responsible for personal injuries – employers and motorists – are required to be
insured against liability, and that liability cover for other for ms of loss is actually
in place where insurance is not compulsory. Nor should the courts be concerned
that many claimants have ﬁrst party insurance cover ing their own losses.
The argument runs that if insurability or actual insurance are taken into
account in decisions, they cease to be based on pr inciple and instead focus on
distributive justice, and such decisions – insofar as they relate to notions of
insurability – are likely to be misguided because the courts have no way of
knowing what risks are and are not insurable. It is thus necessary to focus on
principle. Professor Stapleton points out that the imposition of liability may be
tempered by issues of indeterminacy, but that references to insurability are simply
a surrogate for concerns affecting indeterminacy and should be disregarded.
In its place this analysis is unexceptional and indeed powerful.The present
author nevertheless asserts that it underplays the role of insurance in the law of
obligations.The concern here is not with the undoubted effect of insurance on
claims. It is indisputable that:4(at least for the moment5) litigation funding (Before
the Event and After the Event) insurance determines which claims are brought;
proceedings against a defendant who is uninsured and otherwise not good for
the money are pointless;6a claim will insofar as is possible be framed so that it
matches policy coverage;7and if there is insurance then the amount of that
insurance will more often than not dictate the terms of any settlement.8The
question, rather, is whether the scope of liability is,and should be,affected by the
presence or absence of insurance covering the loss. The matter is these days
scarcely discussed in modern UK texts,9and where it is the disregard of insurance
is a given.10 However, it is submitted that these assumptions need fur ther con-
sideration when they are extended to three further situations:contract claims; tort
claims based on contract; and tort claims where insurance is known to be in place.
4 T.Baker, ‘Liability Insurance asTort Regulation:Six Ways that Liability Insurance Shapes Tort Law
in Action’ (2006) Conn Ins LJ 1.
5 The Legal Aid,Sentencing and Punishment of Offenders Bill 2011, implementing the report of Sir
Rupert Jackson, Review of Civil Litigation Costs: Final Report (The Stationery Ofﬁce, 2009),will in
practice do away with ATE insurance in most cases by preventing ATE premiums from being
recovered by the claimant as costs.
6 Hence the unsuccessful attempt by a defendant in WestLondon Pipeline vTotal UK  EWHC
1729 (Comm);  Lloyd’s Rep IR 688 to secure the liability policy details of a sub-contractor
in order to determine whether he should be joined to the proceedings as co-defendant.
7 However, that will not work if the facts asserted by the claimant demonstrate fraud, even if that
word is carefully omitted from the pleadings in order to prevent the policy coverage from being
negatived: MDIS vSwinbank  Lloyd’s Rep IR 516; Persimmon Homes Ltd vGreat Lakes
8 There is much US authority for the proposition that a liability insurer who refuses to settle with
the third party within policy limits exposes himself to an action by the assured for damages
representing the amount by which the damages ultimately awarded exceeds policy limits. See,
O. Gurses, ‘Extra-Contractual Liability: An Insurance Overhead or a Reinsurance Recovery?’
(2011) JBL 763.
9 See J. Steele,‘Tort, Insurance, and the Resources of Private Law’ in S. Degeling, J. Edelman and
J. Goudkamp, Torts in Commercial Law (Thomas Reuters Australia,2011), who notes that there are
plenty of academic tort lawyers but very few academic insurance lawyers, so that the link between
the two is often overlooked.
10 Eg, R. H. Stevens, Torts and Rights (Oxford: OUP, 2007) 109.
Tort, Insurance and Ideology
© 2012 TheAuthor.The Moder n Law Review© 2012 The Modern Law Review Limited.
302 (2012) 75(3) MLR 301–323