Ashmore and Others v Corporation of Lloyd's (No 2)
| Jurisdiction | England & Wales |
| Judgment Date | 02 July 1992 |
| Date | 02 July 1992 |
| Court | Queen's Bench Division (Commercial Court) |
Commercial Court of the Queen's Bench Division
Before Mr Justice Gatehouse
Insurance - Lloyd's names - no duty to alert
The Corporation of Lloyd's was under no duty either to take steps to alert their so-called names about matters of which Lloyd's became aware which might seriously affect their interests or to impose a premium income monitoring system. Additionally, Lloyd's had immunity from suit under section 14 of the Lloyd's Act 1982 from July 23, 1982 when it came into force.
Mr Justice Gatehouse so held in a reserved judgment in the Commercial Court of the Queen's Bench Division in dismissing a claim for breach of contract and/or breach of statutory duty brought by Patricia Ashmore and 32 other Lloyd's names who had lost more than £5 million.
Mr Michael Lyndon-Stanford, QC and Mr Paul Griffin for the plaintiffs; Mr Peregrine Simon, QC, Mr Paul Walker and Mr Matthew Reeve for Lloyd's.
MR JUSTICE GATEHOUSE said that the relationship between the parties and the nature of the plaintiffs' claim against Lloyd's were summarised in the speech of Lord Templeman when the case was before the House of Lords on an interlocutory appeal (The Times April 3; [1992] 1 WLR 446, 449B-E, 450F-451B).
The preliminary questions of law to be determined were: (a) duty of care; whether, on the basis of the primary facts alleged the defendant owed to the plaintiffs any, and if so which duties; (b) immunity; if Lloyd's did owe a duty of care then was it immune from suit in respect thereof by virtue of section 14 of the Lloyd's Act 1982 and, if so, from what date?
The plaintiffs based their claim on an implied contractual duty of care and a statutory duty arising out of section 10 of Lloyd's Act 1871, as amended by section 4 of Lloyd's Act 1911.
There were three bases on which a term could be implied into a contract.
The first two, "implications in fact" depended on the presumed joint intention of the parties and arose either under (i) the doctrine of The MoorcockELR ((1889) 14 PD 64), the business efficacy test, or (ii) the officious bystander test based on Shirlaw v Southern FoundriesELR ([1939] 2 KB 206, 227).
The third basis on which a term could be implied was an "implication in law" and did not depend on the presumed joint interests of the parties but on a principle derived, as the plaintiffs said, from Liverpool City Council v IrwinELR ([1977] AC 239).
The plaintiffs' contended for...
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