Weekly Update- A Summary Of Recent Developments In Insurance, Reinsurance And Litigation Law - 22/11

This Week's Caselaw

John Youngs v Aviva

Fiduciary duties under an insurance claims handling agreement

http://www.bailii.org/ew/cases/EWHC/TCC/2011/1515.html

The claimant and the defendant insurance company entered into an agreement, whereby the claimant handled claims for the insurer and undertook building repair work where the damage was insured. Following a termination of the agreement, the claimant sought further payment and the insurer counterclaimed. Of issue in this case was whether the claimant owed a fiduciary duty to account and whether the insurer was entitled to an account and enquiry.

Ramsey J concluded as follows:

(1) A distinction had to be made between the different obligations imposed on the claimant under the agreement. Where the claimant acted as the insurer's agent in deciding whether a claim was valid, the insurer was trusting it to act loyally in the insurer's best interests and so a fiduciary relationship arose. However, in producing estimates of the work to be done, there was no fiduciary relationship - instead that was a commercial relationship. Similarly, the claimant was not acting as a fiduciary when it provided building repair services.

(2) This was not a case where the claimant controlled property or money belonging to the insurer. The claimant owed an equitable duty to account only when it validated or repudiated a claim. However, not all the information requested by the insurer related to this aspect of the claimant's activities.

(3) A duty to account did, however, arise separately under the agreement as well and, on the facts, this duty continued after the termination of the agreement.

Wright v Cambridge Medical Group

Medical negligence claim and causation where both GP and hospital were negligent

http://www.bailii.org/ew/cases/EWCA/Civ/2011/669.html

The defendant GP failed to examine the claimant. Had he done so, he would have realised that she ought to be transferred to hospital. Two days passed before she was referred. However, the hospital failed to give her the necessary medication for a further two days and by that time her injury was permanent. She sued the GP but the hospital was not joined to the proceedings. At first instance the judge dismissed the claim on the basis that even if she had been referred to hospital earlier, she would not have been treated properly and would have suffered permanent injury anyway.

By a majority of 2:1, the Court of Appeal has allowed the claimant's appeal.

Lord...