i-law

Double Insurance and Contribution

Page 225

Index

Index

  • absolute escape clauses see exclusion clauses
  • Albion Insurance Co Ltd v Government Insurance Office of New South Wales 142, 143
  • America: double recovery, prohibition on 13n32;
    • “other insurance” clause 104–107;
    • stacking cases 13n32
  • apportionment method for contribution 148
  • asbestos litigation: apportionment 182, 183;
    • approach of the courts to resolve problems 198–203;
    • Barker v Corus revisiting Fairchild 180–183, 204;
    • Bolton Metropolitan BC v Municipal Mutual Insurance Ltd 178–180, 199;
    • Cape Distribution v Cape Intermediate Holdings plc 197, 198;
    • case law development 169, 170;
    • causation principle 173, 186, 187, 199;
    • contribution, doctrine of 180;
    • damages, apportionment of 183;
    • development of mesothelioma 169;
    • damages 183;
    • double insurance, application 191, 198–203, 205, 206;
    • Durham v BAI (Run Off) Ltd 183–193, 199, 203;
    • Employers Liability (Compulsory Insurance) Act 1969, point of and implications of 200–202;
    • employers’ liability insurance 184, 186, 194;
    • Fairchild v Glenhaven Funeral Services Ltd decision 170–178, 199, 203, 204;
    • history and medical aspect of mesothelioma 170, 171;
    • Investors Compensation Scheme Ltd v West Bromwich Building Society 200;
    • liability for risk or injury 183;
    • Phillips v Syndicate 992 Gunner 203 – 205 ;
    • law of tort 202;
    • proportionate division of liability 203–205;
    • “sustained” and “contracted” 186–189;
    • tort liability 193, 194, 202;
    • type of liability insurance 202, 203;
    • Workmen’s Compensation Acts 185, 190;
    • Zurich Insurance plc UK Branch v International Energy Group Ltd 193–197
  • assured: distinction between “an assured” and “the assured” 56, 57
  • Austin v Zurich General Accident and Liability Insurance Co Ltd 43, 44, 218
  • Australia: adoption and application of Marine Insurance Act 1906 13;
    • “an assured” and “the assured”, distinction between 56, 57;
    • approach to double insurance 6, 7;
    • case law 11, 11n13, 12;
    • combination of clauses 53, 54;
    • comparison of insurance market with that of the UK 32;
    • contractual and legislative exclusions 20, 21;
    • contribution, right of recovery 163;
    • control of policy terms, legislative provisions 111, 112;
    • cover note 54;
    • “entered into”, meaning 57–63;
    • exclusion clauses, legislation barring 51;
    • Explanatory Memorandum (Insurance Contracts Bill 1984 see Explanatory Memorandum (Insurance Contracts Bill 1984;
    • fairness, test of 112–114;
    • Financial Ombudsman Service 111;
    • General Code of Insurance Practice 111;
    • Insurance Contracts Act 1984 (Australia) s45 see Insurance Contracts Act 1984 (Australia) s45 “other insurance” provisions;
    • Marine Insurance Act 1909 11;
    • meaning of “the assured” 56, 57;
    • other legislative provisions 111, 112;
    • severance 55, 56;
    • specified terms in contracts 88–99;
    • unfair terms 112–114

