Aviva Insurance Ltd & Anor v Secretary of State for Work and Pensions [2022] EWCA Civ 15 (14 January 2022)

Aviva Insurance Ltd & Anor v Secretary of State for Work and Pensions [2022] EWCA Civ 15 (14 January 2022)

The Court of Appeal held that the 1997 Act and regulations, as applied to the first three situations (contributory negligence CRU payments, divisible disease CRU payments, indivisible disease CRU payments with missing contributors), failed to strike a fair balance and infringed insurers' A1P1 rights. The scheme was not rationally connected to the legitimate aim of recovering costs attributable to wrongdoing, nor was it no more than necessary. The fourth situation (CRU certificates not matching a head of loss) was rationally connected and justified. The Secretary of State's appeal was dismissed in respect of the first three situations; the insurers' cross-appeal on the fourth situation was...

Citation
[2022] EWCA Civ 15
Parties
Claimant/respondent: Aviva Insurance Limited; Claimant/respondent: Swiss Reinsurance Company Limited; Defendant/appellant: Secretary of State for Work and Pensions
Jurisdiction
England and Wales
Judgment Date
14 January 2022
Procedural Posture
Appeal and Cross Appeal From High Court (administrative Court) / Court of Appeal Judgment
Outcome
Secretary of State's appeal dismissed in respect of first three situations; insurers' cross-appeal rejected on fourth situation.
Legal Topics
Compatibility of Social Security (recovery of Benefits) Act 1997 With ECHR A1 P1, State Benefit Recovery in Personal Injury Claims, Liability of Insurers for CRU Payments, Fair Balance Under A1 P1, Retrospective Effect of Legislation
Human Rights Insurance Law Administrative Law Personal Injury Compatibility of Social Security (recovery of Benefits) Act 1997 With ECHR A1 P1 State Benefit Recovery in Personal Injury Claims Liability of Insurers for CRU Payments Fair Balance Under A1 P1 +1 more

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Parties

Aviva Insurance Limited

Claimant/respondent

Swiss Reinsurance Company Limited

Claimant/respondent

Secretary of State for Work and Pensions

Defendant/appellant

Procedural Posture

Appeal and Cross Appeal From High Court (administrative Court) / Court of Appeal Judgment

Legal Issues

  1. 1 Does the Social Security (Recovery of Benefits) Act 1997 and regulations infringe insurers' rights under Article 1 Protocol 1 (A1P1) ECHR?
  2. 2 Is the scheme for CRU payments compatible with the Human Rights Act 1998?
  3. 3 Should the Act be read down or regulations made to limit insurer liability?

Ratio Decidendi

The Court of Appeal held that the 1997 Act and regulations, as applied to the first three situations (contributory negligence CRU payments, divisible disease CRU payments, indivisible disease CRU payments with missing contributors), failed to strike a fair balance and infringed insurers' A1P1 rights. The scheme was not rationally connected to the legitimate aim of recovering costs attributable to wrongdoing, nor was it no more than necessary. The fourth situation (CRU certificates not matching a head of loss) was rationally connected and justified. The Secretary of State's appeal was dismissed in respect of the first three situations; the insurers' cross-appeal on the fourth situation was...

Court Disposition

Secretary of State's appeal dismissed in respect of first three situations; insurers' cross-appeal rejected on fourth situation.

Orders

  • Declaration that Secretary of State acted unlawfully by failing to read down the 1997 Act to permit reduction in quantum of benefits paid by insurers in first three situations from 2 October 2000 and 1 January 2003.
  • Liberty to insurers to apply to quash CRU certificate issued on 7 February 2019 in sum of £39,144.50 (Bainbridge case).