Insurance Law Monthly

In Stonebridge Underwriting Ltd v Ontario Municipal Insurance Exchange [2010] EWHC 2279 (Comm) Christopher Clarke J discussed a jurisdictional conflict arising out of a reinsurance contract, between the English courts and the courts of Ontario. The court has upheld the now accepted approach that issues of law arising under a contract governed by English law (under English conflict of laws rules) should be determined in England.

In Orient-Express Hotels Ltd v Assicurazioni General SA [2010] EWHC 1186 (Comm), Hamblen J considered two issues of construction regarding the scope of cover under a property damage and business interruption policy in the aftermath of Hurricane Katrina. In his judgment the judge considered the limits of ‘but for’ causation, though ultimately this case did not fall outside those limits. The case is discussed by Nicholas Davidson QC and Shail Patel of 4 New Square.

Where two insurers both potentially face liability for a claim, and one of them makes payment, the law of contribution permits that insurer to seek full or partial reimbursement from the other. However, there is some doubt as to whether the paying insurer has the right to seek contribution or reimbursement when it has paid sums beyond its own legal liability. In SHC Capital Ltd v NTUC Income Insurance Cooperative Ltd [2010] SGHC 224 it has been held in Singapore by Chan Seng Onn J – consistently with the most recent English authority – that voluntary payment does not preclude a restitutionary claim.

Section 51(3) of the Senior Courts Act 1981 permits the court to order a non-party to pay the costs of the proceedings where it is just and equitable for such an order to be made. Insurers defending claims have often found themselves on the wrong side of such an order, on the basis that the decision to defend was theirs and the defence was for their benefit. In The Kamal XXVI, The Kamal XXIV and The Ariela [2010] EWHC 2531 (Comm) the issue was whether a costs order could be made against underwriters who had themselves been defrauded by their assured into bringing a subrogation action. That in turn raised privilege questions. On the facts Burton J felt that it was appropriate to order disclosure.