Cape Distribution Ltd v Cape Intermediate Holdings Plc [2016] EWHC 1786 (QB) (19 July 2016)

Cape Distribution Ltd v Cape Intermediate Holdings Plc [2016] EWHC 1786 (QB) (19 July 2016)

Section 7(3)(a) of the 1978 Act precludes CIH from claiming contribution against CDL where CDL is entitled to a contractual indemnity. For mesothelioma 'straddler' claims, Aviva is precluded from pursuing subrogated claims against CIH for any period where co-insurance existed, including post-25 November 1964, due to the subrogation bar. The existence of co-insurance and the pervasive connection of interests between CDL and CIH mean that Aviva cannot recover from CIH in respect of the same loss. Limitation issues are to be determined based on when claims were made or liabilities incurred, but specific findings on time-barred claims are deferred.

Citation
[2016] EWHC 1786 (QB)
Parties
Claimant/part 20 Defendant: Cape Distribution Limited; Defendant/part 20 Claimant: Cape Intermediate Holdings PLC
Jurisdiction
England and Wales
Judgment Date
19 July 2016
Procedural Posture
Commercial Contract/insurance Dispute / Post Preliminary Issues, Determination of Further Issues Before Main Trial
Outcome
CIH is precluded from claiming contribution against CDL under the 1978 Act due to the contractual indemnity. Aviva is precluded from pursuing subrogated claims against CIH for 'straddler' mesothelioma claims where co-insurance existed. Consequential orders on dismissal of CIH's counterclaims and limitation issues...
Legal Topics
Contractual Indemnity, Contribution Under Civil Liability (contribution) Act 1978, Subrogation and Co Insurance, Limitation Periods, Mesothelioma and Asbestos Claims, Compensation Act 2006, Divisible and Indivisible Disease Claims
Contract Law Insurance Law Tort Law Civil Procedure Contractual Indemnity Contribution Under Civil Liability (contribution) Act 1978 Subrogation and Co Insurance Limitation Periods +3 more

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Parties

Cape Distribution Limited

Claimant/part 20 Defendant

Cape Intermediate Holdings PLC

Defendant/part 20 Claimant

Procedural Posture

Commercial Contract/insurance Dispute / Post Preliminary Issues, Determination of Further Issues Before Main Trial

Legal Issues

  1. 1 Effect of section 7(3)(a) of the Civil Liability (Contribution) Act 1978 on CIH's counterclaims
  2. 2 Whether Aviva is precluded from pursuing indemnities in 'straddler' cases (employees exposed to asbestos before and after 25 November 1964)
  3. 3 When limitation periods start to run for CDL's claims based on contractual indemnities and whether any claims are time-barred

Ratio Decidendi

Section 7(3)(a) of the 1978 Act precludes CIH from claiming contribution against CDL where CDL is entitled to a contractual indemnity. For mesothelioma 'straddler' claims, Aviva is precluded from pursuing subrogated claims against CIH for any period where co-insurance existed, including post-25 November 1964, due to the subrogation bar. The existence of co-insurance and the pervasive connection of interests between CDL and CIH mean that Aviva cannot recover from CIH in respect of the same loss. Limitation issues are to be determined based on when claims were made or liabilities incurred, but specific findings on time-barred claims are deferred.

Court Disposition

CIH is precluded from claiming contribution against CDL under the 1978 Act due to the contractual indemnity. Aviva is precluded from pursuing subrogated claims against CIH for 'straddler' mesothelioma claims where co-insurance existed. Consequential orders on dismissal of CIH's counterclaims and limitation issues...