Insurance And Reinsurance Weekly Update - 18 June 2013

Welcome to the twenty-second edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2013.

These updates are aimed at keeping you up to speed and informed of the latest developments in caselaw relevant to your practice.

This week's caselaw

Gleeson Group v Axa Corporate Solutions Court decides whether an extension to a public liability policy was a stand-alone insuring clause and the meaning of a "claim" against the insured.

AES LLP v JSC The Supreme Court upholds a court's power to grant an anti-suit injunction to restrain foreign (non-EU) proceedings brought in breach of an arbitration agreement.

Crawford Adjusters v Sagicor The Privy Council recognises the tort of malicious prosecution of civil proceedings.

Group Seven v Allied Investment A case on the scope of a freezing order and whether it extends to assets in a company owned by a sole shareholder/director.

Atrium Trading v Connor Williams Court decides whether an extension of time to comply with disclosure obligations should be granted.

Euromark v Smash Enterprises A decision on whether the English court should uphold an exclusive jurisdiction clause in favour of Australia.

Al Saud & Anor v Apex Global Management A case on the scope of sovereign immunity for family members "forming part of his household".

Other News The FCA confirms that firms which may have actual or potential Employers' Liability insurance claims must conduct effective searches.

Gleeson Group v Axa Corporate Solutions

Whether an extension to a public liability policy was a stand-alone insuring clause/the meaning of a "claim" against the insured

The insured, the main contractor on a development, sought a declaration that it was entitled to an indemnity. Insuring Clause 1 of the Public Liability section of its policy provided cover, in the usual way, for sums which the insured became legally liable to pay for (inter alia) "damage to property". The insured had taken out additional cover for the defective workmanship of its sub-contractors under the Public Liability section. This extension was worded as follows: "This Section of the Policy extends to indemnify the insured in respect of legal liability arising from the defective workmanship of their subcontractors....provided that 1) a claim is first made against the Insured or notification given...by the Insured of circumstances which might lead to a claim during the Period of Insurance". Raynor QC HHJ considered the following issues:

(1) Did the extension require damage to property or was it a stand-alone insuring clause? The judge considered Tesco Stores v Constable (see Weekly Updates 36/07 and 16/08), but concluded that it was of little assistance in this case because the policy there had been an entirely conventional Public Liability policy, whereas here the extension "provided cover considerably more extensive than that provided by a conventional Public Liability policy". He held that the extension was not intended to be a self-contained insuring clause.

The wording "This Section of the Policy extends to indemnify" indicated that the extension was to be governed by Insuring Clause 1. The judge's view was reinforced by the use of the words "The Company [ie insurer] will indemnify" for other policy extensions (that wording being apt to show that those extensions were not to be governed by Insuring Clause 1). It made no difference that there was no express reference to "damage to property" in the relevant extension. Furthermore, it would have been "extraordinary" for the extension to effectively guarantee the workmanship of the sub-contractors, and clear wording would have been needed to achieve that effect (and even, possibly, "some other description of the cover" (as per Tuckey LJ in the Tesco judgment)).

(2) The insured had received a letter from an agent of the funder of the development (rather than the property owner) which referred to various problems with the development (and enclosing a report detailing the alleged defects) and requesting comments on the report "together with your proposals for rectifying these apparent deficiencies". The judge concluded that, although the letter constituted more than a mere request for information - and was also an expression of discontent - it did not amount to a "claim" against the insured...