  • Page 226

    Australian Corporations Act 2001
  • Australian Eagle Insurance Co Ltd v Mutual Acceptance (Insurance) Pty Ltd 147, 148
  • Australian Insurance Law 143
  • Australian Law Reform Commission, Report on Insurance Contracts, Report No 20 (1982): calculating contribution 157, 158;
    • combination of clauses 53, 54;
    • consideration of English law 6, 7;
    • cover note 54;
    • draft legislation 53;
    • existing problems 53;
    • fairness, test of 112–114;
    • guiding principles 52;
    • “other insurance” provisions 53–56;
    • recommendations 52, 75, 76;
    • severance of void parts in clauses 86–88;
    • specifying terms in contracts 88–99;
    • terms of reference 51;
    • true excess liability in a policy 76–85
  • Australian Prudential Regulatory Authority 111
  • Australian Securities and Investment Commission Act 2001 111
  • balancing the interest between parties 128, 129, 221
  • Bankers & Traders Insurance Co Ltd v National Insurance Co Ltd 33–35
  • Barker v Corus revisiting Fairchild 180–183, 204
  • Battle of Lagos 4
  • Bolton Metropolitan BC v Municipal Mutual Insurance Ltd 178–180
  • Bovis Construction Ltd v Commercial Union Assurance Co plc 213, 214
  • Bovis Lend Lease Ltd v Saillard Fuller and Partners 213
  • Bubble Act 1720 4, 12, 110, 111
  • calculation methods for contribution: common liability test 6, 154, 222;
    • criticisms and possible solutions 157, 158;
    • independent actual liability 6, 151–154, 222;
    • maximum potential policy 6, 148–151, 222
  • Caledonian North Sea v London Bridge Engineering 129, 219, 220
  • Canada: adoption of Marine Insurance Act 1906 13;
    • notification requirement 70–72;
    • position on double insurance 107–110
  • Cape Distribution v Cape Intermediate Holdings plc 197, 198
  • case law (asbestos litigation): Barker v Corus revisiting Fairchild 180–183;
    • Bolton Metropolitan BC v Municipal Mutual Insurance Ltd 178–180;
    • Cape Distribution v Cape Intermediate Holdings plc 197, 198;
    • case law development 169, 170;
    • development of mesothelioma 169;
    • Durham v BAI (Run Off) Ltd 183–193;
    • Fairchild v Glenhaven Funeral Services Ltd decision 170–178;
    • Zurich Insurance plc UK Branch v International Energy Group Ltd 193–197
  • case law (Civil Liability (Contribution) Act 1978) 212–217
  • case law (contribution): Australia 142–145;
    • calculation of insurer’s liability 148–153;
    • co-insurers 126;
    • common law contribution 117, 118;
    • co-sureties 121–123;
    • covering the same risk 134–141;
    • entitlement to 147;
    • equitable contribution 119, 120, 147;
    • guarantor’s right 123–126;
    • independent actual liability 151–154;
    • maximum potential policy 148–151;
    • principle behind 129;
    • same assured, same subject matter and same interest 131–134;
    • wide range of events covered by policy 154, 155
  • case law (double insurance): absolute escape clauses 33–36;
    • combination of clauses 46–50;
    • excess clauses 43, 44;
    • escape clause against excess clause 42, 43;
    • identifying whether double insurance arises 14–18;
    • illustrating complexities of double insurance 30–32;
    • interpreting clauses 20–22;
    • marine insurance 13–16;
    • rateable proportion clauses 45;
    • recovery from insurers 18–20;
    • return of premiums 25–27;
    • self-cancelling clauses held ineffective 36–39;
    • Weddell principle in other jurisdictions 39–41
  • case law (double insurance America), “other insurance” clause 104–107
  • case law (double insurance Australia): analysis of cases 102–104;
    • “an assured” and “the assured”, distinction between 56, 57;
    • conclusion on facts of the case 62, 63;
    • “entered into”, meaning 57–63;
    • marine insurance 11, 11n13, 12;
    • notification clause, validity of s45(1) 68–72;
    • “other insurance” 59–62;
    • specifically, meaning under s45(2) 65–68;
    • specifying terms in contract 88–99;
    • tests adopted by the courts 102;
    • true excess clause 77–86, 102

