Lloyd's Maritime and Commercial Law Quarterly
REFLECTIONS ON REFLECTIVE LOSS
David Foxton*
Zhikun v Xio GP
1. Introduction
As Sir Bernard Rix JA noted when handing down the Cayman Islands Court of Appeal decision in Zhikun v Xio GP Ltd,1 the application of the rule against the recovery of reflective loss is a doctrine “which seems to be extending its scope wider and wider”. The doctrine to which the Court of Appeal gave birth in Prudential Assurance Co Ltd v Newman (No 2)
2 and which was named by the House of Lords in Johnson v Gore Wood & Co
3 has featured in over 150 judgments since, and is on its way to the Supreme Court again.4 And yet, while the policies which underpin the doctrine have frequently been articulated—the avoidance of double-recovery, the protection of the interests of the company’s creditors,
* QC.
1. Zhikun v Xio GP Ltd (14 November 2018) (hereafter “Zhikun v Xio”), [95].
2. [1982] Ch 204.
3. [2000] UKHL 51; [2002] AC 1.
4. On appeal from Marex Financial Ltd v Sevilleja [2018] EWCA Civ 1468; [2019] QB 173.
Case and comment
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