Ground Gilbey and another v Jardine Llyod Thompson
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BLAIR,Mr Justice Blair |
| Judgment Date | 02 February 2011 |
| Neutral Citation | [2011] EWHC 124 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2009 FOLIO 1121 |
| Date | 02 February 2011 |
[2011] EWHC 124 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION COMMERCIAL COURT
Before : Mr Justice Blair
Case No: 2009 FOLIO 1121
Mr Ben Elkington (instructed by Edwin Coe LLP) for the Claimants
Mr John Lockey QC (instructed by Eversheds) for the Defendant
Hearing dates: 17, 18, 22, 23, 24, 25, 26, 30 November 2010
Approved Judgment
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 as handed down may be treated as authentic.
Mr Justice Blair:
This is a claim by the owners of Camden Market in north London brought against the defendants, their former insurance brokers. The claim arises out of a major fire which occurred on 9 February 2008 in the part of the market called the Canal Market. This part of the market is owned by the two claimant companies. The cause of the fire was a liquefied petroleum gas (LPG) portable heating appliance which was left on in one of the stalls and which ignited clothing set out for sale in the stall. The fire was detected shortly after the market had closed for the day. In short, the claimants allege that through the negligence of their brokers, they incurred a loss in settling the claim arising from the fire with their insurers, which they did in July 2008. Apart from liability, the issues at trial have centred on causation, as well as on quantum and contributory negligence.
The facts
The evidence at trial
Each side had criticisms of the adequacy of the other's disclosure (which criticisms I refer to below where necessary), though there was nevertheless a considerable body of documentary evidence adduced at trial, including from the insurers' file relating to the policy and subsequent claim. Oral evidence was given by eight witnesses of fact for the claimants, and six witnesses of fact for the defendants. In addition there was expert evidence from the claimants in the form of broking evidence, and evidence as to quantum from the defendants. I shall evaluate the evidence in the context of the contested issues of fact, of which there are a number. It will be most convenient to set out my findings of fact on a chronological basis.
The making of the policy
Camden Market is a longstanding London market which incorporates hundreds of units and stalls which are operated by different traders selling (among other things) clothing. A considerable number of the stalls are in the open air. Part of the market lies to the west of Camden High Street/Chalk Farm Road and is known as "Stables Market", and is or was made up of some 400 stalls. Part of the market lies to the east of that road, and is known as "Canal Market", and is or was made up of some 80 stalls, occupying approximately two acres alongside the Regents Canal.
The defendant broker, Jardine Lloyd Thompson UK Ltd ("JLT") was first instructed in March 2005 at which time the market's insurance cover was with AXA. JLT acted as brokers pursuant to instructions received from the company responsible for the overall management of Camden Market, The Stables Market (Camden) Ltd ("TSMCL"). TSMCL acted as agents for the individual companies interested in the various properties insured. The ultimate parent company of the companies which own the various interests in Camden Market is Camden Market Holdings Corp, which is a BVI registered company. Nothing turns on the corporate structure of the ownership of the market. In this litigation, the defendants emphasise the separate nature of the two markets, while the claimants emphasise that they operated as a whole at least for some purposes including the placing of insurance. Where appropriate, I refer to them together as "the market" for convenience.
The person with primary responsibility for the account on the brokers' side for most of the period relevant to this case was Mr Ted Pearce, a Broking Director at JLT. His principal contact at TSMCL was Mr Charlie Joory, who had experience in the insurance industry in Israel, and who was financial manager for the market. Mr James Lawrence who advised Camden Market on various financial matters was involved on matters relating to financial aspects of the insurance cover, but as he said (and I accept) not on the issue relating to portable gas heaters which was left to Mr Joory and the market managers. The brokers looked at alternative insurers, and arranged for the market to be surveyed by Fusion Insurance. Fusion acted as an underwriting agency for the insurer, Aviva Insurance Ltd trading as Norwich Union. That survey took place on 17 March 2005, and on 23 March 2005 Fusion issued a quotation. On the defendants' recommendation, Fusion's quotation was accepted, and the policy was issued at the end of the month. One of the reasons given for the defendants recommending transfer to Fusion was, "Their approach towards a long term relationship with Camden Market and willingness to work with you".
Fusion's quotation stipulated that one of the matters that needed to be addressed was the removal of portable heating appliances (PHAs) from the market. This is consistent with the evidence at trial to the effect that insurers regard the use of portable heaters of the LPG, paraffin or open bar radiant heating type, that is, those powered by gas cylinders and having a naked flame, as a fire hazard, particularly in an environment such as a market. The position in this respect was helpfully spelled out in the joint memorandum produced for the trial by the broking experts, who concluded that the insurance market would broadly have required removal of unacceptable PHAs on an agreed and qualified basis and subject to a timescale.
