UK: (Re)Insurance Weekly Update 21- 2018

Last Updated: 21 June 2018
Article by Nigel Brook
Most Read Contributor in UK, November 2018

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

Edwards v Hugh James Ford Simey: Court of Appeal rules on assessing damages in a professional negligence case

http://www.bailii.org/ew/cases/EWCA/Civ/2018/1299.html

It was alleged that the defendant firm of solicitors had negligently advised the original claimant in this action to abandon an incremental claim under a scheme to compensate former miners suffering from a condition known as vibration white finger. The key issue in this case was whether the recorder had erred in taking into account evidence which had not (and could not have) been available at the time of the settlement in this case when assessing the claimant's loss (namely, a 2013 report of a jointly instructed expert who had assessed the severity of the deceased's condition as being lower than that reported in a medical assessment process report produced in 2003 (the year in which the claim settled)).

The Court of Appeal started from the basic principle that where negligence by lawyers has prevented a claim being brought (or has led to an under-settlement), the measure of loss is the difference between what the claimant got and what it would have got, absent the negligence. If the value of the original lost claim cannot be assessed as hopeless or cast-iron, the court must assess a percentage prospect of success as applied to what would have been recovered if the original claim had been recovered in full. The Court of Appeal pointed out that "the court is seeking to establish what was lost by the claimant, as at the date, often the notional date, of the original trial or settlement".

Where "relevant after-coming evidence" would and should have been available at the notional trial date, had the litigation been competently conducted, it can be taken into account when assessing loss. However, where, as here, the after-coming evidence would not have been available, it cannot be taken into account. It is possible to depart from that basic principle in exceptional circumstances though: "In my view there must be a requirement for a significant or serious scale to the consequences of the supervening event, before it should be permitted to establish an exception to the normal principle. Unless there is some such threshold, there will be a continuing pressure to admit fresh evidence which would not have been available at the original notional trial, on all aspects of such cases, dependent on the energy and resources of the parties to the professional negligence action and their insurers".

Accordingly, the recorder had erred and the case was remitted for a rehearing.

P v Q: A case on extending the time limit to commence arbitration

http://www.bailii.org/ew/cases/EWHC/Comm/2018/1399.html

The parties in this case were parties to back-to-back voyage charters, and the arbitration clause in the charters provided that any claim "must be notified in writing to the other party and claimant's arbitrator appointed within 13 months of the final discharge of the cargo and where this provision is not complied with, the claim shall be deemed to be waived and absolutely barred".

Notice of a claim from a party higher up the chain was not received by one of the parties (P) until after the expiry of the 13 month period (although it was arguably sent to P just before the end of that deadline). P sought to claim in turn against Q, but Q argued that that notice of that claim (and the notice of commencement of arbitration) had been made too late and so the claim was deemed waived. The judge, Sir Richard Field QC, agreed that notice had been given too late and rejected an argument that the clause had to be read so as not to apply where it was impossible for a claim to be passed on within the stipulated time: "The parties desire the benefits that flow from a literal construction of the time bar because, whilst they also have an interest in passing on claims up or down the chain, that is only in so far as they are exposed to claims made in accordance with the time bar. The interest in passing on claims is no reason for giving the clear words of the clause a qualified meaning".

The judge did not decide the further question of whether, even if the court extended the time to commence arbitration (see below), notification of the claim was a step that was separate and distinct from the commencement of arbitration, and so the claim would have still been time-barred.

The judge also considered P's application under section 12 of the Arbitration Act 1996 for a sufficient extension of time for commencing arbitration to validate the notice of arbitration served on Q. The judge approved the observations of Hamblen J in SOS Corporacion v Inerco (see Weekly Update 06/10) that the court should start from the assumption that when the parties agreed the time bar, they must be taken to have contemplated that if there were any omission to comply with its provisions in "not unusual" circumstances, the claim would be time barred (unless the conduct of the other party made it unjust).

In this case, the judge held that the fact that P had only received notice of a claim after business hours on the last day of the time limit (and so could only serve its own notice to commence arbitration out of time) was outside the reasonable contemplation of the parties and was not something that was merely "not unusual". However, he also went on to consider if it would be just to give the extension and as P had not acted expeditiously after receiving the notice (it had not, for example contacted its legal department for urgent advice), he concluded that it would not be just to grant the application to extend time.

