Insurance and Reinsurance on i-law

Transcription

1 i-law.com Business intelligence Insurance and Reinsurance on i-law October 2017 highlights the best of i-law.com

2 Contents Written by experts in insurance, professional negligence and liability, Insurance & Reinsurance on i-law.com contains an unrivalled collection of news, analysis and international and English law case reports a must-read for legal practitioners, brokers and compliance officers. This booklet of extracts combines recent articles from Lloyd s Law Reports: Insurance & Reinsurance and Insurance Law Monthly, as well as other sources on i-law.com, to provide a round-up of our must-see content from October Assens Havn v Navigators Management (UK) Ltd Insurance (liability) Third-party direct action against insurers Jurisdiction Exclusive jurisdiction clause Whether clause binding on third-party claimant Brussels Regulation, Council Regulation 44/2001/EC, articles 11, 13 and 14. Lloyd s Law Reports: Insurance & Reinsurance Plus, [2017] Lloyd s Rep IR Plus 41 Farrell v Whitty Insurance (motor) - Direct effect of EU law - Whether Motor Insurers Bureau of Ireland an emanation of the state. Lloyd s Insurance Law Reporter, 16 October 2017 The duty of fair presentation: materiality and inducement The Insurance Act 2015 has swept away the rules in the Marine Insurance Act 1906 on nondisclosure and misrepresentation by business assureds, and has replaced them with a new regime of fair presentation. The most important changes relate to the meaning of knowledge for disclosure purposes and the introduction of proportional remedies for breach. Insurance Law Monthly, October 2017 Government proposals could see rise in personal injury discount rate The government has announced measures to change the way compensation payouts are calculated which it said would mean that the discount rate might be in the region of 0 per cent to 1 per cent. In February this year the discount rate was reduced from 2.5 per cent to minus 0.75 per cent. The changes, proposed in the draft legislation, mean the rate would be set by reference to low risk rather than very low risk investments. Liability, Risk and Insurance, Issue 326 Mendes v Crédito Agrícola Seguros Companhia de Seguros de Ramos Reais SA Insurance (motor) Compulsory cover Policy holder/owner of vehicle run down and injured by thief Portuguese law precluding coverage for policy holder Whether exclusion compatible with EU law European Parliament and Council Directive 2009/103/EC, articles 12(3) and 13(1). Lloyd s Law Reports: Insurance & Reinsurance Plus, [2017] Lloyd s Rep IR Plus 35

3 Lloyd s Law Reports: Insurance & Reinsurance Plus, [2017] Lloyd s Rep IR Plus 41 Assens Havn v Navigators Management (UK) Ltd Case C-368/16, Court of Justice of the European Union Insurance (liability) Third-party direct action against insurers Jurisdiction Exclusive jurisdiction clause Whether clause binding on third-party claimant Brussels Regulation, Council Regulation 44/2001/EC, articles 11, 13 and 14. This was a request to the CJEU for a preliminary ruling on the interpretation of articles 13 and 14 of the Brussels Regulation, Council Regulation 44/2001/EC of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. In the autumn of 2007, Skåne Entreprenad Service AB, a Swedish company, was in charge of the transportation of sugar beet to a factory in Nykøbing Falster, Denmark. Part of the transportation was carried out by ship from Assens to Nakskov. Skåne Entreprenad chartered a number of tugs and lighters, including the tug Sea Endeavour I. On 24 November 2007, when the tug Sea Endeavour I arrived in Assens Havn, some damage was caused to the quay installations. There was disagreement as to how that damage arose and who was liable for it. Farrell v Whitty Case C-413/15, Court of Justice of the European Union, 10 October 2017 Insurance (motor) - Direct effect of EU law - Whether Motor Insurers Bureau of Ireland an emanation of the state. In 1996 Ms Farrell was injured in a motor vehicle accident while seated on the floor of a van being driven by Mr Whitty. The van was not equipped to carry passengers. Mr Whitty was uninsured, and Ms Farrell sought compensation from the Motor Insurers Bureau of Ireland, the designated compensation body for uninsured and untraced driver claims under the Consolidated Motor Insurance Directive The MIBI had been established some years earlier by agreement between the government of Ireland and the motor insurance industry. Her claim was refused on the ground that the compulsory insurance requirement did not apply to her. In earlier proceedings, Farrell v Whitty Case C-356/05, [2007] Lloyd s Rep IR 525, the CJEU ruled that the Directives precluded legislation that excluded from the compulsory insurance requirement cover for a passenger in a vehicle not designed for carrying passengers was inconsistent with the Directive. The court also held that the Directive was unconditional and precise and of direct effect so that it could be relied upon as part of domestic law in the national courts. In the present sequel proceedings, the CJEU ruled that the MIBI was an emanation of the state and accordingly that Ms Farrell had a direct claim against the MIBI on the terms of the Directive irrespective of the limitations in MIBI s agreements with the Irish state. This article was published in the new Lloyd s Insurance Law Reporter service, available via and on Lloyd s Insurance Law Reporter Skåne Entreprenad had liability insurance with Navigators Management (UK) Ltd. The policy stated that it was governed by English law and that any dispute was subject to the exclusive jurisdiction of the High Court in London. Skåne Entreprenad went into liquidation. Assens Havn brought an action directly against Navigators before the Maritime and Commercial Court, Denmark, seeking an order that Navigators should pay compensation for the damage in question in the sum of approximately 176,270. Danish law provided for a direct action where the assured under a liability policy had gone into liquidation. On 22 December 2014 the Danish court dismissed the action on the ground that it did not have jurisdiction, since the agreement on jurisdiction concluded between the parties to the insurance contract was binding on the injured party. Assens Havn appealed. The Danish court referred to the CJEU the question whether article 13 of the Brussels Regulation, read in conjunction with article 14, was to be interpreted as meaning that a third party bringing a direct action against insurers was bound by an exclusive jurisdiction clause. This is an extract of the original Report headnote. To access the full headnote and Report, please visit Lloyd s Law Reports: Insurance & Reinsurance Plus on informa Business Intelligence / 3

