Axa Insurance Ltd v Akther and Darby Solicitors and Others

JurisdictionEngland & Wales
Judgment Date12 November 2009
Neutral Citation[2009] EWCA Civ 1166
Date12 November 2009
CourtCourt of Appeal (Civil Division)

Court of Appeal

Before Lady Justice Arden, Lord Justice Longmore and Lord Justice Lloyd

Axa Insurance Ltd
Akhter & Darby and Others
When insurer's cause of action accrues against solicitors

An insurer's cause of action for negligent advice by insured solicitors accrued when afterthe-event insurance cover, creating contingent liability, had been issued to defendant solicitors to protect costs and expenses of litigants to bring actions and not when the litigants' claims failed thereby c ausing financial loss to the insurer.

The Court of Appeal so stated by a majority, Lord Justice Lloyd dissenting, when dismissing an appeal by the claimant, Axa Insurance Ltd, formerly known as Winterthur Swiss Insurance Co, from a decision of Mr Justice Flaux ([2009] PNLR 25) on a preliminary limitation issue in Axa's neglige nce claim against the defendants, Akhter & Darby, Walsall, and about eighty other firms of solicitors. Axa had issued insurance cover for claims by the solicitors' clients on a no-win-no-fee basis in reliance upon the solicitors' assessments of the merit of the claims.

Mr Charles Hollander, QC, Mr Tim Lord, QC and Mr Colin West for Axa; Ms Sue Carr, QC, Mr Philip Jones, QC, Mr Ben Hubble, QC, Ms Helen Evans and Ms Ruth Holtham for the solicitors.

LADY JUSTICE ARDEN said that it was clear from Law Society v SephtonTLRELR (The Times May 11, 2006; [2006] 2 AC 543) that the incurring of a purely contingent liability which might result in an actual liability at a future point in time did not cause the limitation period to start to run.

However, that was not the case where in addition to incurring a contingent liability the claimant suffered damage to a particular asset of his, for example, because he also executed security over his property, as in Forster v Outred & CoWLR ([1982] 1 WLR 86).

The principle that the incurring of a purely contingent liability was not itself damage did not apply where the claimant acquired a contingent liability as a part of a package of rights under a bilateral transaction and the value of that package had been diminished by...

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32 cases
  • British Telecommunications Plc v Michelle Luck and Others
    • United Kingdom
    • Queen's Bench Division
    • 17 February 2014
    ...Sedgwick Financial Services [2008] PNLR 874, Pegasus Management Holdings v Ernst & Young [2009] PNLR 209 and [2010] PNLR 438 and Axa Insurance v Akther & Darby [2009] PNLR 455 and [2010] 1 WLR 1662. 15 However, none of the authorities concerns facts similar to those of the present case. Th......
  • Cantrell v Allied Irish Banks Plc
    • Ireland
    • Court of Appeal (Ireland)
    • 18 July 2019 the time of the loan transactions when the LTV covenants were agreed. As Longmore L.J. said in Axa Insurance Ltd v. Akther & Darby [2009] EWCA Civ 1166, [2010] 1 WLR 1662, at para. 82: ‘[I]t is true that the investors were not immediately worse off as a result of entering into the inve......
  • Cantrell v AIB Plc
    • Ireland
    • High Court
    • 28 April 2017
    ...suffered immediate loss. Counsel for AIB relied on the UK Court of Appeal decision in AXA Insurance Ltd v Akther & Darby and others [2010] 1 W.L.R. 1662 where a majority held at a preliminary hearing that damage would not be constituted by the incurring of purely contingent liability, and t......
  • Gallagher v Acc Bank Plc T/A Acc Bank
    • Ireland
    • Supreme Court
    • 7 June 2012
    ...Plaintiff and ACC Bank plc, trading as ACC Bank Defendant Cases mentioned in this report:- Axa Insurance Ltd. v. Akther & Darby [2009] EWCA Civ 1166, [2010] 1 W.L.R. 1662; [2010] P.N.L.R. 10; [2010] Lloyd's Rep. I.R. 393; [2010] 127 Con. L.R. 50. Bell v. Peter Browne & Co. [1990] 2 Q.B. 495......
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3 firm's commentaries
  • Solicitors' PI and ATE Insurance: A Cautionary Tale
    • United Kingdom
    • Mondaq United Kingdom
    • 13 December 2010 upon the solicitors. This type of case contrasts with others, such as the TAG litigation and Axa Insurance v Akther & Darby [2009] EWCA Civ 1166, where defendant firms of solicitors were appointed by ATE insurers to advise specifically on the merits and prospects of success of clai......
  • Update On Limitation In Professional Negligence Claims
    • United Kingdom
    • Mondaq United Kingdom
    • 25 November 2009 run a real risk of being time-barred. Further reading: Axa Insurance Limited -v- Akther & Darby Solicitors & Others [2009] EWCA Civ 1166 This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to Law-Now ......
  • HFW Insurance & Reinsurance Bulletin - December 2009
    • United Kingdom
    • Mondaq United Kingdom
    • 15 December 2009
    ...cases. Limitation: Contingent Liabilities By Alison Zobel and Eleanor Midwinter Axa Insurance Ltd v Akther & Darby Solicitors [2009] EWCA Civ 1166 The Claimant, Axa, appealed against the Court's ruling that certain claims against the Defendant, Akther, were time barred. The question on ......

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