Insurance Law Monthly

In Johnston v Endeavour Energy [2015] NSWSC 1117 the New South Wales Supreme Court discussed in detail the question whether an insurer has subrogation rights where a part of the assured’s loss is not covered by the policy. The court’s conclusion was that the assured retained the right to control the litigation against the third party in that situation, and that no subrogation rights attached. The point arose in the context of representative actions permitted under the law of New South Wales.

The Enterprise Bill 2015 will amend the Insurance Act 2015 by adding two further sections providing for damages against an insurer for late payment of claims. The measure was proposed by the English and Scottish Law Commissions in July 2014, but was omitted from the Insurance Bill presented to Parliament a few days later. The measure had encountered some market opposition and was felt by the government to be too controversial for inclusion in a Law Commission Bill that would attract an expedited Parliamentary procedure.

In Miah v National Mutual Life Association of Australasia Ltd [2015] NZHC 993 Associate Judge Dougue of the High Court of New Zealand considered the rights conferred by a life policy on Mr Miah’s wife which was jointly owned by Mr and Mrs Miah. The question was whether the benefits passed entirely to Mr Miah or equally to Mr Miah and to the estate of Mrs Miah. As a result of Mr Miah’s bankruptcy, he argued for the latter approach so that his late wife’s share would not be caught by the statutory assignment of his assets on bankruptcy.

The maxim “ex turpi causa non oritur actio” prevents a claim being made where it is in some way tainted by the claimant’s illegal act or other contravention of public policy rules. Although the availability of this defence arises in a variety of contexts, its scope has yet to be clearly defined. Matters have become more complex by a series of conflicting Supreme Court decisions. Brief mention of those will be made later.