The European Commission has just started a review of the legal regime of compulsory motor insurance put in place by the Motor Insurance Directive EC/2009/103 (the MID). The review is the wider REFIT evaluation of all aspects of the MID and is open for responses until 20 October. It therefore runs in parallel with the shorter four week consultation about the inception impact assessment (IIA) for the MID, about which we posted this blog last week.
Today marks the first anniversary of the commencement of the Third Party (Rights against Insurers) Act 2010. It is, as we have discussed, a successor to an Act of the same name dated 1930. It modifies and brings up to date the protections available for a claimant bringing an action against an insured but insolvent defendant. Despite the overhaul of the UK’s insurance legislation (CIDRA 2012, Insurance Act 2015 and of course TPRAIA 2010 there has been very little “insurance” case law on the new statutes but in the last few weeks a number of cases considering the new TPRAIA have been reported.
Peel Port v Dornoch was a case arising from a fire, causing damage of more than £1m at Sheerness Docks. In this instance the defendant was not in liquidation but the PL insurer, Dornoch Ltd relied on a “hot working” endorsement and alleged that their insured was in breach of the condition. The insurer had provided details of terms but not the policy. The claimant made an application for pre-action disclosure of the policy. Pointing to the information that the new Act requires to be provided and suggesting that as the substantial claim was likely to trigger an insolvency that it would save costs and the court should exercise its discretion to order disclosure. It was accepted the policy would be a disclosable document in coverage proceedings (between policyholder and insurer) and would form part of the statutory disclosure required by TPRAIA 2010 but the judge noted that policyholder was not insolvent and possibility (or even likelihood) of insolvency of policyholder did not comprise sufficiently exceptional circumstances to exercise discretion and order pre-action disclosure of the insurance policy.
BAE Pension Fund Trustees v Bowers & Kirkland was a case that arose from defects in the design of a concrete slab which was laid by D3, a company which had become insolvent. An application was made to join D3’s insurers as a co-defendant. The policy provided that disagreement about coverage would be subject to French Law and any coverage dispute should be arbitrated. The insurer argued that the breach of a condition meant that there was no insurance and that TPRAIA 2010 did not apply. In addition the jurisdiction clause meant that an English Court could not hear the case. The court noted that s2 provided a mechanism for determining precisely the sort of dispute that the insurer argued ousted the Court’s ability to determine the dispute. It was not necessary for the claimant to establish that it was entitled to a policy indemnity for it to join the insurer as a party. The legislation allowed the insurer to pursue the coverage arguments but this was the time to argue those issues and they did not form an argument to resist being joined as a defendant.
Redman v Zurich & ESJS1; a “friendly fight” between parties to establish a precedent about the TPRAIA transitional provisions and whether the 1930 or 2010 Act applies. In this instance Mr Redman died from lung cancer on 5 November 2013 some years after he had worked for a company now known as ESJS1. His former employer (now sued by his widow) was the subject of a voluntary liquidation commencing on 30 January 2014 and culminating in dissolution on 30 June 2016. All these dates precede 1 August 2016, the commencement date of the newer TPRAIA. Argument had however been raised that the insured (ESJS1) had not incurred a liability, against which it was insured under the contract of insurance, until after 1/8/16 and that, as a consequence, the 2010 Act applied. If the claimant had succeeded on the point she could have brought an action directly against the insurer – if she so chose. However this point was abandoned (the judge confirming correctly so) as the liability of the employer was incurred when the cause of action is complete: in this case when the claimant (or deceased) suffered damage. The further submission of the claimant was that the 1930 and 2010 Acts can apply in parallel. Albeit that this was, to use the Judge’s word “brave” it, also, was not successful. Mr Justice Turner confirmed that where both “triggers” (the policyholders insolvency and the occurrence of damage) pre-date the 1/8/16 commencement then only the more restrictive 1930 Act applies
In each of these case there are “no surprises” to date and indeed many of the issues and questions above have been considered in the BLM TPRAIA Flowchart. Peel Port did try to push the boundaries but as the Judge noted the availability of insurance cover is a regular feature of litigation and it is for the claimant to take the defendant as he finds him – insurance may well be commercially relevant to the litigation but coverage documents are irrelevant to the issues. Therefore Peel Ports maintains the status quo – policy documents, absent insolvency, are not discoverable in a non-coverage case. BAE Pension Fund and Redman are both determined as we would have expected.