  • Page 227

    case law (double insurance Canada) 107–110
  • case law (subrogation and indemnity 217–220
  • categories of insurance 5n17
  • causation principle, mesothelioma cases 173, 186, 187, 199
  • Chamber of Assurance, establishment 4, 9
  • Civil Liability (Contribution) Act 1978: application to double insurance 6, 212–217;
    • apportionment 216;
    • claims between indemnity insurers 213–217;
    • implementation 211, 212;
    • joint liability 208, 209;
    • liability in tort 216
  • claims: choice of policy 22;
    • limitation period 130
  • clauses: combination in policies 30;
    • escape clauses see exclusion clauses, excess clauses see excess clauses;
    • exclusion clauses see exclusion clauses;
    • in combination 46–50;
    • interpretation of policy wording 20–22;
    • limiting or excluding liability 20–22;
    • “other insurance” 29, 30;
    • policy considerations 32;
    • rateable proportion clauses see rateable proportion clauses;
    • restriction of assureds’ rights 29;
    • self-cancelling clauses held ineffective 36–39;
    • suggested solutions 110–114;
    • types of 6, 29, 32, 33, 221;
    • uncertainty of 33
  • co-insurer’s right to contributions 126
  • combination of clauses 46–50; 53, 54
  • common law principle: Australia, right of recovery 95;
    • contribution and 6, 117, 118, 129, 130, 207–220;
    • co-sureties 121, 126;
    • distinction between equity and 209, 210;
    • exclusion/limitation clauses 29;
    • indemnity up to extent of loss 75;
    • premiums 27
  • common liability test 6, 154, 222
  • Compensation Act 2006 185, 186
  • compensation, entitlement of mesothelioma victims 199, 183, 185, 186, 190, 199
  • concept of double insurance 5, 13, 14
  • consideration 3
  • contract of insurance, definition 3
  • contribution: apportionment, policy providing method of 148;
    • balancing interest of insurer and the assured 128, 129;
    • calculation of insurer’s liability 6, 148–154;
    • case law see case law (contribution);
    • Civil Liability (Contribution) Act 1978 see Civil Liability (Contribution) Act 1978;
    • common law 6, 117, 118, 129, 130, 207–220;
    • co-sureties 120–123, 207, 210;
    • doctrine modified by contract 180;
    • double recovery, possibility of 209;
    • elements of double insurance 126–128;
    • entitlement to 147, 148;
    • equitable principle 23, 147, 209, 210;
    • event after loss and insurer denying liability 163;
    • factors to be satisfied 127, 128;
    • general concept 22–24;
    • history 117–126;
    • joint liability 207–209;
    • limitation period for claims 130;
    • marine insurance 156;
    • origins of 23;
    • overlaps allowing for contribution 164–167;
    • property insurance 155, 156;
    • reimbursement or 209;
    • requirements to be satisfied 24;
    • restitution in nature 109;
    • right of contribution arising see right of contribution arising;
    • same damage not same tort 208;
    • subrogation and indemnity 217–220;
    • tortfeasors, joint and several 207–209, 211;
    • unjust enrichment 207, 209;
    • voluntary payment 159–163;
    • wide range of events covered by policy 154, 155
  • Co-operative Retail Services Ltd v Taylor Young Partnership Ltd 215
  • co-sureties, contribution and 120–123, 207, 210
  • cover note 54
  • Deering v Earl of Winchelsea 119, 120, 121
  • definition of double insurance 5, 9n3
  • double insurance: America 104–107;
    • apportionment of loss 24;
    • asbestos litigation 191, 198–203, 205, 206;
    • Australia see Australia;
    • Canada 107–110;
    • case law see case law (double insurance);
    • complexities of 30–32;
    • concept of 5, 13, 14;
    • definition 5, 9n3;
    • effect on claims 29–50;
    • excess clauses see excess clauses;
    • exclusion clauses see exclusion clauses;
    • history of 9–11;
    • identifying, case law 14–18;
    • legislative reform, Australia see Australia;
    • overview 3–7;
    • premiums 25–27;
    • rateable proportion clauses see rateable proportion clauses;
    • recovery from insurers 18–20;
    • requirements for 5, 221;
    • unclear legislation 6
  • double recovery, possibility of 209

