Insurance Law Monthly

The decision of the Queensland Court of Appeal in Delta Pty Ltd v Mechanical and Construction Insurance Pty Ltd [2019] QCA 62 raises an important point of principle concerning the effect of a settlement with a third-party claimant coupled with an assignment of any insurance claim by the assured to the third party. The case discusses other points on which the law is rather more settled.

Under section 51 of the Senior Courts Act 1981 the court may make a costs order against any person, whether or not a party to the proceedings. In practice that jurisdiction has been exercised in exceptional circumstances only, for example, against a non-party whose interventions – generally by funding – have caused an action to be brought or defended when that would not otherwise have been the case.

In Sartex Quilts & Textiles Ltd v Endurance Corporate Capital Ltd [2019] EWHC 1103 (Comm), a decision of David Railton QC, the most important question was whether an assured entitled to the reinstatement of its buildings and machinery under the policy once reinstatement took place was nevertheless entitled to indemnity on a reinstatement basis even if no work had been carried out. The court, applying established principles, held that the test for measuring the assured’s loss focused on the assured’s intentions immediately before the insured event, and that post-loss intentions were largely irrelevant.