A Summary of Recent Developments in Insurance, Reinsurance and Litigation Law

This Week's Caselaw

Emerald Supplies & Anor v British Airways Plc Court of Appeal decision on criteria for representative actions

http://www.bailii.org/ew/cases/EWCA/Civ/2010/1284.html

The claimants commenced proceedings against BA seeking damages for alleged price fixing of air freight services. The claimants sought collective redress for consumers of the services and so claimed on their own behalf and as representatives of all other "direct or indirect purchasers of air freight services the prices for which were allegedly inflated by agreements or concerted practices". CPR r19.6 provides that a representative action can be begun or continued by one or more persons who have the "same interest" as any other persons who have that interest. The Chancellor of the High Court (in a decision reported in Weekly Update 15/09) struck out the representative element of the claim and the claimants appealed.

The Court of Appeal has now dismissed the appeal. It held that:

The Chancellor said that the more extensive the class, the more clearly the other pre-conditions under CPR r19.6 should be satisfied. However, he did not lay down any distinct condition about the size of the class of persons to be represented. At all stages of the proceedings, and not just at the date of judgment at the end, it must be possible to say of any particular person that he/she has the "same interest" as the claimants. This does not mean that the membership of the group must remain constant and closed throughout. However, the problem here was not about changing membership. It was instead about how to determine whether or not a person is a member of the represented class at all. Judgment on liability would have to be obtained before it could be said that the interests of the persons whom the claimants seek to represent are the same. Furthermore, the members of the proposed class would not have the same interest if a defence is available against some of them but not others. For example, in certain cases, purchasers might have passed on the inflated price to their own customers: "If there is liability to some customers and not to others they have different interests, not the same interest, in the action". As the case fell outside of CPR r19.6, it was not necessary to consider whether the court should have refused to exercise its discretion to strike out the representative claim. Linklaters v McAlpine & Ors

Scope of duty of care where element of building causes damage to other parts

http://www.bailii.org/ew/cases/EWHC/TCC/2010/2931.html

Clyde & Co (Victor Rae-Reeves and Monique Brostek) for Brit Insurance, the insurers of Southern

Linklaters, the lessee and occupier of a building, contracted with a developer who in turn employed McAlpine as the main contractor to undertake refurbishment works. McAlpine sub-contracted the mechanical and electrical works (which included the insulated pipework for the building's air-conditioning system) to How, who in turn sub-sub-contracted the installation of the insulation works to Southern. Some 10 years after completion of the work, a leak from one of the pipes which served the air-conditioning system led to...