It may be noted however that the defendants' report which recommended that the claimants should accept Fusion's quotation identified each of Fusion's requirements except for the requirement to remove PHAs from the market. No plausible explanation was given at trial for the omission of that requirement, and whilst it is of limited significance in itself, it was not a good start to addressing what was to prove to be a difficult issue. I am satisfied from the evidence as a whole that in general terms the problem stemmed from the fact that stall holders and others working in the market needed some means of keeping warm in winter. The operators of the market would not allow electrical heaters primarily because, used on an un-metered basis, it would potentially be costly for the owners. That left limited options, and the evidence showed that prohibitions on portable gas heaters were not fully observed. It seems that the issue arose mainly (the defendants would say only) in the context of the Stables Market. In drawing a distinction for these purposes with the Canal Market, among other things they rely on the fact that the claimants' position on the pleadings (amended at the beginning of the trial) was that all practical steps were taken to ensure that PHAs were removed from the Canal Market. At trial, I heard evidence from the manager of the former, but not the latter. As I shall explain, the problem was compounded by the fact that the identification of safer heaters was raised but not pursued. Leaving aside differences in the position in the individual markets, I am satisfied on the evidence that the problem with PHAs was recognised by those concerned, but was never properly addressed until after the fire.
The Policy was a "Property Owners' Policy" which included material damage cover (Section A) and loss of rent cover (Section B) for a number of separate premises (separately owned), including Canal Market and Stables Market, and some adjacent buildings (particularly relevant for present purposes being numbers 1–9 Chalk Farm Road which were also damaged in the fire). The Policy also provided Employers' Liability and Property Owners' Liability (Section C) and Terrorism cover (Section D). By the time of renewal in 2007, the material damage sum insured exceeded £60 million. As regards Stables Market, the buildings declared value was £7 million and in respect of the Canal Market the declared value was £250,000. When the fire occurred in the Canal Market, it was the fact that it spread to adjacent properties insured under the policy in Chalk Farm Road and Castlehaven Road that caused the scale of the loss in financial terms.
The defendants say (though the claimants do not accept this) that the Policy was a "composite" policy, insuring the various insured entities separately in respect of their interests in the insured premises. The provisions of the Policy which have featured in the arguments of the parties are as follows. Section A (the material damage section) was written on a reinstatement basis, and contained a "non-invalidation clause" (clause 10) in the following terms:
"This insurance shall not be invalidated by any act or omission or by any alteration whereby the risk of Damage is increased unknown to or beyond the control of the Insured provided that the Insured immediately they become aware thereof shall give notice to the Underwriters and pay an additional premium if required."
Clause 2 of the General Policy Conditions included a "reasonable care" clause in conventional terms which provided so far as relevant as follows:
"It is a condition precedent to any liability of the Underwriters to make any payment under this Policy that the Insured shall take all reasonable care
(a) To prevent any occurrence which may give rise to a claim under this Policy
(b) In the selection and supervision of employees."
Clause 15 of the General Policy Conditions included a "subjectivity clause" which gave the Insurer the right in certain circumstances to amend...
To continue reading
Request your trial
-
PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (in liq)
...v Mercantile Mutual Insurance (Australia) Limited [2000] QCA 254; [2002] 1 Qd R 17 Ground Gilbey Ltd v Jardine Lloyd Thompson UK Ltd [2011] EWHC 124 (Comm) Horsell International Pty Ltd v Divetwo Pty Ltd [2014] NSWCA 368; 18 ANZ Insurance Cases ¶61-991 Hunt & Hunt Lawyers v Mitchell Morgan ......
-
Dalamd Ltd v Butterworth Spengler Commercial Ltd
...defence for which the broker was responsible was a good one. That is what was decided in FNCB v Barnet Devanney and in Ground Gilbey Ltd v Jardine Lloyd Thompson UK Ltd [2011] PNLR 134 On the other hand, I was shown no authority in which, where there had been no settlement with insurers, a......
-
COVID-19 Toolkit ' Managing Challenges Arising Out Of COVID-19 For Insurance Brokers
...3. 4 Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368, [236] citing Ground Gilbey Ltd v Jardine Lloyd Thompson UK Ltd [2011] EWHC 124 (Comm). 5 PC Case Gear Pty Ltd v Instar Insurance Brokers Pty Ltd (in liq) [2020] FCA 137. 6 PC Case Gear Pty Ltd v Instar Insurance Brokers ......
-
Broker Duties
...of this claim4, and GGL were entitled to recover the shortfall from their brokers, JLT. Result: Judgment for the insured. Footnotes 1 [2011] EWHC 124 (Comm) 2 HIH Casualty & General Insurance Ltd v. JLT Risk Solutions Ltd [2007] EWHCA Civ 710 3 Jackson & Powell on Professional Liabi......
-
Broker Duties - Failure To Advise Insureds On Risk Improvement Requirements
...of this claim4, and GGL were entitled to recover the shortfall from their brokers, JLT. Result: Judgment for the insured. Footnotes 1 [2011] EWHC 124 (Comm) 2 HIH Casualty & General Insurance Ltd v. JLT Risk Solutions Ltd [2007] EWHCA Civ 710 3 Jackson & Powell on Professional Liabi......
-
Contributory Negligence in the Twenty‐First Century: An Empirical Study of First Instance Decisions
...(QB); (283) Lightfoot vGo-Ahead GroupPlc [2011] EWHC 89 (QB), [2011] RTR 27; (284) Ground Gilbey Ltd vJardineLloyd Thompson UK Ltd [2011] EWHC 124 (Comm), [2012] Lloyd’s RepIR 12; (285) Douglas vO’Neill [2011] EWHC 601 (QB); (286) Maynard vWigan MBC [2011] EWCA Civ 1694; (287) Phethean-Hubb......