DENSO MANUFACTURING UK LTD V GREAT LAKES REINSURANCE (UK) PLC

[2017] EWHC 391 (Comm), Queen's Bench Division, Commercial Court, Sara Cockerill QC, 3 March 2017

Insurance (after the event) - Effect of policy conditions - Whether conditions were conditions precedent - Whether conditions broken - Obligation to pay the premium - Insolvency of assured - Third Parties (Rights Against Insurers) Act 1930

Mploy, an employment agency, commenced proceedings against Denso claiming damages for breach of contract and fraud. Mploy took out after the event insurance from Great Lakes. Condition 7 stated that compliance with the terms of the policy was a condition precedent to any liability of the insurer to make payment. Condition 11(b) stated that: "All bills or other communications relating to fees or costs which may be payable under this Policy should be forwarded ... without delay". In the proceedings Denso made a Part 36 Offer on 12 March 2013 for £110,000, but it was rejected by Mploy and expired on 3 April 2013. By a judgment given on 5 September 2014 Mploy was awarded damages of £34,410, Denso was ordered to pay Mploy's costs up to 3 April 2013 and Mploy was ordered to pay Denso's costs from after 3 April 2013. Mploy went into liquidation at the end of 2014. On 4 December 2014 Denso sent Mploy's liquidators an offer to accept £210,341 net in respect of Denso's costs. Great Lakes was informed on 12 February 2015. The liquidators did not respond and did not inform Great Lakes. A chasing email was sent on 31 March 2015, stating Denso's intention to commence detailed assessment proceedings in the absence of a response. Mploy did not respond and did not inform Great Lakes. On 13 July 2015 Denso sent a further email to the liquidators stating that it had instructed a costs lawyer to prepare a detailed bill of costs; Great Lakes was not informed of this development. Notice of the commencement of detailed assessment proceedings was issued and served on 4 August 2015, and Great Lakes were informed on 2 September 2015. The following day Denso obtained a Default Costs Certificate requiring Mploy to pay £319,696.59. Denso sought to recover the costs award from Great Lakes under the Third Parties (Rights against Insurers) Act 1930.