Blackburn Rovers Football and Athletic Club Plc and Avon Insurance Plc and Eagle Star Insurance Company Ltd and Agf Insurance Ltd and Ic Insurance Ltd
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr. Justice Moore-Bick,Mr. Justice Moore-Bick |
| Judgment Date | 15 November 2004 |
| Neutral Citation | [2004] EWHC 2625 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 15 November 2004 |
| Docket Number | Case No: 2003 Folio 907 |
[2004] EWHC 2625 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr. Justice Moore-bick
Case No: 2003 Folio 907
Mr. Stephen Cogley (instructed by Laytons) for the claimant
Mr. Jeremy Stuart-Smith Q.C. and Mr. David Turner (instructed by LeBoeuf, Lamb, Greene & MacRae) for the defendants
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version may be treated as authentic.
On 16 th October 1997 a professional footballer, Martin Dahlin, suffered an injury to his back while taking part in a practice match. Although it was not immediately clear that the injury would have long term consequences, it proved to be sufficiently serious to prevent him from competing in top class football and effectively put an end to his professional career.
His club, Blackburn Rovers, ("the Club") had obtained insurance from the defendants against the risks of injury to its players, including Mr. Dahlin, and accordingly made a claim under the policy. That claim was rejected by the insurers on the grounds that his disablement had not been caused by the injury alone but resulted directly or indirectly from a degenerative condition of the lower spine and was therefore not covered by the policy. The Club has therefore brought this action against the insurers seeking the indemnity to which it says it is entitled.
The policy, so far as material, provided as follows
" The insurers hereby agree with the Insured … . . that if an Insured Person shall sustain any Accidental Bodily Injury as herein defined or in the event of his Illness as herein defined, the Insurers will pay to the Insured … . . according to the Schedule of Compensation ……
In this Insurance
1. "ACCIDENTAL BODILY INJURY" means accidental bodily injury which
(a) is sustained by the Insured Person during the period of the insurance,
(b) solely and independently of any other cause, except Illness directly resulting from, or medical or surgical treatment rendered necessary by, such injury, occasions the death or disablement of the Insured Person within twenty four calendar months from the date of the accident.
3. "PERMANENT TOTAL DISABLEMENT means disablement which entirely prevents the Insured Person from engaging in his usual occupation as a football player ……… and which lasts twelve calendar months and at the expiry of that period the Insured Person is beyond hope of improvement.
SCHEDULE OF COMPENSATION
A. Compensation payable in respect of ACCIDENTAL BODILY INJURY
1. ……… .
2. Permanent Total Disablement 100% of Capital Sum Insured
EXCLUSIONS
This insurance does not cover death or disablement directly or indirectly resulting from or consequent upon:-
4. Permanent Total Disablement attributable either directly or indirectly to arthritic or other degenerative conditions in joints, bones, muscles, tendons or ligaments;"
The capital sum insured in relation to Mr. Dahlin was £4 million.
In their defence the insurers alleged that Mr. Dahlin suffered from degenerative disc disease unrelated to any particular incident or to his playing career as a professional footballer and that any injury he sustained on the occasion in question was caused directly or indirectly in whole or in part by that underlying condition. They therefore denied that he had suffered accidental bodily injury within the meaning of the policy and contended that in any event the claim fell within Exclusion 4.
There are issues between the parties about the precise nature of Mr. Dahlin's injury, the extent to which he suffered from pre-existing disc degeneration and the extent, if at all, to which any such degeneration contributed to his injury. However, in paragraphs 3 and 6 of its reply the Club pleaded that Exclusion 4 is not apt on its own terms to cover the present situation and that even if it is, the reference to arthritic or other degenerative conditions is not to be construed as including degenerative changes that are present in the large majority of the population of Mr. Dahlin's age, including professional footballers, and are largely a function of age. In other words, the exclusion is not to be construed as referring to the degree of degeneration that is no worse than is normally found in this class of person.
At the case management conference Colman J. directed that the following be tried as preliminary issues:
(1) Whether the matters pleaded in paragraphs 3 and 6 of the Reply preclude the Defences raised in paragraphs 5.3, 7.3 and 7.4 of the Defence;
(2) Whether it is a permissible and necessary aid to construction of the Policy to have regard to the incidence of degenerative disc disease in the population at large.
