Royal and Sun Alliance Insurance Ltd & Ors v Tughans [2023] EWCA Civ 999 (31 August 2023)

Royal and Sun Alliance Insurance Ltd & Ors v Tughans [2023] EWCA Civ 999 (31 August 2023)

Compulsory professional indemnity insurance for solicitors covers liability for repayment of fees received and earned under a contract, even if procured by misrepresentation, provided the contract has not been rescinded and the claim is for damages rather than restitution. The indemnity principle does not preclude...

Source-derived case information.

Citation
[2023] EWCA Civ 999
Parties
Claimant/appellant: Royal and Sun Alliance Insurance Limited; Claimant/appellant: Zurich Insurance PLC UK Branch; Claimant/appellant: Allianz Global Corporate and Specialty SE; Claimant/appellant: The Member(s) of Lloyd's Syndicate 2526 (AG Dore) for the 2014 Year of Account; Claimant/appellant: The Member(s) of Lloyd's Syndicate 2001 (Amlin) for the 2014 Year of Account; Claimant/appellant: The Member(s) of Lloyd's Syndicate 2007 (Novae) for the 2014 Year of Account; Claimant/appellant: AIG Europe Limited; Claimant/appellant: The Member(s) of Lloyd's Syndicate 1200 (Argo International) for the 2014 Year of Account; Claimant/appellant: XL Insurance Company SE; Claimant/appellant: Catlin Insurance Company (UK) Limited; Claimant/appellant: The Member(s) of Lloyd's Syndicate 1861 (AmTrust) for the 2014 Year of Account; Defendant/respondent: Tughans (a firm)
Jurisdiction
England and Wales
Judgment Date
31 August 2023
Procedural Posture
Appeal From Arbitration Under S.69 Arbitration Act 1996 / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Professional Indemnity Insurance, Solicitors' Liability, Indemnity Principle, Composite Insurance Policies, Fraud and Misrepresentation, Restitution Vs Damages, Public Policy in Compulsory Insurance
Insurance Law Professional Negligence Contract Law Professional Indemnity Insurance Solicitors' Liability Indemnity Principle Composite Insurance Policies Fraud and Misrepresentation +2 more

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Parties

Royal and Sun Alliance Insurance Limited

Claimant/appellant

Zurich Insurance PLC UK Branch

Claimant/appellant

Allianz Global Corporate and Specialty SE

Claimant/appellant

The Member(s) of Lloyd's Syndicate 2526 (AG Dore) for the 2014 Year of Account

Claimant/appellant

The Member(s) of Lloyd's Syndicate 2001 (Amlin) for the 2014 Year of Account

Claimant/appellant

The Member(s) of Lloyd's Syndicate 2007 (Novae) for the 2014 Year of Account

Claimant/appellant

AIG Europe Limited

Claimant/appellant

The Member(s) of Lloyd's Syndicate 1200 (Argo International) for the 2014 Year of Account

Claimant/appellant

XL Insurance Company SE

Claimant/appellant

Catlin Insurance Company (UK) Limited

Claimant/appellant

The Member(s) of Lloyd's Syndicate 1861 (AmTrust) for the 2014 Year of Account

Claimant/appellant

Tughans (a firm)

Defendant/respondent

Procedural Posture

Appeal From Arbitration Under S.69 Arbitration Act 1996 / Court of Appeal Judgment

Legal Issues

  1. 1 Whether compulsory professional indemnity insurance for solicitors covers liability for repayment of fees received as a result of misrepresentation or fraud
  2. 2 Whether the indemnity principle precludes cover for such liabilities
  3. 3 Whether the policy wording or public policy limits cover for fees to which the solicitor was not 'entitled in substance'

Ratio Decidendi

Compulsory professional indemnity insurance for solicitors covers liability for repayment of fees received and earned under a contract, even if procured by misrepresentation, provided the contract has not been rescinded and the claim is for damages rather than restitution. The indemnity principle does not preclude cover for such losses, as the solicitor suffers a real loss in being deprived of remuneration for services provided. The policy wording is broad and, in the absence of fraud or condonation by the claiming insured, extends to such liabilities. Public policy and the composite nature of the policy reinforce this conclusion.

Court Disposition

Appeal dismissed

Orders

  • The appeal by the insurers is dismissed.