However, it is early days as far as the new law is concerned and there will be other more complex cases that will be decided on more obscure facts and difficult interpretations of the law: perhaps to be determined before TPRAIA celebrates its second Birthday.
Written by Terry Renouf, consultant at BLM and member of the firm’s Time for Change team.
The emergence of the Internet of Things (IoT – the interconnection of everyday objects via the internet) raises important issues relating to security and hacking. In particular, the potential for civil claims against manufacturers resulting from a failure to provide any or sufficient security is not known.
Four statutes this decade have significantly changed insurance contract law: the Third Party (Rights Against Insurers) Act 2010 (TPRAI), the Consumer Insurance (Disclosure and Representations) Act 2012, the Insurance Act 2015 and the Enterprise Act 2016. With this level of statutory reform it is perhaps hardly surprising that Mr Justice Turner decided, in Redman v Zurich on 26 July, against “an interpretation … tantamount to judicial legislation” when consider trigger dates for applying the TRPAI Act 2010 above.
Having been largely silent for a year about how to tackle the Vnuk problem (i.e. the extended scope of compulsory motor insurance to any normal use, anywhere, of any motor vehicle) the European Commission appears to have picked up the pace significantly in just announcing a new four-week consultation period running from 24 July to 21 August.
With Parliament taking a break for the summer we now have to wait until the Autumn for the Bill that will provide the legal underpinning of the changes to UK motor insurance that anticipates the introduction of autonomous vehicles. The notes to the Queen’s Speech in June explain that the main objective of the bill is “to ensure that compensation claims continue to be paid quickly, fairly and easily, in line with longstanding insurance practice.” No doubt the Bill, whenever introduced, is going to be very similar to the Vehicle Technology and Aviation Bill that Alistair discussed when that was introduced in (but did not survive) the last Parliament.
The Airmic Conference this year (June 2017) saw the publication of a paper considering the experience of practitioners in the ten months since implementation of the Insurance Act in August 2016. At this point the vast majority of commercial policyholders will have been through at least one Insurance Act process and thus a report from Airmic, which championed the reforms for that sector, does carry weight. At the conference, Huw Edwards also interrogated the “C-suite” Leadership Panel of brokers and insurers on their collective experience of the Act. The conclusion: so far so good but none wanted to be involved in the first dispute. Plainly the first judgment is going to attract considerable interest and commentary and so the reputational aspect is going to act as a weighty disincentive but which of the areas of the Act are working well and where are the first disputes likely to arise? Fair presentation, remedies for breach or policy terms?
2017 was intended to be a landmark year for the development of ‘genomic services’ – a term coined by the Department for Health in 2012 when it launched the Genomes project. Whilst this year’s initial deadline has passed and been pushed back to 2018, all signs are still pointing towards DNA sequencing being the next big revolution in healthcare advances, with the intention of sequencing 100,000 genomes from NHS patients.
In the early noughties, scientists were hard at work developing the publication of the first complete genome in an effort to provide a DNA bible by which future medicine would abide. However, in 2017 DNA sequencing is now making itself uncompromisingly known in the daily lives of healthcare practitioners in some of the most important fields of treatment.
Today, Star Wars Day, May the fourth 2017, marks the completion of the reform of UK insurance law that commenced in the middle of the noughties when the Law Commission picked up the task of reforming the Marine Insurance Act 1906. That Act oversaw and provided a framework for insurance as a product that has expanded both in value and type and to policyholders that could not have been foreseen when it was enacted 111 years ago. It largely stood the test of time and its concepts were (and are) exported internationally and so underpin the sector of the UK economy that originated in and which dominates London, EC3.
The final piece of the Insurance Act jigsaw applying to all policies commencing today is the “late payment” term and gives us the chance to review some of our earlier blogs. Continue reading
The late payment provisions introduced by the Enterprise Act 2016 will apply to insurance policies entered into from 4 May 2017, a date that will be very soon upon us. That said, on the basis that any claim made for late payment will have to be ‘late’ as provided for by the Act it’s likely that it’s going to be some time yet before under any such policy there’s been an insurance claim made; the passage of time during which insurers have made no payment; loss sustained allegedly as a result of delay and a claim for late payment formulated. But as the insurance industry has largely recognised the time for ensuring that there’s the appropriate ‘bullets to fire’ in place to deploy by way of a defence to such a late payment claim is now. Continue reading