(Re)Insurance Weekly Update 5 - 2015

Welcome to the fifth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2015.

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

Impact Funding v Barrington The Court of Appeal determines whether a PI insurer is obliged to indemnify a solicitor who is liable to a disbursements funder. Rai v Legal & General Assurance Society A case on whether an insured should be restored to the Companies Register in order to allow a beneficiary to claim. Sierra Fishing v Farran An application to remove an arbitrator and whether a party had taken part in the arbitral proceedings. Bishop v Chhokar A decision on whether a refusal to give permission to appeal should be set aside where the respondent had lied at trial. Impact Funding v Barrington

Whether PI insurer obliged to indemnify solicitor who is liable to disbursements funder

http://www.bailii.org/ew/cases/EWCA/Civ/2015/31.html

A firm of solicitors arranged funding for disbursements incurred by its clients in order to bring their personal injury claims. When several of those claims were abandoned (because of limitation issues or because they were intrinsically unmeritorious), the funders sought recovery. Where the clients' legal expenses or after the event insurers did not pay (because, for example, the policy had been avoided), the funders sought recovery instead from the solicitors. The issue in this case was whether the solicitors' professional indemnity insurers were obliged to indemnify the solicitors in respect of their liability to the funders.

The answer to that issue turned on the interpretation of an exclusion in the professional indemnity insurance policy which excluded cover for any "(a) trading or personal debt of any insured, or (b) breach by any insured of the terms of any contract or arrangement for the supply to, or use by, any insured of goods or services in the course of the Insured Firm's Practice".

The Court of Appeal held that to determine whether the exclusion applied, it was necessary "to stand back from the detail and ask oneself what is the essential purpose" of this exclusion. It found that it was to prevent insurers being liable for a solicitor's liabilities "in respect of those aspects of his practice which might affect him or her personally as opposed to liabilities arising from his professional obligations to his or her client". So, for example, PI...