Markel International Insurance Company Ltd v Surety Guarantee Consultants Ltd & Ors

Markel International Insurance Company Ltd v Surety Guarantee Consultants Ltd & Ors

The defendants, in particular Higgins, Felstead, and Brunswick, conspired to defraud the claimants by writing bonds in excess of agreed limits, misrepresenting exposures, failing to account for premium, and making secret profits. Williams was reckless and dishonest but not a party to the conspiracy. The 'silent co-surety' arrangement was a sham. The claimants did not authorise or ratify the breaches. All four are liable for losses and secret profits arising from unauthorised bonds.

Parties
Claimant: Markel International Insurance Company Limited; Claimant: QBE Insurance (Europe) Limited; Claimant: Amalfi Underwriting Limited; Defendant: Surety Guarantee Consultants Limited; Defendant: Timothy Patrick Thomas Higgins; Defendant: Barry Williams; Defendant: Clifford Edward Felstead; Defendant: Ralph Brunswick; Defendant: General Commercial Limited
Jurisdiction
England and Wales
Judgment Date
03 June 2008
Procedural Posture
Commercial Fraud / Insurance / Civil / Final Judgment After Trial
Outcome
Judgment for the claimants. Defendants found liable for conspiracy, breach of fiduciary duty, procuring breach of contract, and dishonest assistance. Inquiry as to damages and account of secret profits ordered.
Legal Topics
Fraud, Breach of Fiduciary Duty, Conspiracy, Dishonest Assistance, Procuring Breach of Contract, Surety Bonds, Binding Authority, Secret Profits, Tracing, Constructive Trust
Commercial Law Insurance Law Agency Law Tort Law Equity and Trusts Fraud Breach of Fiduciary Duty Conspiracy +7 more

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Parties

Markel International Insurance Company Limited

Claimant

QBE Insurance (Europe) Limited

Claimant

Amalfi Underwriting Limited

Claimant

Surety Guarantee Consultants Limited

Defendant

Timothy Patrick Thomas Higgins

Defendant

Barry Williams

Defendant

Clifford Edward Felstead

Defendant

Ralph Brunswick

Defendant

General Commercial Limited

Defendant

Procedural Posture

Commercial Fraud / Insurance / Civil / Final Judgment After Trial

Legal Issues

  1. 1 Whether the defendants practised a fraud on the claimants in connection with the writing of surety bonds
  2. 2 Whether the defendants breached fiduciary duties, conspired to defraud, dishonestly assisted breaches of trust, or procured breaches of contract
  3. 3 Whether the defendants are liable for secret profits and losses arising from unauthorised bonds

Ratio Decidendi

The defendants, in particular Higgins, Felstead, and Brunswick, conspired to defraud the claimants by writing bonds in excess of agreed limits, misrepresenting exposures, failing to account for premium, and making secret profits. Williams was reckless and dishonest but not a party to the conspiracy. The 'silent co-surety' arrangement was a sham. The claimants did not authorise or ratify the breaches. All four are liable for losses and secret profits arising from unauthorised bonds.

Court Disposition

Judgment for the claimants. Defendants found liable for conspiracy, breach of fiduciary duty, procuring breach of contract, and dishonest assistance. Inquiry as to damages and account of secret profits ordered.

Orders

  • Inquiry as to damages and indemnity for future losses
  • Account and payment of secret profits