Synergy Health (UK) Ltd v CGU Insurance Plc (t/a Norwich Union) & Ors

Synergy Health (UK) Ltd v CGU Insurance Plc (t/a Norwich Union) & Ors

The insurers were not entitled to avoid the policy because, although there was a material misrepresentation, they failed to prove inducement; had the true position been disclosed, the insurers would not have imposed a condition or refused renewal. Synergy is entitled to indemnity under the policy. The brokers were not in breach of duty causative of loss.

Parties
Claimant: Synergy Health (UK) Limited; 1st Defendant: CGU Insurance PLC (T/A Norwich Union); 2nd Defendant: AXA Insurance UK PLC; 3rd Defendant: Allianz Cornhill Insurance PLC; 4th Defendant: Royal and Sun Alliance Insurance PLC; 5th Defendant: Towergate TLC Limited (formerly known as THB Clowes Ltd)
Jurisdiction
England and Wales
Judgment Date
19 October 2010
Procedural Posture
Commercial Insurance Dispute / Judgment After Full Trial
Outcome
Claim allowed for the claimant; insurers liable to indemnify Synergy under the policy; alternative claim against brokers dismissed.
Legal Topics
Material Non Disclosure, Misrepresentation, Inducement, Brokers' Duties, Business Interruption Insurance, Policy Avoidance
Insurance Law Commercial Law Professional Negligence Material Non Disclosure Misrepresentation Inducement Brokers' Duties Business Interruption Insurance +1 more

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Parties

Synergy Health (UK) Limited

Claimant

CGU Insurance PLC (T/A Norwich Union)

1st Defendant

AXA Insurance UK PLC

2nd Defendant

Allianz Cornhill Insurance PLC

3rd Defendant

Royal and Sun Alliance Insurance PLC

4th Defendant

Towergate TLC Limited (formerly known as THB Clowes Ltd)

5th Defendant

Procedural Posture

Commercial Insurance Dispute / Judgment After Full Trial

Legal Issues

  1. 1 Whether insurers were entitled to avoid the insurance policy for material non-disclosure and/or misrepresentation
  2. 2 Whether there was a material misrepresentation or non-disclosure at renewal
  3. 3 Whether the brokers breached their duties to the insured

Ratio Decidendi

The insurers were not entitled to avoid the policy because, although there was a material misrepresentation, they failed to prove inducement; had the true position been disclosed, the insurers would not have imposed a condition or refused renewal. Synergy is entitled to indemnity under the policy. The brokers were not in breach of duty causative of loss.

Court Disposition

Claim allowed for the claimant; insurers liable to indemnify Synergy under the policy; alternative claim against brokers dismissed.

Orders

  • Insurers to indemnify Synergy for material damage (£4 million) and business interruption losses (subject to deductions and findings on quantum).
  • Interest awarded at 1% above base rate from 1 April 2007 to date.