Cheltenham & Gloucester Plc v Sun Alliance & London Insurance Plc [2001] ScotCS 131 (30 May 2001)

Cheltenham & Gloucester Plc v Sun Alliance & London Insurance Plc [2001] ScotCS 131 (30 May 2001)

The decree obtained by the pursuers against the insured (St. Clair) is not conclusive against the insurer (defenders) in the present action under the 1930 Act. The insurer is entitled to challenge both liability and quantum, unless specifically barred by circumstances such as acquiescence or estoppel, which are not...

Source-derived case information.

Citation
[2001] ScotCS 131
Parties
Pursuer: Cheltenham & Gloucester plc; Defender: Sun Alliance and London Insurance plc
Jurisdiction
Scotland
Judgment Date
30 May 2001
Procedural Posture
Reclaiming Motion (appeal) / Interlocutory Appeal Against Lord Ordinary's Interlocutor Allowing Proof on Limited Issues
Outcome
Lord Ordinary's interlocutor recalled; proof before answer allowed on all issues, including quantum.
Legal Topics
Third Parties (rights Against Insurers) Act 1930, Indemnity, Res Judicata, Quantum of Damages, Professional Negligence, Policy Defences
Insurance Law Civil Procedure Contract Law Third Parties (rights Against Insurers) Act 1930 Indemnity Res Judicata Quantum of Damages Professional Negligence +1 more

Source-derived case record

Summary, issues, holding and outcome

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Parties

Cheltenham & Gloucester plc

Pursuer

Sun Alliance and London Insurance plc

Defender

Procedural Posture

Reclaiming Motion (appeal) / Interlocutory Appeal Against Lord Ordinary's Interlocutor Allowing Proof on Limited Issues

Legal Issues

  1. 1 Whether a decree against an insured in unopposed proceedings is conclusive against the insurer in a subsequent action by a third party under the Third Parties (Rights against Insurers) Act 1930
  2. 2 Whether the insurer can challenge the quantum of liability in such circumstances
  3. 3 Whether the insurer is limited to 'policy defences' or can contest the underlying liability and quantum

Ratio Decidendi

The decree obtained by the pursuers against the insured (St. Clair) is not conclusive against the insurer (defenders) in the present action under the 1930 Act. The insurer is entitled to challenge both liability and quantum, unless specifically barred by circumstances such as acquiescence or estoppel, which are not present or averred here. The Lord Ordinary's interlocutor limiting proof to the issue of good faith was incorrect; proof before answer should be allowed on all issues, including quantum.

Court Disposition

Lord Ordinary's interlocutor recalled; proof before answer allowed on all issues, including quantum.

Orders

  • Recall of Lord Ordinary's interlocutor dated 5 October 2000.
  • Allow proof before answer on all outstanding issues, including quantum of the pursuers' claim.