a contribution claim must be brought within 2 years of the date of a judgment in any civil proceedings (section 3 of the Act) or, in any case not falling within section 3, the date on which an amount to be paid is agreed (section 4 of the Act). At first instance it was held that the contribution claim was time-barred because time had started to run when the Part 36 offer was accepted. The claimant appealed and the Court of Appeal has now held as follows:

  1. This case fell under section 4, and not section 3, of the Act. There had been no "judgment" and the consent order did not constitute a "judgment". Indeed, it was noted that "one of the benefits for a defendant who settles is, at least in the normal run of cases, that he avoids any adverse judgment of the court".
  2. Section 4 is focused on the sum paid for the actual damage caused. It does not cover costs, which might be agreed (as they were here) later on. Accordingly, the judge had been correct to hold that time had started to run when the Part 36 offer had been accepted, and the contribution claim was time-barred.

Dufoo v Tolaini

Court of Appeal comments on "near-miss" offers

Weekly Update 43/14 reported the decision in Sugar Hut v AJ Insurance, in which Eder J agreed that the courts should not re-introduce a "near miss" rule following the reversal of Carver v BAA (see Weekly Update 17/08), but went on to distinguish the case on its particular facts (the "near miss" rule stems from the decision of Multiplex Construction v Cleveland (see Weekly Update 40/08), in which Jackson J held that if a party makes a Part 36 offer, or an admissible offer within Part 44, which is "nearly but not quite sufficient" and the other party rejects the offer outright without any attempt to negotiate, then it might be appropriate to penalise the other party in costs).

In this Court of Appeal case (concerning the court's discretion under Part 44), Jackson LJ took the opportunity to comment on his decision in Multiplex. He noted that many recent judgments have taken his discussion of the principles governing the court's discretion under Part 44 as a starting point and he therefore emphasised that his comments regarding near miss offers "should now be disregarded".

Bradbury v Paterson

Position where Official Solicitor ceases to act as a litigation friend

The defendant is a consultant being sued by former patients. The Medical Defence Union is his defence organisation and it took out an insurance policy for its members to fund their defence costs. However, the policy in question in this case did not cover the defendant for the claims being made against him. The defendant's health deteriorated and a psychiatric report supported the view that he lacked capacity to give instructions in the litigation. Accordingly, the Official Solicitor was appointed as his litigation friend. However, the Official Solicitor applied to court for an order discharging him as the litigation friend because of the withdrawal of funding. An order was made staying the claim until such time as a new litigation friend has been appointed (hence effectively bringing the whole litigation to a stop) and an appeal was brought against that order.

Foskett J held that the court did have power to terminate a litigation friend's appointment without first identifying a suitable substitute. Furthermore, "the position of enforced continuation as a litigation friend would undoubtedly be unwelcome and uncomfortable". Nor is the consent of any person to act as a litigation friend irrevocable. It was also not possible to force the MDU to fund the Official Solicitor.

The judge went on to discuss potential avenues for securing the funding of the Official Solicitor and held that the case should be transferred to the Court of Protection (where it could then be decided if the defendant did indeed lack capacity), and he ordered payment to be made by the co-defendants in order to "kick start the process". The litigation itself remained stayed for 8 weeks (after which an application could be made to have it lifted).

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.