A summary of recent developments in insurance, reinsurance and litigation law.
Haven Insurance Co Ltd v EUI Ltd: Court of Appeal allows extension of time to commence arbitration proceedings
The appellant and respondent are both motor insurers and members of the Motor Insurers Bureau ("MIB"). Following a dispute about liability to indemnify a road traffic accident victim, a meeting took place in February 2015 at which MIB's Technical Committee determined that the respondent was liable.
MIB's Articles provide that a member can appeal a decision of the Technical Committee to an arbitrator, if the member gives written notice of appeal within 30 days of "being notified of the decision of the Technical Committee". The respondent gave written notice more than 30 days after the February meeting and a subsequent email from MIB's secretariat confirming the decision at the meeting.
However, the respondent successfully argued before the arbitrator that it was settled practice by MIB that time for an appeal only started to run from the date the minutes of the meeting were circulated (and the respondent had given notice within that timeframe). The appellant appealed to the court and at first instance Knowles J accepted that the appeal had been out of time but gave permission under section 12 of the Arbitration Act 1996 to extend time to start the arbitration. The appellant's appeal from that decision has now been rejected by the Court of Appeal.
Section 12)(3) of the Act provides that the court can only extend time to start arbitration if:
- The circumstances are such as were outside the reasonable contemplation of the parties when they agreed the provision in question, and that it would be just to extend the time, or
- The conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question.
The Court of Appeal held that the "slight gloss" applied by Waller LJ in , designed to avoid absurdity where, for example, a party which had failed to read the relevant provision could be entitled to a time extension, was unnecessary because of the second limb of section 12(3).
Knowles J had made 3 key findings of fact:
- The respondent believed "reasonably if wrongly" that it had 30 days from receipt of the minutes to appeal
- That belief was in line with a "widely accepted interpretation" shared by MIB
- MIB had confirmed it was its custom and practice to allow 30 days from the minutes to appeal
The Court of Appeal held that the judge had therefore been right to place himself in the shoes of the parties at the time they agreed MIB's Articles and ask what their mutual contemplation would have been. He held they would not have contemplated that "the time for appeal would be other than that which MIB was, when asked, prepared to state" and they would not have insisted on the strict terms of the Articles. Furthermore, the respondent had been entitled to await the final minutes before appealing because it then had the "clearest possible idea of the reasons for the decision under challenge".
The ECU Group v HSBC: Court grants retrospective permission to use disclosed documents
CPR r31.22 provides that a party to whom a document has been disclosed in the course of proceedings may use the document only for those proceedings (except where the document has been read in court, the court has given permission or the disclosing party agrees). This is known as the "collateral use" protection. One of the issues in this case was whether the party to whom disclosure had been made (the applicant) should be given retrospective permission for using those documents in communications with US lawyers. Those US lawyers were instructed to advise on the availability of claims in the US.
It has previously been confirmed in Tchenguiz v Grant Thornton (see Weekly Update 07/17) that if the purpose of a review of disclosed documents was to advise on whether other proceedings would be possible, then the review would be a use for a collateral purpose. In this case, Baker J held that "there is a subtlety created by the fact that CPR 31.22(1) operates by reference to the purpose for which there is to be or has been use. That means it is possible, at least in the current, specific, context of an English litigant taking advice, via its English solicitors in the litigation, from (other) external advisers, for the obtaining of the advice and the advice obtained to involve a breach of the collateral use rule, because of [the applicant]'s purpose, though the self-same advice, upon materially the same brief to the external adviser, could have been sought legitimately, without breach (i.e. without needing permission), for the purpose of the proceedings here".
Accordingly, there would have been no collateral use if the advice of the US attorneys was sought for the purpose of deciding what claims to bring in the proceedings to be brought here. The applicant claimed that it had no present intention of bringing proceedings in the US. The judge was prepared to give retrospective permission, on the basis that the applicant's lawyer would reconfirm by affidavit the applicant's present intentions in relation to proceedings in the US and the US attorneys' retainers would be terminated.
COMMENT: This case reconfirms the importance of ascertaining the purpose of instructing foreign lawyers to advise on the availability of claims in their country, based on information disclosed in the English proceedings. If the purpose is to then bring proceedings in the foreign jurisdiction, that will be a collateral use. If it is instead to confirm that proceedings should continue only in England, that will not be a collateral use. However, it is arguable that in certain cases the real purpose may become clear only after the foreign lawyer's advice has been received.
Wallett v Vickers: Court considers issues of ex turpi causa and joint criminal enterprise
The claimant and defendant (who did not know each other) were driving along a dual carriageway when they began to race, at speeds approaching twice the speed limit, to be the first to reach the point where the road narrowed to a single lane. Neither gave way and the claimant lost control of the car and was killed (the claim was brought by his partner under the Fatal Accidents Act 1976). The defendant was convicted of dangerous driving but argued that the claim was defeated by the doctrine of ex turpi causa (broadly, the principle that no action can arise from the claimant's own illegal act). The defendant specifically argued that the principle was engaged because the parties were engaged in the criminal joint enterprise of dangerous driving on a public road. At first instance, the recorder held that the claim failed and the claimant appealed. (The defendant then sought to add a further argument that the ex turpi causa principle was engaged by the claimant's own dangerous driving, but Males J held that it would be wrong to hear that new case for the first time on this appeal).
Males J has now allowed the appeal. He held that McCracken v Smith (see Weekly Update 15/15) is binding authority "that in the absence of a criminal joint enterprise between the claimant and the defendant, dangerous driving by the claimant will not bar a claim pursuant to the ex turpi causa principle". Furthermore, liability as a party to a joint enterprise requires proof of both a conduct element (ie the defendant encouraged or assisted the commission of the offence by the other defendant) and a mental element (ie that defendant intended to assist or encourage the commission of the crime).
The recorder had not made an express finding that the mental element had been proved. Males J said that here "Rather than working together or encouraging each other to achieve a shared objective, each man was seeking to achieve his own objective which would necessarily mean frustrating the other. Far from wishing the other to drive dangerously, it seems highly probable that each would have preferred that the other should slow down and give way". Accordingly, there was no criminal joint enterprise and the appeal was allowed.