COMMENT: In the Inerco case, the judge had also concluded that the fact the claim had not been reasonably discoverable before the expiry of the time limit was more than merely "not unusual" (although there could be exceptional cases where that situation was within the reasonable contemplation of the parties). However, he went on to find that delay after discovery of the loss/claim by the claimant meant that it would not be just to extend time under section 12. Accordingly, parties wishing to bring a section 12 application need to act quickly after discovering a loss or claim.

Liberty Mutual Insurance Europe Plc, Re: Court allows a merger between an English company and the Luxembourg company which it created, to create an SE

http://www.bailii.org/ew/cases/EWHC/Ch/2018/1445.html

An English company underwriting (re)insurance from its office in London and its branches across Europe wished to prepare for Brexit by becoming a Societas Europaea (an "SE"). (An SE is a European public limited company which can be created in any EEA state. It must be treated as if it is a public limited company (some countries even require the head office and the registered office to be at the same address)).

The English company set up a new company, incorporated in Luxembourg, with the intention that it will merge with the Luxembourg company to become an SE (at which point the Luxembourg company will cease to exist under the relevant EU Regulation). In accordance with that Regulation, a notary public in Luxembourg has certified that the pre-merger acts and formalities in relation to the Luxembourg company have been completed.

The English court is therefore required under the Regulation to scrutinise the legality of the merger "as regards the part of the procedure concerning the completion of the merger and formation of the SE". Morgan J queried whether he should be concerned that the Luxembourg company had been specifically formed in order to allow the applicant to use the merger provisions and become an SE. He concluded that this did not present a problem: "I considered that even if the involvement of [the Luxembourg company] was merely a means to enable the Company to produce the intended result under the Regulation, the steps which had been taken and which would be taken came within the ambit and terms of the Regulation and did not infringe the principle of abuse of rights in accordance with the European jurisprudence".

Accordingly, he held that the English and Luxembourg companies are free to take steps to bring the proposed merger and creation of an SE into effect.

JSC BTA Bank v Ablyazov & Anor: Court orders respondent to worldwide freezing order to disclose how his legal expenses are being funded

http://www.bailii.org/ew/cases/EWHC/Comm/2018/1368.html

The claimant bank obtained a worldwide freezing order ("WFO") against the first defendant (Mr Ablyazov) and the second defendant, in order to restrain dealings which would prevent the claimant from recovering assets to satisfy earlier judgments which it had obtained against Mr Ablyazov.

The WFO contained the usual provision that the second defendant could spend a certain amount on legal advice and representation, "But before spending any money the Respondent must tell the Applicant's legal representatives where the money is to come from". The second defendant has spent a substantial amount on legal expenses and told the claimant that his mother was funding those expenses. The bank suspected that his mother was in turn being funded by Mr Ablyazov (out of frozen assets) or that the second defendant was using his own concealed assets . It therefore applied for an order that the second defendant provide full and proper disclosure about how his legal expenses were being funded.

The judge held that the appropriate test for such an order is that that there are "adequate grounds" for making the order and that prior caselaw had required only a real (and not fanciful) risk of a breach of the WFO. She summarised that "Whilst, in principle, the Court will be alert to the need to police its own orders effectively, it must also be astute to prevent a WFO becoming an instrument of oppression".

In evaluating that risk, the court is entitled to take into account the substance of the underlying evidence as set out in prior judgments (although it cannot rely on a bare finding of a court in a matter to which the second defendant was not a party). She held that Okritie v Gersamia [2015] had not established a wider approach that the court can arrive at the same conclusions of an earlier court without exercising its own judgment.

On the facts, the judge concluded that it was not oppressive for the second defendant to be expected to provide the disclosure that was sought: "Whilst it may be that the response that will be obtained is that [the second defendant] does not know and his mother refuses to tell him from where she is sourcing the funds, if that is the answer it will be open to the [claimant] to test that answer in cross-examination".

On a more general note, in a case which is frequently before the courts, the judge cautioned against parties assuming "that successive judges can somehow magically acquire, as if by osmosis, the knowledge of the case which those judges who have dealt with it on previous occasions have acquired. Both sides need to remind themselves of the importance of encapsulating, in a manageable form, everything that is necessary to a given decision, by a given judge, on a given occasion".

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 Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Nigel Brook
Similar Articles
Relevancy Powered by MondaqAI
Clyde & Co
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Clyde & Co
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions