Eagle Star Insurance Company Ltd. v Cresswell & Ors

Eagle Star Insurance Company Ltd. v Cresswell & Ors

The Claims Co-operation Clause (sub-paragraph (b)) operates as an exclusion of liability for any claim not controlled by reinsurers; compliance is a condition precedent to liability. The 'follow the settlements' clause is qualified by typed provisions requiring reinsurers' consent and control. Reinsurers are not bound to indemnify Eagle Star for settlements not controlled or consented to by them unless waiver, estoppel, or unreasonable conduct is proven.

Parties
Claimant/respondent: Eagle Star Insurance Company Limited; Defendants/appellants: J N Cresswell & Others
Jurisdiction
England and Wales
Judgment Date
14 May 2004
Procedural Posture
Civil Appeal / Appeal From Queen’s Bench Division (commercial Court), Trial of Preliminary Issues
Outcome
Appeal allowed; preliminary issues answered in favour of reinsurers, subject to qualification.
Legal Topics
Reinsurance, Claims Co Operation Clause, Claims Control Clause, Follow the Settlements, Condition Precedent, Policy Interpretation
Insurance Law Contract Law Reinsurance Claims Co Operation Clause Claims Control Clause Follow the Settlements Condition Precedent Policy Interpretation

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Parties

Eagle Star Insurance Company Limited

Claimant/respondent

J N Cresswell & Others

Defendants/appellants

Procedural Posture

Civil Appeal / Appeal From Queen’s Bench Division (commercial Court), Trial of Preliminary Issues

Legal Issues

  1. 1 Whether compliance with sub-paragraph (b) of the Claims Co-operation Clause is a condition precedent to liability under the reinsurance policy
  2. 2 Whether reinsurers are bound to indemnify Eagle Star pursuant to the 'follow the settlements' clause despite breach of sub-paragraph (b)

Ratio Decidendi

The Claims Co-operation Clause (sub-paragraph (b)) operates as an exclusion of liability for any claim not controlled by reinsurers; compliance is a condition precedent to liability. The 'follow the settlements' clause is qualified by typed provisions requiring reinsurers' consent and control. Reinsurers are not bound to indemnify Eagle Star for settlements not controlled or consented to by them unless waiver, estoppel, or unreasonable conduct is proven.

Court Disposition

Appeal allowed; preliminary issues answered in favour of reinsurers, subject to qualification.

Orders

  • Set aside judge’s answers to preliminary issues 3 and 4.
  • Reinsurers not liable to indemnify Eagle Star for settlement not controlled by them unless waiver, estoppel, or unreasonable conduct is established.