DUNLOP HEYWARDS (DHL) LTD V ERINACEOUS INSURANCE SERVICES LTD

[2008] EWHC 520 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Field, 1 April 2008

Insurance (professional indemnity) – Instructions to renew given by producing brokers to placing brokers – Policy confining cover to Commercial Property Management – Claim by assured against producing brokers – Whether insurers should be joined to proceedings – Whether policy should be rectified – Claim by producing brokers against placing brokers – Whether claim for indemnity or contribution should be struck out

Producing brokers entered into arrangements with placing brokers for renewal of the assured’s liability cover: the placing brokers were appointed following a presentation to the producing brokers but the appointment was in effect made by the assured. The policy obtained by the placing brokers contained a restriction on cover to Commercial Property Management activities; draft wording was sent to the producing brokers by the placing brokers but no objection was raised. Claims were made against the assured in respect of allegedly fraudulent valuations. The assured did not make any claim against the insurers. The producing brokers sought to have the insurers joined to the proceedings under CPR 19.2, an application contested by the insurers. The producing brokers also sought indemnity and contribution from the placing brokers, and the placing brokers sought to have the claim against them struck out