Charman v New Cap Reinsurance Corporation Ltd [2003] EWCA Civ 1372 (16 October 2003)

Charman v New Cap Reinsurance Corporation Ltd [2003] EWCA Civ 1372 (16 October 2003)

The premium review clause was not validly invoked for the 1999 year of account based on extraordinary claims development in 1998; invocation in 1997 could not constitute a continuing act for subsequent years; nomination of a new premium was required for valid invocation and did not occur; the contract did not lapse automatically upon invocation but continued absent agreement or nomination.

Citation
[2003] EWCA Civ 1372
Parties
Claimant/appellant: John Robert Charman (suing on his own behalf and on behalf of all other members of Lloyd's Syndicates 488 and 2488); Defendant/respondent: New Cap Reinsurance Corporation Ltd (in liquidation)
Jurisdiction
England and Wales
Judgment Date
16 October 2003
Procedural Posture
Appeal From Queen's Bench Division, Commercial Court / Court of Appeal Judgment
Outcome
Appeal allowed in part; Syndicates succeed regarding 1999 year of account.
Legal Topics
Reinsurance Contracts, Premium Review Clauses, Contract Termination, Notice Requirements, Waiver and Estoppel
Insurance Law Contract Law Reinsurance Contracts Premium Review Clauses Contract Termination Notice Requirements Waiver and Estoppel

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Parties

John Robert Charman (suing on his own behalf and on behalf of all other members of Lloyd's Syndicates 488 and 2488)

Claimant/appellant

New Cap Reinsurance Corporation Ltd (in liquidation)

Defendant/respondent

Procedural Posture

Appeal From Queen's Bench Division, Commercial Court / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the premium review clause was validly invoked for the 1999 year of account based on extraordinary claims development in 1998
  2. 2 Whether nomination of a new premium was required for valid invocation
  3. 3 Whether the contract lapsed automatically upon invocation of the clause or continued absent agreement on premium

Ratio Decidendi

The premium review clause was not validly invoked for the 1999 year of account based on extraordinary claims development in 1998; invocation in 1997 could not constitute a continuing act for subsequent years; nomination of a new premium was required for valid invocation and did not occur; the contract did not lapse automatically upon invocation but continued absent agreement or nomination.

Court Disposition

Appeal allowed in part; Syndicates succeed regarding 1999 year of account.

Orders

  • No provision for 1999 year of account; contract continued at established premium absent valid invocation and nomination.