SIMON, HAYNES, BARLAS & IRELAND v. BEER.

(1944) 78 Ll.L.Rep. 337

KING'S BENCH DIVISION.

Before Mr. Justice Atkinson.

Insurance - Solicitors Indemnity Policy - "Neglect, omission or error"-Non-disclosure -Estoppel-Claim brought by C. against plaintiffs (firm of solicitors insured with defendant underwriters) -Allegation by C. that K., one-time partner of plaintiff firm (since dismissed), had been negligent in that he had negotiated certain advances by C. to F. without proper security-Underwriters notified of claim-Refusal by underwriters to admit liability-Plaintiffs told to act as if uninsured -Counsel's advice taken-Plaintiffs advised to settle-Claim by plaintiffs to recover settlement and costs-Evidence that K. had been responsible for the negotiation of certain loans made by C. to F.; that K., without benefit to himself, had drawn cheques on plaintiffs' clients' account for benefit of F. (though F's. account was overdrawn); that K. was dismissed by plaintiffs immediately upon discovery by them of such unprofessional conduct and reported to the Law Society, who took disciplinary action; and that plaintiffs' clients' account, in spite of such payments, was always sufficient to meet clients' claims - Contention by underwriters (a) that matters of negligence alleged by C. and (b) that the improper dealing with the plaintiffs' clients' account were material to the risk and should have been disclosed prior to renewal of policy - Whether underwriters estopped from denying liability- Duty of underwriters, upon discovering concealment, to make their election within reasonable time.