  • Page 228

     Drake Insurance Co v Provident Insurance Co 161–163
  • Durham v BAI (Run Off) Ltd 183–193
  • Eagle Star Ltd v Provincial Insurance plc 161
  • employers, asbestos litigation see asbestos litigation
  • Employers’ Liability Act 1880 185
  • Employers Liability (Compulsory Insurance) Act 1969, point of and implications of 200–202
  • employers’ liability insurance, asbestos litigation 184, 186, 194
  • “entered into”: beneficial third parties 61, 62;
    • meaning 57–63;
    • question of construction 94–96
  • Equitable Fire & Accident Office 30–32
  • equitable principle, contribution and 6, 119, 120, 129, 147, 149, 158, 209, 210
  • escape clauses see exclusion clauses
  • excess clauses: America 104–107;
    • Australia see Australia;
    • combination of clauses 46–50;
    • concurrent 43, 44;
    • escape clause against 41–43;
    • inclusion of 6, 29, 32;
    • self-cancelling 43;
    • true excess clause 77–85;
    • Weddell principle 37–39
  • excess coverage 64, 65, 167
  • exclusion clauses: absolute escape clauses 33–35;
    • all policies containing absolute clauses 35, 36;
    • America 104–107;
    • Australia see Australia;
    • combination of clauses 46–50;
    • concurrent 33–39;
    • excess clause, against 41–43;
    • inclusion of 6, 29, 32;
    • self-cancelling clauses held ineffective 36–39;
    • uncertainty of such clauses 33;
    • Weddell principle 36–39
  • ex gratia payments 148
  • Explanatory Memorandum (Insurance Contracts Bill 1984): categories of clauses 87;
    • effect of type of policy provision 87;
    • mechanisms used for protection by insurers 88;
    • severance of void clause 87, 88;
    • situations where double insurance could arise 86, 87;
    • types of policy provisions 86, 87
  • Fairchild v Glenhaven Funeral Services Ltd decision 170–178, 199, 203, 204
  • Financial Services and Markets Act 2000 111
  • fire insurance, history 4
  • Fire Life Insurance Duty Act 1782 4
  • “floater” policy 59n35
  • fraud, risk of 3, 9, 20, 52
  • fraudulent trading 4
  • Gale v Motor Union Insurance Co 35, 36
  • Godin v London Assurance Co 16, 138, 147
  • Great Fire of London 4
  • guarantor’s right to contribution 123–126
  • HIH Casualty and General Insurance Co v Pluim Construction Pty Ltd 65–67, 89–91, 93
  • history of contribution: common law contribution 117, 118;
  • history of double insurance: Bubble Act 1720 12;
    • Chamber of Assurance 9;
    • Marine Insurance Act 1906 9–11
  • Home Insurance Co of New York v Gavel 70, 71
  • Hong Kong: adoption of Marine Insurance Act 1906 13
  • identifying double insurance, case law 14–18
  • indemnity, requirement 13, 18
  • independent actual liability test 6, 151–154, 222
  • insolvent insurers 5, 45
  • Insurance Conduct of Business Sourcebook the Insurance Ombudsman Bureau 111
  • Insurance Contracts Act 1984 (Australia) s45 “other insurance” provisions: application 54;
    • effects of s 76 74, 75;
    • “entered into” 59–63, 94–96;
    • exceptions under 63–65;
    • excess clause, impact on 75, 76;
    • excess layers of cover 64, 65;
    • exclusion clause, impact on 75, 76;
    • Explanatory Memorandum see Explanatory Memorandum (Insurance Contracts Bill 1984);
    • implementation 6, 7;
    • not being a contract of insurance required to be effected by or under law (exception 1) 63, 64;
    • notification clause, validity of s45(1) 68–73;
    • proposed legislative provision 73, 74;
    • provision, meaning of 97, 98;
    • public liability insurance 63, 64;
    • rateable

