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

This week's caselaw

Cyprus Popular Bank v Vgenopoulos: Whether foreign freezing order can be enforced here before debtor appeal deadline passed

http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/QB/2016/1442.html&query=(vgenopoulos)

The claimant obtained a worldwide freezing order against the defendant in Cyprus and registered it as a judgment of the English court pursuant to EC Regulation 44/2001 (which applied as the order was obtained pre-January 2015). Of issue in this case was whether the freezing order then became immediately enforceable against a third party bank or whether it only became enforceable if no appeal was brought against the registration within the relevant two month period (or, if an appeal was brought, following the determination of that appeal). This was a novel issue which the English courts haven't addressed before.

Picken J concluded that the freezing order did not become fully enforceable and effective when the registration order was made. It would only become enforceable on determination of the defendant's appeal against registration. In reaching this conclusion, he placed reliance on Article 47(3) of the Regulation which provides that: "During the time specified for an appeal....against the declaration of enforceability and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures against the property of the party against whom enforcement is sought". The judge concluded that the claimant had sought to take "measures of enforcement" by serving the registration order and freezing order on the third party bank. However, the claimant had already achieved its objective of freezing the defendant's bank accounts. Accordingly, there was no need for the claimant to pursue "protective measures" (such as applying for a further freezing order from the English court). The claimant was therefore not entitled to serve the Cypriot freezing order on the third party bank pending the determination of the defendant's appeal against registration.

Bolt Burdon v Tariq: Successful claimant Part 36 offers and whether the uplift can be claimed on contractual interest

http://www.bailii.org/ew/cases/EWHC/QB/2016/1507.html

For Part 36 offers made on or after 1 April 2013, an uplift of 10% on the first £500,000 (and 5% of any amount above that figure, subject to a cap of £75,000) awarded by the court is now available to a claimant who betters its Part 36 offer. The claimant in this case bettered its Part 36 offer and the issue was whether it was entitled to the uplift on the contractual interest to which it was entitled and which it was awarded (here, the contractual interest was 8%).

Reference was made to an earlier High Court decision – Watchorn v Jupiter Industries [2014] – in which the judge refused to apply the uplift to the contractual interest element of the sum awarded. In this case, Spencer J held that he was not bound by that decision and said that the uplift could be applied to contractual interest (he declined to discuss the situation for discretionary interest). He also rejected the argument that it was unjust to award the additional amount here because the rate of contractual interest was far higher than the claimant's true costs of borrowing would have been. The judge said that: " The "additional amount" is clearly designed as a penal sanction to mark a defendant's failure to accept a Part 36 offer when he should have done, and to reward the claimant for a commendable attempt to settle the case. The make-up of the overall sum to which the prescribed percentage is applied is immaterial".

Salekipour v Parmar: Whether the county court can set aside an earlier county count judgment obtained by fraud

http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/QB/2016/1466.html&query=(salekipour)

The High Court has jurisdiction to set aside a judgment in earlier High Court proceedings on the ground that the judgment was obtained by fraud (although an appeal is the more common way to challenge a judgment obtained by fraud, a fresh action can also be started to set aside the judgment). The issue in this case was whether the county court has a similar jurisdiction.

The county court has no inherent jurisdiction. The judge reviewed the County Courts Act 1984 and concluded that the county court does not have any jurisdiction to rescind an earlier county court judgment.

(Re)insurance Weekly Update 24- 2016

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