Dilatory English underwriters must watch out from next year

One of the most appalling rules of English insurance law finally bites the dust next year. The Enterprise Act 2016 received the Royal Assent earlier this month. From 4 May next year it inserts a new section (s.13A) in the Insurance Act 2015 finally allowing damages for late payment of insurance claims.

Quick overview: see our friends at Clyde & Co.

Detailed coverage: see The Insurance Act 2015: A New Regime for Commercial and Marine Insurance Law (ed M.Clarke & B.Soyer), ISBN: 9781138683303, Chapter 6 (by an author of this blog). Available from all good bookshops from August.

Double insurance and contribution, EU-style — where can you sue?

A decision last Friday from a deputy High Court judge which may raise the odd Euro-eyebrow: see XL Insurance Company SE v AXA Corporate Solutions Assurance [2015] EWHC 3431 (Comm) (available on BAILII).

Put simply, in 2008 there was a nasty railroad smash in California involving Connex. Connex’s insurer XL paid up to the victims. They then alleged that AXA, a French insurer, had insured the same risk and claimed contribution from it in London on the basis of double insurance. AXA applied to strike on the basis that, being French-based, it had the right to be sued in France under Brussels I Recast, Art.4. XL countered on the basis that this was a claim “relating to a contract” under Art.7(1), or one “relating to tort, delict or quasi-delict” under Art.7(2); in which case AXA could be sued in the place of performance or the place where the harmful act occurred as the case might be.

HHJ Waksman QC obliged by striking out.

This was not a claim relating to a contract, since although there were a couple of insurance contracts in the background, a claim relating to a contract involved a contractual duty of some sort obliging the defendant to render performance to the claimant: this wasn’t the case here. If anything, one insurer’s liability to contribute to the other’s payment is a claim in unjust enrichment. True, an EU Advocate-General had said exactly the opposite a couple of months earlier in Ergo Insurance v P & C Insurance Cases C-359 and 475/14 (see http://curia.europa.eu/juris/document/document.jsf?text=&docid=168543&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=281090), opining that this was a contract claim, with the place of performance being that of the underlying insurance policies. But the judge did not mince his words: he said that Adv-G Sharpston (incidentally an English ex-academic long since inveigled away by the good life in Brussels) did not understand the matter and was simply wrong.

Nor was this anything “relating to tort, delict or quasi-delict”. Taking the narrow view of this as requiring at least some degree of liability for wrongs (see Reichert v Dresdner Bank [1992] I.LPr. 404), it didn’t embrace contribution: no wrong was committed by one insurer not paying while another insurer did.

This all matters, if only because contribution claims can’t normally be subjected to a jurisdiction agreement. Put shortly it seriously raises the bar for those seeking contribution if their lawyers may potentially have to jurisdiction-hop anywhere in the EU to obtain their money. But the betting is strong that this isn’t the last word. Watch this space.

Insurance Fraud Pays – Professor Barış Soyer Wins BILA Book Prize

It has just been announced that Professor Soyer’s recent book “Marine Insurance Fraud” has won the 2015 BILA Book Prize. This prize, for the best book on insurance law, is awarded annually by the British Insurance Law Association Charitable Trust, a body existing to promote research on the interrelationship between law and insurance.

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BILA 2015 Prize for Professor Barış Soyer’s book “Marine Insurance Fraud”

The announcement was made at BILA’s Annual General Meeting on 16 October 2015. Alison Green, Chair of the BILA Charitable Trustees, congratulated Professor Soyer, not only for having written a highly relevant, interesting and accessible book, but also for being the only author to win the Prize twice (having first won the Prize in 2002 for his first monograph on warranties in marine insurance).

soyerHis most recent prizewinning monograph, published last year, gives a comprehensive and coherent legal analysis of the impact of fraud on the position of various parties to a marine insurance contract. At the time of publication it was seen as a winner. In the foreword, Sir Bernard Rix (formerly a Lord Justice of Appeal) stated: “Professor Soyer has written a book on an important and fascinating theme which not only states the law in a clear and concise way, but also analyses it critically, insightfully and helpfully. I am confident that it will be used profitably by a wide range of readers.”

Professor Barış Soyer is the Director of the Institute of International Shipping and Trade Law, a research institute based in the College of Law at Swansea University. He has taught marine insurance and other aspects of commercial law at Swansea for some 15 years.

Insurance and fraudulent claims

Hard on the heels of legislation in the Insurance Act 2015 about fraudulent claims by the insured, readers may like to know that insurers can now take comfort from s.57 of the Criminal Justice and Courts Act 2015 concerning third party dishonesty. Essentially where there is substantial dishonesty in or about an injury claim the entire claim falls to be dismissed, subject to a “substantial injustice” exception.

Andrew Tettenborn