      Page 229

      proportion clauses, impact on 75, 76;
    • rationale for 53;
    • recovery of loss suffered under contract 95;
    • review of the Act 100, 101;
    • severance 55, 56;
    • some or all of loss not covered by a contract of insurance that is specified in first-mentioned contract (exception 2) 64, 65;
    • “specifically”, meaning under s45(2) 65–68;
    • specifying terms in contracts 88–99;
    • text of s 45 53;
    • time “other insurance” entered into 54, 55
  • Insurance Contracts Bill 1982 Clause 77 158
  • Insurance Contracts Bill 1984 Explanatory Memorandum see Explanatory Memorandum (Insurance Contracts Bill 1984)
  • insurance industry: development and regulation of 4
  • insurance premiums see premiums
  • Investors Compensation Scheme Ltd v West Bromwich Building Society 200
  • joint liability: Civil Liability (Contribution) Act 1978 211–217;
  • landlords and tenants, overlapping insurance 165, 166
  • Law Commission recommended reforms 1980 111
  • Law Council of Australia, clarification of Insurance Contracts Act 1984 101
  • Law of Contribution and Reimbursement 118
  • Law of Restitution 120
  • Law Reform Committee’s Report 1957 111
  • Law Reform (Married Woman and Tortfeasors) Act 1935 211
  • Legal & General v Drake Insurance 159–162
  • Limitation Act 1980 130
  • limitation of liability see exclusion clauses
  • limitation period for contribution claims 130
  • Lloyd’s Coffee House 12
  • Lloyd’s underwriters 5, 12
  • London Assurance 4, 12
  • marine insurance: history 4;
    • registration 4;
    • right to contribution 156;
    • source of 12
  • Marine Insurance Act 1906: definition of double insurance 9n3;
    • other jurisdictions 11, 13;
    • overview 9–11;
    • situations covered 10;
    • valued policy 10;
    • United Kingdom 10;
    • unvalued policy 10
  • Marshall on Insurance 26
  • Mathie v The Argonaut Marine Insurance Co Ltd 14, 15
  • maximum potential liability test 6, 148–151, 222
  • Merchant Insurers Bill 1693 4
  • Merryweather v Nixon 212
  • mesothelioma see asbestos litigation
  • Morris v Ford Motors Co Ltd 217
  • mortgagor and mortgagee, overlapping insurance 164, 165
  • mutual societies 5
  • National Employers Mutual General Insurance Association Ltd v Haydon 37–39; 77–79
  • National Farmers Union Mutual Insurance Society Ltd v HSBC Insurance (UK) Ltd 46–50
  • New Zealand: adoption of Marine Insurance Act 1906 13;
    • escape clause against excess clause, self-cancelling 42, 43;
    • Marine Insurance Act 1908
  • Nicholas v Wesfarmers Currangh Pty Ltd 59–62
  • 1986 Statement of Practice, Insurance Conduct of Business Rulebook 111
  • North British and Mercantile Insurance Co v London, Liverpool and Global Insurance Co 131, 132, 164
  • North British Insurance v London, Liverpool & Globe Insurance 14
  • notification requirements: Australian case law 68–72;
    • Canadian position 72;
    • correct approach 72, 73;
    • effect of s76 Insurance Contracts Act 1984 74, 75;
    • notification clause, validity of s45(1) of Insurance Contracts Act 1984 68;
    • suggested legislative provision 73, 74
  • “open cover policy” 59n35
  • “other insurance” clauses: America 104–107;
    • Australia see Insurance Contracts Act 1984 (Australia) s45 “other insurance” provisions;
    • Canada 108;
    • effect of 29, 30
  • overlapping insurance, allowing for contribution 164–167
  • parent and subsidiary companies, “top and drop” policies 68, 103
  • Phillips v Syndicate 992 Gunner 203 – 205

