(Re)Insurance Weekly Update 39 - 2018

A summary of recent developments in insurance, reinsurance and litigation law.

Haven Insurance Co Ltd v EUI Ltd: Court of Appeal allows extension of time to commence arbitration proceedings

http://www.bailii.org/ew/cases/EWCA/Civ/2018/2494.html

The appellant and respondent are both motor insurers and members of the Motor Insurers Bureau ("MIB"). Following a dispute about liability to indemnify a road traffic accident victim, a meeting took place in February 2015 at which MIB's Technical Committee determined that the respondent was liable.

MIB's Articles provide that a member can appeal a decision of the Technical Committee to an arbitrator, if the member gives written notice of appeal within 30 days of "being notified of the decision of the Technical Committee". The respondent gave written notice more than 30 days after the February meeting and a subsequent email from MIB's secretariat confirming the decision at the meeting.

However, the respondent successfully argued before the arbitrator that it was settled practice by MIB that time for an appeal only started to run from the date the minutes of the meeting were circulated (and the respondent had given notice within that timeframe). The appellant appealed to the court and at first instance Knowles J accepted that the appeal had been out of time but gave permission under section 12 of the Arbitration Act 1996 to extend time to start the arbitration. The appellant's appeal from that decision has now been rejected by the Court of Appeal.

Section 12)(3) of the Act provides that the court can only extend time to start arbitration if:

The circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision in question, and that it would be just to extend the time, or The conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question. The Court of Appeal held that the "slight gloss" applied by Waller LJ in [2000], designed to avoid absurdity where, for example, a party which had failed to read the relevant provision could be entitled to a time extension, was unnecessary because of the second limb of section 12(3).

Knowles J had made 3 key findings of fact:

The respondent believed "reasonably if wrongly" that it had 30 days from receipt of the minutes to appeal That belief was in line with a "widely accepted interpretation" shared by MIB MIB had confirmed it was its custom and practice to allow 30 days from...