HF secures summary judgment for insurers in £2m property damage indemnity dispute.

In the summer of 2017, the insurer issued a commercial combined policy to the claimant via delegated authority underwriters, and agreed with the claimant’s broker that one of the buildings on the site would be insured on a “debris removal only” basis. In December 2017 that building was damaged by fire. The insurers settled the claim for debris removal costs.

Some years later, in December 2023, the claimant’s solicitors attended the High Court registry with a Claim Form which incorrectly named the delegated authority underwriters as the defendant. Furthermore, the claimant’s solicitors seemingly did not provide the Court with the correct fee, and the Claim Form was not issued at that time.

In April 2024 the claimant’s solicitor made manuscript amendments, crossing through the delegated authority underwriters and naming the insurers as defendants. The Claim Form was issued and then purportedly served with Particulars of Claim. It was the claimant’s position that it should be entitled to full reinstatement, rather than debris removal, with a claim made in excess of £2m.

The insurers applied for summary judgment on the basis that the claim was time barred as it had been issued more than six years after the date of the initial event. At a High Court hearing in October 2024, the Judge granted summary judgment in the insurers’ favour.

 

The two key points decided were as follows:
  • The claimant argued that claims conditions in the policy which required the policyholder to take certain steps, such as furnishing particulars of loss, served to postpone the running of the limitation period on the basis that the policyholder had no right to sue the insurers until those requirements had been complied with. The Judge held that the policy in question was a standard indemnity policy, and that as such the claimant’s cause of action accrued – and the limitation clock started to run – on the day of the insured event.
  • The claimant argued that in bringing a Claim Form to Court in December 2023, the claim had been “brought” for the purposes of the Limitation Act 1980 on that day and hence within six years of the loss. The Judge held that the actions of the claimant’s solicitors on that day did not constitute the bringing of the claim for limitation purposes as: (a) the Claim Form brought to Court on that day named a different defendant to the ones actually sued; and (b) that Claim Form had not been accompanied by the requisite Court fee.

 

Tom Davison, Partner and Head of Property Risks & Coverage at HF, acted for the successful insurers. He said, “This case is a reminder to insurers dealing with litigation to ensure their legal advisers have a forensic understanding of all steps within the process. In this case, close analysis of the steps taken by the claimant’s solicitors in issuing the claim allowed us to identify a complete defence. Furthermore, this case demonstrates that in appropriate circumstances an application for summary judgment can bring proceedings swiftly to a close, avoiding the costs of a full trial.”

Property Risks & Coverage