4 Insurance Law Monthly, October 2017 The duty of fair presentation: materiality and inducement The Insurance Act 2015 has swept away the rules in the Marine Insurance Act 1906 on non-disclosure and misrepresentation by business assureds, and has replaced them with a new regime of fair presentation. The most important changes relate to the meaning of knowledge for disclosure purposes and the introduction of proportional remedies for breach. However, the key principles that a fact misstated or withheld has to be objectively material and also must subjectively have induced the insurers to contract with the assured on terms that would not otherwise have been offered remain in force. The decision of Lord Bannantyne in the Outer House of the Court of Session in Higherdelta Ltd v Covea Insurance plc [2017] ScotCS CSOH 84, decided under the old law, would almost certainly have been the same under the new law. any loss destruction or damage or made any claim or had any claim made against you during the last 3 years? The assured answered no to each of these points. In September 2014 Covea purported to avoid the policy for non-disclosure and misrepresentation of material facts. Covea relied upon facts surrounding Mr Sandhu s ownership of a portfolio of residential properties used for letting. It was undisputed that those properties had until 1 March 2012 been insured by Aviva Insurance. As a result of Mr Sandhu s claims history on the residential properties, and a large fire claim in 2009, Aviva did not renew the policy. The residential properties remained uninsured until the end of 2012, when Catlin Insurance agreed to offer cover. This is an extract of the original article. To access the full analysis, please visit Insurance Law Monthly at and The assured, Higherdelta, operated a restaurant in Bonnybridge, Stirlingshire. Higherdelta, which also operated a number of other premises was controlled by its director, shareholder and company secretary, Mr Sandhu. On 16 July 2013 the restaurant was seriously damaged by fire. Higherdelta s property portfolio had been insured by Covea under a policy first issued in January 2007 and renewed ever since, including on 19 January 2013; the restaurant had been added to the cover in The application for renewal asked, amongst others, the following questions: In respect of any of the risks against which you now wish to insure: (ii) Has any previous insurer declined a proposal, refused to renew a policy or imposed special terms or conditions? (iii) Have you or any director or partner (whether a current or any previous trading name or interest) incurred Government proposals could see rise in personal injury discount rate The government has announced measures to change the way compensation payouts are calculated which it said would mean that the discount rate might be in the region of 0 per cent to 1 per cent. In February this year the discount rate was reduced from 2.5 per cent to minus 0.75 per cent. The changes, proposed in the draft legislation, mean the rate would be set by reference to low risk rather than very low risk investments. The government said the reforms will make sure personal injury victims get the right compensation: The discount rate is the percentage used to adjust compensation awards for victims of serious personal injury, according to the amount they can expect to earn by investing it. The adjusted awards should put claimants in the same financial position they would have been in had they not been injured they should receive neither more nor less than 100 per cent compensation. Following a consultation in March, analysis of the feedback, along with other research, has indicated that claimants often take more investment risk than the law currently assumes. The changes, proposed in draft legislation, would better reflect evidence of the actual investment habits of claimants. According to the proposals, the rate will be reviewed more regularly in future at least every three years and extend the expertise available to the Lord Chancellor in carrying out the reviews by creating a role for an independent expert panel in the process. This is an extract of the original article, published in Liability, Risk and Insurance, Issue 326. For the full piece, visit Liability, Risk and Insurance 4 / Business Intelligence informa

