Caudle and Others v Sharp ; Grove v Sharp

JurisdictionEngland & Wales
JudgeClarke J.
Judgment Date23 February 1994
CourtQueen's Bench Division (Commercial Court)
Date23 February 1994

Queen's Bench Division

Before Mr Justice Clarke

Caudle and Others
and
Sharp Grove v Sharp

Negligence - insurance - writing reinsurance contracts - continuing failure is one event

Continuing failure was one event

A continuing failure to take proper steps to investigate the risks inherent in writing reinsurance contracts could amount to one event from which the negligent writing of each subsequent contract flowed.

Mr Justice Clarke so held in a reserved judgment in the Queen's Bench Division dismissing the appeals of (i) Mr B F Caudle, Mr D R Neil, St Paul Fire & Marine Insurance (UK) Ltd and Sphere Drake Insurance plc and (ii) of Mr Peter Grove, all reinsurers under reinsurance contracts with the respondent, Mr Alec Sharp, the representative underwriter of the Sharp syndicate at Lloyd's.

The appeals were against the decision of arbitrators on September 1, 1991 that the appellants were liable to the respondent under reinsurance contracts providing for indemnification in respect of liability for losses exceeding prescribed limits for "each and every loss … arising out of one event".

The losses were incurred by the respondent as an errors and omissions insurer of agents involved in the Outhwaite syndicate which suffered enormous losses as a result of 32 reinsurance contracts drafted by Mr Outhwaite.

Mr Julian Flaux for the appellants; Mr Steven Gee, QC, for the respondents.

MR JUSTICE CLARKE said that the appellants had submitted that Mr Outhwaite had been negligent each time he wrote one of the 32 contracts and that the loss so caused did not arise out of one event but out of 32 events.

If that was right the claims would fail because unless the respondent could aggregate the losses in respect of all, or at least some, of the contracts they could not exceed the financial limits in the insuring clause.

In his Lordship's judgment, one of the express purposes of the contract was to provide...

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12 cases
  • Mann and Another v Lexington Insurance Company
    • United Kingdom
    • Queen's Bench Division
    • Invalid date
  • R E Brown v GIO Insurance Ltd
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 6 February 1998
    ...(HL). Baker v JonesWLR [1954] 1 WLR 1005. Balfour Beatty Civil Engineering Ltd v Docklands Light Railway [1996] CLC 1435. Caudle v Sharp [1994] CLC 216; [1995] CLC 642 (CA). Cox v Bankside Members Agency Ltd [1995] CLC 180. Deeny v Gooda Walker Ltd [1994] CLC 1224. Jones v Sherwood Computer......
  • IRB Brasil Resseguros SA v CX Reinsurance Company Ltd
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 7 May 2010
    ... ... they considered, the subject of this Appeal (two others are not appealed), the Arbitrators' erroneous approach in ... 's judgment, namely at 684 Col 2, to the intent that Caudle v Sharp [1995] Lloyd's Rep 433 “suggests … that what ... ...
  • Axa Reinsurance (UK) Plc v Field
    • United Kingdom
    • House of Lords
    • 20 June 1996
    ...in his Lordship's judgment. 8 Meanwhile, there had taken place in February 1994 the decision at first instance in Caudle v. Sharp [1995] L.R.L.R. 80. Various original insurers arranged 32 run-off contracts of reinsurance with syndicates for whom Mr. Outhwaite was the underwriter, and of who......
  • Request a trial to view additional results

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