Komives v Hick Lane Bedding Ltd & Anor [2020] EWHC 3288 (QB) (12 March 2020)

Komives v Hick Lane Bedding Ltd & Anor [2020] EWHC 3288 (QB) (12 March 2020)

The insurer was entitled to avoid the policy at common law due to material non-disclosure and misrepresentation regarding use of trafficked labour, health and safety regime, and wage roll. ICOBS 8.1.1 did not impose a substantive reasonableness test preventing avoidance. The claimants, as innocent third parties,...

Source-derived case information.

Citation
[2020] EWHC 3288 (QB)
Parties
Claimant: Attila Komives; Claimant: Josef Varhelyi; Defendant: Hick Lane Bedding Ltd; Defendant: AM Trust Europe Ltd
Jurisdiction
England and Wales
Judgment Date
12 March 2020
Procedural Posture
Preliminary Issues in Civil Claim (insurance Avoidance) / Judgment After Trial of Preliminary Issues
Outcome
Claims against AmTrust dismissed; insurer entitled to avoid policy; no right of indemnity for claimants.
Legal Topics
Material Non Disclosure, Misrepresentation, Employers' Liability Insurance, Modern Slavery, Policy Avoidance, Third Parties (rights Against Insurers) Act 1930, ICOBS Claims Handling, Statutory Protection Gaps
Insurance Law Employment Law Personal Injury Material Non Disclosure Misrepresentation Employers' Liability Insurance Modern Slavery Policy Avoidance +3 more

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Summary, issues, holding and outcome

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Parties

Attila Komives

Claimant

Josef Varhelyi

Claimant

Hick Lane Bedding Ltd

Defendant

AM Trust Europe Ltd

Defendant

Procedural Posture

Preliminary Issues in Civil Claim (insurance Avoidance) / Judgment After Trial of Preliminary Issues

Legal Issues

  1. 1 Whether AmTrust was entitled to avoid the policy for material non-disclosure and/or misrepresentation
  2. 2 Whether the policy had been validly avoided
  3. 3 Whether the claimants have a valid claim against AmTrust under the Third Parties (Rights Against Insurers) Act 1930

Ratio Decidendi

The insurer was entitled to avoid the policy at common law due to material non-disclosure and misrepresentation regarding use of trafficked labour, health and safety regime, and wage roll. ICOBS 8.1.1 did not impose a substantive reasonableness test preventing avoidance. The claimants, as innocent third parties, could not override the insurer's right to avoid. The statutory scheme does not close the protection gap for employees in such circumstances.

Court Disposition

Claims against AmTrust dismissed; insurer entitled to avoid policy; no right of indemnity for claimants.

Orders

  • Declaration that AmTrust validly avoided the policy ab initio
  • Claimants' claims under the Third Parties (Rights Against Insurers) Act 1930 dismissed