Court Of Appeal Upholds Decision In RFU

• Jurisdiction: European Union
• Law Firm: Gatehouse Chambers
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Author: Mr Ashley Allen
• Published date: 08 May 2023

FM Conway Limited (Appellant) v The Rugby Football Union, Royal & Sun Alliance Insurance PLC and Clark Smith Partnership Limited (Respondents) [2023] EWCA Civ 418

Gatehouse barristers acting in the case of Rugby Football Union v Clark Smith Partnership and FM Conway successfully resisted Conway's appeal against the decision of Eyre J, which dismissed Conway's attempts to establish a coinsurance defence to claims brought by the Rugby Football Union ("RFU").

In a further landmark decision on the extent of the coinsurance defence, the Court of Appeal held that the judge's approach (in determining the scope of cover under a joint names policy by reference principally to the terms of the underlying building contract between the parties) was correct. The Court of Appeal reaffirmed the principles laid down in National Oilwell (UK) Ltd v Davy Offshore Ltd, [1993] 2 Lloyd's Rep 582, and noted that "when the court considers authority and intention in the co-insurance context, it is inevitable that its investigations will start (and possibly finish) with the underlying contractual arrangements agreed between the parties."¹

The decision is the first at appellate level where the conclusions on coinsurance form part of the ratio. As such, the Court of Appeal's explanation of the relevant principles is essential reading for practitioners in this field.

Background

The underlying dispute relates to the upgrade works carried out at Twickenham Stadium in advance of the 2015 Rugby World Cup. The RFU brought claims of c. £4.5m in respect of cable ducting laid as part of an upgrade to the stadium infrastructure alleging that the ducting was defective, such that when high voltage cables were subsequently pulled through, they suffered damage.

The RFU was insured under a project insurance policy, with Royal Sun Alliance ("RSA") the principal underwriter together with following insurers. The policy indemnified the RFU in respect of the majority of its losses (c. £3.5m) and insurers are pursuing a subrogated claim.

RFU has brought claims against two defendants:

• Clark Smith Partnership ("CSP"), the designer of the ductwork, alleging that such design was defective; and
• FM Conway Limited ("Conway"), the construction contractor, alleging that the ductwork was defectively installed.

CSP and Conway deny liability, and pursue contribution claims against each other.

The coinsurance defence

Conway (both in its defence to the RFU's claim, and in its own separate Part 8 proceedings) sought...