5 Lloyd s Law Reports: Insurance & Reinsurance Plus, [2017] Lloyd s Rep IR Plus 35 Mendes v Crédito Agrícola Seguros Companhia de Seguros de Ramos Reais SA Case C-503/16, Court of Justice of the European Union Insurance (motor) Compulsory cover Policy holder/owner of vehicle run down and injured by thief Portuguese law precluding coverage for policy holder Whether exclusion compatible with EU law European Parliament and Council Directive 2009/103/EC, articles 12(3) and 13(1). This was a request by the Court of Appeal of Evora, Portugal, for a preliminary ruling on the interpretation of articles 12(3) and 13(1) of Directive 2009/103/EC1 of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability. On 26 April 2009 Mr Mendes and his wife were at a farm owned by them in Chamusca, in the yard of which were parked two motor vehicles, one belonging to each of them. About a man not known to them drove off in Mr Mendes s vehicle. The Mendes s immediately set off in pursuit in the other vehicle. They caught up with the thief at a junction. Mr Mendes got out of his wife s vehicle in order to approach his own vehicle. The driver reversed, knocking down Mr Mendes and causing him to be dragged by his own vehicle a distance of about 8 m. As a result of his injuries he was unable to work for 654 days. Mr Mendes was insured by CA Seguros against harm caused to third parties by his vehicle. This is an extract of the original Report headnote. To access the full headnote and Report, please visit Lloyd s Law Reports: Insurance & Reinsurance Plus on Also new in October to Insurance and Reinsurance on i-law.com Law of Insurance Contracts Service Issue 38 is now available Margaret Hemsworth, Senior Lecturer at the University of Exeter, is the new Editor of the Law of Insurance Contracts, taking over from Professor Malcolm Clarke who has retired after many years exemplary service. This issue includes updates including the MIB Untraced Drivers Agreement 2017, and recent Supreme Court cases of AIG Europe Ltd v Woodman [2017] Lloyd s Rep IR 209; Gard Marine & Energy Ltd v China National Chartering Co Ltd [2017] Lloyd s Rep IR 291 and Wood v Capita Insurance Services Ltd [2017] 2 WLR Insurance Broking Practice and the Law Service Issue 20 is now available This issue substantially revises the Competition chapter (chapter 22), commenting on the expiry of the Insurance Block Exemption Regulation on 31 March 2017 and the concurrent competition powers of the FCA. It also highlights cases including BPE Solicitors v Hughes-Holland [2017] UKSC 21 (on the application of SAAMCO and the scope of duty owed by a professional) and Channon v Ward [2017] EWCA Civ 13 where the Court of Appeal considered the defence that, even if the broker obtained cover as instructed, the policy would not have responded. A Practical Guide to the Insurance Act 2015 New book now on i-law Lord Mance (Justice of the Supreme Court) has written the foreword to this title and states: The authors write clearly, informatively and analytically, with footnotes referring both to case law and other relevant commentaries. Their work will be of great use to all who effect or place insurances, to the insurance market, to legal practitioners and to academics alike. It should assist as much to avoid problems as to solve them when they arise. Lloyd s Law Reports: Insurance and Reinsurance coming soon Amlin Corporate Member Ltd v Baby Basics Ltd and Another [2017] EWHC 2047 (Comm) This short judgment of Sir Jeremy Cooke looks at a couple of issues arising under a product liability policy. The main point of interest is the court s interpretation of the phrase bodily injury as an insured head of liability. Neto de Sousa v Portuguese State, Case C-506/16, Court of Justice of the European Union Insurance (motor vehicle) - Driver injured in motor vehicle accident - Driver s spouse killed - Whether driver has insurance claim - Consolidated Motor Insurance Directive, European Parliament and Council Directive 2009/103/EC. i-law.com Business intelligence informa Business Intelligence / 5

6 i-law.com Business intelligence Achieve more with Insurance and Reinsurance on i-law.com i-law.com is your essential online legal companion, combining user-friendly functionality with our quality insurance and reinsurance law content. Our exclusive law library, including Lloyd s Law Reports: Insurance and Reinsurance dating back to 1991, provides the information you need at the right time, anywhere in the world. Discover the power of i-law.com today at about.i-law.com