Royal & Sun Alliance Insurance Plc v Dornoch Ltd & Ors [2004] EWHC 803 (Comm) (22 April 2004)

Royal & Sun Alliance Insurance Plc v Dornoch Ltd & Ors [2004] EWHC 803 (Comm) (22 April 2004)

The words 'loss or losses' in the Claims Control Clause of the reinsurance refer to the actual loss of third party claimants against the original insured (here, the claimants in the class actions against Coca Cola and its directors and officers). However, the obligation to notify reinsurers arises only when the reinsured has knowledge of an actual loss (not merely an alleged loss) that may give rise to a claim under the reinsurance. On the facts, at the relevant time, RSA only had knowledge of alleged losses, not actual losses, and thus was not in breach of the notification requirement.

Citation
[2004] EWHC 803 (Comm)
Parties
Claimant: Royal and Sun Alliance Insurance Plc; Defendants: Dornoch Limited and others
Jurisdiction
England and Wales
Judgment Date
22 April 2004
Procedural Posture
Commercial Court Trial / Judgment After Trial on Construction of Reinsurance Contract
Outcome
Declaration granted in favour of the Claimant (RSA).
Legal Topics
Reinsurance, Claims Control Clause, Condition Precedent, Notice Requirements, Directors and Officers Liability
Insurance Law Contract Law Reinsurance Claims Control Clause Condition Precedent Notice Requirements Directors and Officers Liability

Case Brief

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Parties

Royal and Sun Alliance Insurance Plc

Claimant

Dornoch Limited and others

Defendants

Procedural Posture

Commercial Court Trial / Judgment After Trial on Construction of Reinsurance Contract

Legal Issues

  1. 1 Whose 'loss' is referred to in the Claims Control Clause (CCC) of the reinsurance contract?
  2. 2 What constitutes 'knowledge of a loss which may give rise to a claim under the policy' for the purposes of the CCC?

Ratio Decidendi

The words 'loss or losses' in the Claims Control Clause of the reinsurance refer to the actual loss of third party claimants against the original insured (here, the claimants in the class actions against Coca Cola and its directors and officers). However, the obligation to notify reinsurers arises only when the reinsured has knowledge of an actual loss (not merely an alleged loss) that may give rise to a claim under the reinsurance. On the facts, at the relevant time, RSA only had knowledge of alleged losses, not actual losses, and thus was not in breach of the notification requirement.

Court Disposition

Declaration granted in favour of the Claimant (RSA).

Orders

  • Declaration that the Reinsurers are liable to indemnify RSA under the reinsurance contracts in respect of any losses sustained by RSA under the MSP in relation to the two class actions.