UK: A Summary Of Recent Developments In Insurance, Reinsurance And Litigation Law: 19 April 2010

Last Updated: 23 April 2010
Article by Nigel Brook

Cecil & Ors v Bayat & Ors

Test for service out

The defendants applied to set aside service of proceedings. Three questions of law were disputed between the parties:

  • Whether the "Canada Trust gloss" should be applied. The claimant must show (1) that each cause of action in respect of which he claims stands a reasonable prospect of success and that (2) he has a "good arguable case" that the claim falls within the jurisdictional gateways now set out in Practice Direction 6B.

    In Canada Trust [1998], Waller LJ said that the test for "good arguable case" meant that one side had a "much better argument on the material available" (the so-called "Canada Trust gloss"). The use of the test in all circumstances has been doubted in subsequent cases. However, in this case, Hamblen J, whilst recognising the difficulties that the test posed, said he was nevertheless obliged to follow the Court of Appeal case of Sharab v Al Saud [2009] and apply the Canada Trust gloss. He said he considered that the test was who has the better argument (although in this case he applied the test of who has "much" the better of the argument). He did not rule on a further (novel) argument that the Canada Trust gloss should not be applied where there is no available alternative appropriate forum;
  • Can grounds of jurisdiction other than those clearly identified at the permission stage be relied upon? Hamblen J said they could not, but he was prepared to exercise his discretion to cure this defect because the gateway relied on was at least referred to in the claimants' evidence and the claimants' reliance upon different gateways turned on matters of argument rather than of evidence; and
  • The scope of claims "in respect of " a contract under PD 6B. The claimants tried to argue that all they needed to show was "a connection with" a contract falling within the criteria of PD 6B para 3.1(6) a) to d) (eg a contract governed by English law or which is made within the jurisdiction). This argument was rejected by the judge: "In my judgment, at least on respect of contractual claims, some relevant legal connection between the claim and the other contract is required. If that contract needs to be referred to and relied upon in order to assert the relevant cause of action then that requirement is likely to be satisfied since it will be a necessary part of the cause of action. However, a mere factual connection between the two contracts is not enough".

SAB Miller & Anor v East African Breweries

Whether parties had expanded section 44 of the Arbitration Act 1996 ("the Arbitration Act")

Section 44 of the Arbitration Act grants the English courts powers which are exercisable in support of arbitral proceedings (including the granting of interim injunctions). Section 44 is not mandatory and can be excluded by the parties. In this case, it was argued that the parties had not excluded section 44, but instead had agreed to confer wider powers than section 44 allowed (eg the parties could apply for interim or final injunctive relief). At first instance the judge granted an interim injunction and refused leave to appeal (section 44 provides that the leave of the judge (and not the Court of Appeal) is required for any appeal from the judge's decision). The appellant argued that section 44 did not apply and therefore the Court of Appeal could give leave to appeal. Two judges heard the appeal.

They both concluded that the Court of Appeal did not have power to grant permission to appeal but for differing reasons.

Laws LJ, although agreeing that the relevant clauses in the agreement between the parties appeared to refer to powers wider than those conferred by section 44 "they are not worded so as to confer power. They are worded so as to make it clear that existing powers are preserved". He said that although there is no reference to a final injunction in section 44, "there may be cases in which justice requires an order to be made under section 44 which has final dispositive effect even though in form it is an interim order".

Sir David Keene held that it was not in dispute that the application in the court below was made under section 44 and that the judge's order was made under that provision. Accordingly, only the judge could grant leave to appeal. Arguments about the exact scope of the provisions in the agreement were "less clear-cut" and he was inclined to the (not conclusive) view that they did confer wider substantive powers.

The judges also refused to comment on the "unresolved debate as to the co-existence of precise relationship" between section 44 and section 37 of the Senior Courts Act 1981 (which confers on the High Court a general power to grant an interim or final injunction).

Silvera v Bray Walker & Anor

Pre-2005 CFAs and the need to briefly specify reasons for the percentage increase

This case involved the interpretation of regulation 3(1)(a) of the 2000 Conditional Fee Agreements Regulations (now revoked but only with effect from 1 November 2005). This regulation provided that where a CFA provided for a success fee, it must "briefly specify" the reasons for setting the percentage increase at the level stated in the agreement. (This case was unusual in that the challenge to the CFA was being brought by the client himself and not the insurers of a party successfully sued by the client). The Court of Appeal ("by the narrowest margin") agreed with the judge that there had been no literal breach of the regulation: "I consider that there is a sufficient flexibility within the word "briefly" to allow the background render the requisite specification extremely brief". The solicitors had relied on the terms of the Law Society's model agreement and had not inserted any other reasons - however general, these were nevertheless the reasons.

Even if there had have been a literal breach, there had been no material breach, as required by the Court of Appeal in Hollins v Russell [2003] (which had held that the CFA remains enforceable unless the breach would have "a materially adverse effect either upon the protection afforded to the client or upon the proper administration of justice".

Higgins v Ministry of Defence

Whether claimant reasonable to instruct London lawyers

The defendant appealed against an order of Master Campbell whereby it was ordered to pay the hourly rates applicable to a Central London firm of solicitors. It was argued that the claimant could have instructed local solicitors in Kent of equal competence and this would have attracted far lower hourly rates. The claimant was 82 and had incurable lung cancer and Master Campbell held that it was not reasonable to expect him to "undertake a trawl of local solicitors" when an experienced consultant had given him the name of the Central London solicitors who specialised in this field. The defendant argued that the age of the claimant and the urgency of the case were not factors referred to in previous cases.

Tugendhat J said that lists of factors set out in previous cases were not of general application (although they are useful). He saw no error in the exercise by Master Campbell of his own judgment. However, a reasonable litigant will normally be expected to investigate the hourly rates of solicitors whom he might instruct and to consider a number of factors such as the time and costs associated with geographical location. He must keep down the costs of litigation and so, if he instructs London solicitors for a case which has no obvious connection with London (and he does not require expertise which can only be found there) he may not be able to recover costs on the basis of those solicitors' hourly rates.

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.