Royal and Sun Alliance Insurance Limited & Ors v Tughans

Royal and Sun Alliance Insurance Limited & Ors v Tughans

A solicitor who has contractually earned a fee suffers a loss if deprived of it by reason of a liability claim, even if the fee was procured by misrepresentation; the indemnity principle does not preclude cover for such loss under compulsory professional indemnity insurance, and the policy wording covers civil liability including damages claims for fees.

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
11 October 2024
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
appeal dismissed
Legal Topics
Professional Indemnity Insurance, Solicitors' Liability, Indemnity Principle, Misrepresentation, Damages, Composite Insurance Policies
Insurance Law Professional Negligence Contract Law Professional Indemnity Insurance Solicitors' Liability Indemnity Principle Misrepresentation Damages +1 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

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether compulsory professional indemnity insurance for solicitors covers liabilities including the firm's fees when the fee was allegedly procured by misrepresentation
  2. 2 Whether the indemnity principle precludes cover for loss of a fee to which the solicitor was never substantively entitled

Ratio Decidendi

A solicitor who has contractually earned a fee suffers a loss if deprived of it by reason of a liability claim, even if the fee was procured by misrepresentation; the indemnity principle does not preclude cover for such loss under compulsory professional indemnity insurance, and the policy wording covers civil liability including damages claims for fees.

Court Disposition

appeal dismissed

Orders

  • Insurers are liable to indemnify Tughans in respect of damages claims including the Tughans Fee, subject to other terms and conditions of the policy.
  • Insurers are liable for costs incurred by Tughans in defence of proceedings commenced by BR and ERSIC.