Dunlop Haywards (DHL) Ltd & Ors v Barbon Insurance Group Ltd & Ors

Dunlop Haywards (DHL) Ltd & Ors v Barbon Insurance Group Ltd & Ors

The excess insurance policy, on its true construction, did not cover valuation activities and thus did not respond to the claims. There was no basis for rectification as the parties' common intention at the time of contract was for cover limited to commercial property management activities. HPC, as broker, breached its duties to the insured by failing to obtain the required cover and failing to identify or explain the limiting condition. Forbes, as placing broker, also breached its duties by failing to query or clarify the changed instructions. However, the primary responsibility lay with HPC, and contributory negligence was apportioned 80% to HPC and 20% to Forbes. Excess Insurers were...

Parties
Claimant: Dunlop Haywards (DHL) Ltd (in liquidation); Claimant: Erinaceous Commercial Property Services Ltd (in administration); Claimant: Nationwide Building Society; Defendant: Barbon Insurance Group Limited; Defendant: MSI Corporate Capital Limited; Defendant: D. A. Constable & Others (Lloyd’s Syndicate 386); Defendant: Württembergische Versicherung AG; Defendant: W. R. Berkley Insurance (Europe); Defendant: Markel International Insurance Company Limited; Defendant: ACE European Group Limited; Third Party: Lockton Companies International Limited
Jurisdiction
England and Wales
Judgment Date
19 November 2009
Procedural Posture
Commercial Insurance Dispute / Judgment After Full Trial
Outcome
Claim against Excess Insurers dismissed; claim against HPC succeeds; HPC's claim against Forbes succeeds subject to 80% reduction for contributory negligence.
Legal Topics
Brokers' Duties, Policy Construction, Rectification, Contributory Negligence, Professional Indemnity Insurance
Insurance Law Professional Negligence Contract Law Brokers' Duties Policy Construction Rectification Contributory Negligence Professional Indemnity Insurance

Case Brief

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Parties

Dunlop Haywards (DHL) Ltd (in liquidation)

Claimant

Erinaceous Commercial Property Services Ltd (in administration)

Claimant

Nationwide Building Society

Claimant

Barbon Insurance Group Limited

Defendant

MSI Corporate Capital Limited

Defendant

D. A. Constable & Others (Lloyd’s Syndicate 386)

Defendant

Württembergische Versicherung AG

Defendant

W. R. Berkley Insurance (Europe)

Defendant

Markel International Insurance Company Limited

Defendant

ACE European Group Limited

Defendant

Lockton Companies International Limited

Third Party

Procedural Posture

Commercial Insurance Dispute / Judgment After Full Trial

Legal Issues

  1. 1 Whether the excess insurance policy covered valuation claims by DHL/DH
  2. 2 Whether the policy should be rectified to reflect parties' intentions
  3. 3 Whether the brokers (HPC and Forbes) breached duties to the insured

Ratio Decidendi

The excess insurance policy, on its true construction, did not cover valuation activities and thus did not respond to the claims. There was no basis for rectification as the parties' common intention at the time of contract was for cover limited to commercial property management activities. HPC, as broker, breached its duties to the insured by failing to obtain the required cover and failing to identify or explain the limiting condition. Forbes, as placing broker, also breached its duties by failing to query or clarify the changed instructions. However, the primary responsibility lay with HPC, and contributory negligence was apportioned 80% to HPC and 20% to Forbes. Excess Insurers were...

Court Disposition

Claim against Excess Insurers dismissed; claim against HPC succeeds; HPC's claim against Forbes succeeds subject to 80% reduction for contributory negligence.

Orders

  • Claimants' claim against Excess Insurers dismissed.
  • Claimants recover £10 million from HPC.