UK: (Re)insurance Weekly Update 11- 2016

Last Updated: 29 March 2016
Article by Nigel Brook

A summary of recent developments in insurance, reinsurance and litigation law.

This week's caselaw:

British Gas Trading v Oak Cash & Carry: Relief from sanctions: Court of Appeal decides earlier breach can be taken into account where an unless order has been breached

The defendant failed to comply with an order to file a pre-trial checklist and listing questionnaire. An unless order was made and the document was filed 2 days late. The defence was therefore automatically struck out and judgment in default ordered. Relief from sanction was then granted to the defendant but this was overturned on appeal. A further appeal was then made to the Court of Appeal.

The Court of Appeal has now unanimously refused relief from sanction. Jackson LJ (the author of the original reforms requiring stricter compliance with the CPR and court orders) delivered the leading judgment. Referring to the test laid down in Denton v TH White (see Weekly Update 26/14), he explained that the breach here was serious. Although no reference should be made to "unrelated failures" (such as earlier breaches of orders unrelated to the unless order), "it is not possible to look at an unless order in isolation". It was added that "The very fact that X has failed to comply with an unless order (as opposed to an 'ordinary' order) is undoubtedly a pointer towards seriousness and significance", although not every breach of an unless order will be serious (eg where an unless order is breached by only a few minutes). Here, although the document was filed only 2 days later than the unless order deadline, the defendant had originally had three months to comply with the original order.

Nor was there a good reason for the delay. The wife of the solicitor conducting the matter had been ill, and illness was given as an example of a good reason in the Mitchell decision (see Weekly Update 43/13). However, that was countered here by the facts that the illness was not sudden and that the solicitor's firm was of a "significant size", with over 40 solicitors, and so appropriate cover should have been arranged (the solicitor had also attended the office and reviewed the file before the unless order was breached).

Finally, Jackson LJ confirmed that he was bound by the majority decision in Denton that, when considering all the circumstances of the case, the two factors set out in CPR r3.9 (that litigation must be conducted efficiently and at proportionate cost and that compliance with rules and orders must be enforced) must be given greater weight than other considerations. Here, the lack of promptness by the defendant in bringing the application for relief was the critical factor, as it had disrupted the progress of the action.

Littlestone v Macleish: Court of Appeal decides whether a Part 36 offer was beaten when an admission and payment was made during the relevant period

The defendants made a Part 36 offer to pay the claimants £35,000, in full and final settlement. Before the expiry of the relevant period they admitted liability for part of the claim and paid £17,500. The claimant was eventually awarded £48,400 in damages at trial. Allowing for interest at the end of the relevant period, the claimants would not have beaten the defendants' offer if the offer plus the payment on account are aggregated.

The defendants argued that there should be aggregation, because of the provision in the rules which provides that a defendant's offer which is accepted must be paid within 14 days. Since there was no agreement to the contrary, it was argued that the defendant would have been obliged to pay the full £35,000 if the claimant had accepted the offer after being paid £17,500.

That argument was rejected by the Court of Appeal. The Part 36 offer had been an offer to settle the entirety of the claim for £35,000. Nothing in the correspondence about the admissions payment made any reference to the Part 36 offer. Accordingly, the £17,500 was a part payment in advance of the £35,000: "an admitted payment on account of a claim, following a Part 36 offer in a higher amount must, in the absence of any agreement to the contrary, be taken as being made as much on account of the Part 36 offer to settle the claim as it is made on account of the claim itself".

Accordingly, the claimants had beaten the defendants' offer.

The Court of Appeal acknowledged that this decision conflicts with an earlier Court of Appeal case, Gibbon v Manchester City Council (see Weekly Update 25/10). It was held that comments by Moore-Bick LJ in that case were only obiter and the case is not authority for a general principle as to the relationship between a Part 36 offer and a subsequent payment following admission. It was also a debt, not a damages, claim (and it was said that there may be other distinguishing features in the case which were not reported). However, should it be necessary to do so, the Court of Appeal held that it would differ from Moore-Bick LJ's views.

ABC v Barts Health NHS Trust: Whether it would be unjust to award the usual costs consequences where a defendant's Part 36 offer was accepted

Where a Part 36 offer is accepted after the end of the relevant period, the usual costs consequences are that the claimant gets its costs up to the end of the relevant period and the offeror then gets its costs up to the date of acceptance. However, if the court considers that this position would be "unjust", it can depart from it.

Here, the defendant's offer to settle the whole claim was accepted a couple of weeks before trial and some 8 months after the end of the relevant period. The defendant argued that it would be unjust to apply the usual costs consequences because it had admitted liability for certain issues but the claimant had failed in relation to the vast majority of his pleaded claim. That argument was rejected by McKenna HHJ. He commented that: "the court's discretion to depart from the usual order is constrained by the precondition that its full enforcement would be unjust. It follows, it seems to me, that the discretion is more circumscribed than the broad discretion under CPR 44.2. Moreover, the specific considerations identified in CPR 36.17(5) have this common feature that they focus analysis on the circumstances of the making of the offer, the provision or otherwise of the relevant information in relation to it rather than more general issues as to conduct although I remind myself that the requirement to take into account all the circumstances does enable the court to take a broader view and to consider the various matters relied upon by the Defendant". 

He added that the defendant should have protected himself by making its offer in relation to only one of the pleaded issues, rather than the whole claim. Furthermore, although the claimant had been unreasonable in initially rejecting the offer and then pursuing the claim up to shortly before trial, the rules provide a remedy for that situation, in that the claimant will have to pay all the defendant's costs incurred after the end of the relevant period on the indemnity basis.

Integral Petroleum v Melars: Court of Appeal considers scope of court's discretion under section 67 of the Arbitration Act 1996

The applicant challenged an arbitral award on the basis that the tribunal was in error in finding that it lacked substantive jurisdiction (pursuant to section 67 of the Arbitration Act 1996). Section 67(3) provides that the court may confirm the award, vary it or set it aside (in whole or in part). In this case, the judge had found that the tribunal's jurisdiction award was wrong but he declined to grant any relief (on the basis that it was clear that the tribunal would have rejected the claim anyway, and so the jurisdiction error was inconsequential).

The judge refused permission to appeal and the applicant applied for permission to appeal to the Court of Appeal. The Court of Appeal has now refused that application.

It was held that section 67(3) does not prevent a judge from making no order on an application (although cases of no relief being granted following a well-founded application are rare). Longmore LJ commented that: "It would be absurd to suppose that if the arbitrator had expressly held that, if he had had jurisdiction, he would still have dismissed the claim, the court still had to either confirm or set aside the award".

In any event, an appeal can only be brought if the judge himself has given permission to appeal. Section 67(4) makes it clear that the Court of Appeal cannot give permission to appeal.

(Re)insurance Weekly Update 11- 2016

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.