Aitken v Independent Insurance Co Ltd [2001] ScotCS 4 (9 January 2001)

Aitken v Independent Insurance Co Ltd [2001] ScotCS 4 (9 January 2001)

On a sound construction of the policy, the excess clause in Section 1 (Employers' Liability) was a type 2 excess, meaning the insurer was obliged to indemnify the employer (and thus the pursuer as statutory assignee) in full, but could seek reimbursement of the excess from the employer. The statutory scheme for compulsory employers' liability insurance did not permit a type 1 excess clause, and even if the policy had contained such a clause, General Policy Condition 6) would have operated to require the insurer to pay the employee and seek recovery from the employer. The pursuer was therefore entitled to payment from the defenders of the sums awarded in his favour against MCL.

Citation
[2001] ScotCS 4
Parties
Pursuer: Joseph Aitken; Defenders: Independent Insurance Company Limited
Jurisdiction
Scotland
Judgment Date
09 January 2001
Procedural Posture
Civil Action for Declarator and Payment Under Insurance Policy / Outer House, Court of Session, Opinion After Debate on Relevancy and Construction
Outcome
For the pursuer; case put out By Order for discussion of the appropriate form of decree.
Legal Topics
Employers' Liability Insurance, Excess Clauses, Third Parties (rights Against Insurers) Act 1930, Interpretation of Statutory Insurance Requirements
Insurance Law Employment Law Statutory Interpretation Employers' Liability Insurance Excess Clauses Third Parties (rights Against Insurers) Act 1930 Interpretation of Statutory Insurance Requirements

Case Brief

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Parties

Joseph Aitken

Pursuer

Independent Insurance Company Limited

Defenders

Procedural Posture

Civil Action for Declarator and Payment Under Insurance Policy / Outer House, Court of Session, Opinion After Debate on Relevancy and Construction

Legal Issues

  1. 1 Whether the insurance policy contained an excess clause affecting the pursuer's claim
  2. 2 Whether a type 1 excess clause (excluding indemnity for the excess) is permissible under the statutory scheme for compulsory employers' liability insurance
  3. 3 Proper construction of the excess clause in the policy

Ratio Decidendi

On a sound construction of the policy, the excess clause in Section 1 (Employers' Liability) was a type 2 excess, meaning the insurer was obliged to indemnify the employer (and thus the pursuer as statutory assignee) in full, but could seek reimbursement of the excess from the employer. The statutory scheme for compulsory employers' liability insurance did not permit a type 1 excess clause, and even if the policy had contained such a clause, General Policy Condition 6) would have operated to require the insurer to pay the employee and seek recovery from the employer. The pursuer was therefore entitled to payment from the defenders of the sums awarded in his favour against MCL.

Court Disposition

For the pursuer; case put out By Order for discussion of the appropriate form of decree.

Orders

  • Case to be put out By Order for discussion of the appropriate form of decree; no substantive interlocutor pronounced at this stage.