  • Page 230

    policy considerations 32
  • premiums: outline 3;
  • primary policies 167
  • property insurance: history 4;
    • right to contribution 155, 156
  • public liability insurance 63, 64
  • rateable proportion clauses: combination of clauses 46–50;
    • contribution, both policies containing rateable proportion clause 161, 162;
    • effect of 44, 45;
    • inclusion of 6, 29, 32, 33;
    • policies not concurrent 45
  • Rathbone Brothers plc v Novae Corporate Underwriting Ltd 17, 18
  • recovery from insurers: assureds’ rights 18–20; 147
  • regulation of the insurance industry in the UK 4, 5, 110, 111
  • reimbursement 39, 40, 117, 118, 207, 209
  • return of premiums: insurer refusing to pay 25;
    • legislative framework 25, 26;
    • principle in Tyrie 25, 26;
    • prior to legislation 26, 27;
    • risk attached 27
  • review of Insurance Contracts Act 1984 100, 101
  • right of contribution arising (Australian position): case law 142–145;
    • requirement for policies to be in force and valid 144, 145
  • right of contribution arising (UK position): case law 131–141;
    • covering the same risk, essential requirement 134–141;
    • factors required 131;
    • same assured, same subject matter and same interest covered 131–134
  • rights of assured persons: recovery from insurers 18–20;
    • restriction by insurers 29
  • rights of parties regarding clauses 110
  • risk, covering 18; 134–141
  • Royal Brompton Hospital NHS Trust v Hammond 212, 213, 216
  • Royal Exchange Assurance 4, 12
  • self-insurance, asbestos litigation 196, 197
  • severance of underlying clause 55, 56, 98, 99
  • Sickness & Accident Assurance Association Ltd v The General Accident Assurance Corporation 144, 145
  • Singapore: adoption of Marine Insurance Act 1906 13;
    • contribution, right of recovery 162, 163;
    • interpreting clauses 21, 22;
    • Weddell principle 39–41
  • South Sea Company 4
  • specifically, meaning under s45(2) 65–68
  • specifying terms in contracts: actual effect of provision 91–93;
    • definition of specified 89–91;
    • legislative effect of s45 Insurance contracts Act 1984 88–99;
    • meaning of provision 97, 98;
    • parties specifying terms 88, 89;
    • potential effect of provision 92, 93;
    • range of ways 88, 89;
    • severance of underlying clause 98, 99
  • speculative trading 4
  • stacking, definition of 13
  • Steadfast Insurance Co Ltd v F&B Trading Co Pty 68–70
  • subrogation and indemnity 217–220
  • sureties: common law contribution 117, 118;
  • Sutton on Insurance Law 62n53, 68n82
  • “top and drop” policies 68, 103
  • tort, principles of 6
  • tortfeasors, joint and several 207–209, 211–217
  • Trade Practices Amendment (Australian Consumer Law) Act 2010 112, 114
  • true excess liability: exemptions, true excess clause 77–85, 102;
    • limits on recommendations 76, 77
  • types of clauses 6, 29, 32, 33
  • umbrella policies 167
  • Unfair Contract Terms Act 1977 111
  • Unfair Terms in Consumer Contracts Regulations 1999 111
  • unfair terms, test of 112–114
  • unjust enrichment 120, 207, 209
  • Union Marine Insurance Co Ltd v Martin 15, 16, 17
  • unvalued policy 10, 11
  • validity of policy 18
  • valued policy 10, 11
  • vendors and purchasers, overlapping insurance 166
  • Vero Insurance Ltd v QBE Insurance (Australia) Ltd 58, 59

  • Page 231

    void clauses: severance 86–88
  • voluntary payment by insurer 159–163
  • Weddell v Road Traffic and General Insurance Co Ltd 36–41
  • Workmen’s Compensation Act 185, 190
  • Zurich Australian Insurance Ltd v Metals & Minerals Insurance Pte Ltd 57–59, 67, 79–85, 88–99
  • Zurich Insurance plc UK Branch v International Energy Group Ltd 193–197

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