However, in order to understand better the real nature of the issues which have to be decided, I think it may be more helpful to re-formulate them as follows, adopting, where appropriate, the language used in the Club's reply:
(1) whether Exclusion 4 is incapable of bearing any rational meaning;
(2) whether Exclusion 4 is to be construed literally, in favour of the insured;
(3) whether degenerative changes that are (a) typical of the male population of Mr. Dahlin's age in general and (b) typical of top-class professional footballers of Mr. Dahlin's age are to be disregarded for the purposes of the policy.
The Club admits that Mr. Dahlin suffered from degenerative disc disease of the lower spine prior to the accident. Apart from that, the facts are in issue and although I have been provided with copies of some of the medical reports that have been produced in this case, it is not possible to make any further findings at this stage. The preliminary issues must therefore be determined on the basis of a number of assumptions. These are:
(1) that a large proportion of the male population of Mr. Dahlin's age (it was agreed for the purposes of the present trial that it should be taken to be as high as 75%) suffers from degenerative disease of the lower spine related to ageing;
(2) that top-class professional footballers typically exhibit more serious degeneration that ordinarily active people;
(3) that the nature and degree of the degeneration suffered by Mr. Dahlin was no worse than normal for a top-class professional footballer of his age; and
(4) that the degeneration was a cause, direct or indirect, of the injury he received on 16 th October 1997.
Exclusion 4
It is convenient to begin with the construction of Exclusion 4. Although in paragraph 3(i) of the Reply it is alleged that Exclusion 4 is not capable of being given any rational meaning, this point did not feature prominently in Mr. Cogley's submissions. In the pleading itself it appears as a prelude to the proposition that paragraph 4 does not stand alone but must be read in conjunction with the opening words of the clause. In my view that is clearly correct, but it gives rise to other difficulties of construction to which the first limb of the argument was directed.
Mr. Cogley submitted that the language of Exclusion 4 as a whole is perfectly clear. The introductory words are designed to be read in conjunction with the numbered paragraphs, each of which describes an activity or event that may give rise to death or disablement. Accordingly, paragraph 4 excludes liability for death or disablement resulting from or consequent upon Permanent Total Disablement as defined elsewhere in the policy. It is not permissible, he submitted, to ignore the introductory words or to manipulate the clause in order to give it any other meaning. If, however, it is capable of bearing some other meaning, the court should choose that which is more favourable to the insured. In this case that would mean construing Exclusion 4 as applicable only to those cases (no doubt very few in number) in which death or disablement had resulted from Permanent Total Disablement. Mr. Stuart-Smith Q.C., on the other hand, submitted that I should take a broader approach altogether to the construction of this provision, which he argued, was clearly intended to exclude liability for Permanent Total Disability in cases where an arthritic or degenerative condition had played any part in causing a player's disablement.
The established approach to construing contracts of insurance was conveniently summarised by Stuart-Smith L.J. in Yorkshire Water Services Ltd v Sun Alliance & London Insurance Plc [1997] 2 Lloyd's Rep. 21 at page 28 as follows:
" 1. The words of the policy must be given their ordinary meaning and reflect the intention of the parties and the commercial sense of the agreement. Thus they must be construed in their context or, as Lord Mustill put it in Charter Reinsurance Co. Ltd v Fagan and Others [1996] 2 Lloyd's Rep. 113 at p. 117, col. 1; [1996] 3 All E.R. 46 at p. 51e: "the words must be set in the landscape of the instrument as a whole."
2. A literal construction that leads to an absurd result or one otherwise manifestly contrary to the real intention of the parties should be rejected, if an alternative more reasonable construction can be adopted without doing violence to the language used.
3. In the case of ambiguity the construction which is more favourable to the insured should be adopted; this is the contra proferentem rule."
A recognition of the need to give a policy a sensible meaning consistent with its fundamental purpose has led the courts on various occasions to overlook obvious grammatical errors, even, if necessary, to disregard inappropriate phrases as surplusage: see MacGillivray on Insurance Law, 10 th ed.,...
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