Surely, I'm Insured?! Is A Defendant Insured Only When Sure The Insurer Will Pay Out?

• Published date: 01 November 2021
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Gatehouse Chambers
• Author: Miguel Henderson

Miguel Henderson and Amy Held take a look at Buttar Construction Ltd v Arshdeep [2021] EWCA Civ 1408

Background

The Claimant was employed as a labourer by the Second Defendant ('YKS') who, in turn, were engaged by the Appellant Fourth Defendant ('Buttar') as an independent brickwork contractor. The First and Third Defendants were individuals who controlled the Second and Fourth Defendants. The Claimant suffered catastrophic injuries at a building site and brought proceedings in negligence against, inter alia, YKS, as his employer; and Buttar, as the main contractor on site. The Court recognised that there was a compelling need for an interim payment to fund an appropriate rehabilitation package for the Claimant if he was able to satisfy the legal requirements for obtaining the same.

The Law

CPR 25.7(1)(e) provides:

"(1) The court may only make an order for an interim payment where any of the following conditions are satisfied -

[.]

(e) in a claim in which there are two or more defendants and the order is sought against any one or more of those defendants, the following conditions are satisfied -

(i). the court is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against at least one of the defendants (but the court cannot determine which); and

(ii). all the defendants are either -

(a) a defendant that is insured in respect of the claim;

[...]

The Court Below

YKS and Buttar had taken out Employers' Liability and Public Liability policies respectively. Both insurers reserved their rights and neither policy had been disclosed. The question raised (and the focus of this case comment) was whether in these circumstances YKS and Buttar could be said to be "insured in respect of the claim".

At first instance, HHJ Bird, having satisfied himself that the damages in the case would be substantial, considered whether the Defendants were "insured in respect of the claim" for the purposes of CPR 25.7(1)(e)(ii)(a). He held that:

"it may be in due course that one or the other [insurers] will repudiate, but until repudiation takes place (whether the repudiation has the effect of completely rendering the policy void ab initio [.] or not) as of today the defendants are insured."

HHJ Bird held that the pre-conditions specified in CPR 25.7(1)(e) were satisfied, but also recognised that this only meant he had a discretion under the rule. HHJ Bird took the view that whether or not the...