Yorkshire Water v Sun Alliance & London Insurance Ltd
| Jurisdiction | England & Wales |
| Judge | Stuart-Smith,Waite,Otton L JJ |
| Judgment Date | 19 July 1996 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 July 1996 |
Court of Appeal
Before Lord Justice Stuart-Smith, Lord Justice Waite and Lord Justice Otton
Insurance - measures to avoid or mitigate loss - cost not recoverable
An insured under a public liability policy could not recover the cost of measures taken in order to avoid or mitigate a loss which the insurers would or might have to meet.
The Court of Appeal so stated in a reserved judgment in dismissing an appeal brought by the plaintiff, Yorkshire Water Services Ltd against the decision of Judge Humphrey Lloyd, QC, sitting as Official Referee on February 5, 1996 when he determined certain preliminary issues in favour of the defendants, Sun Alliance and London Insurance plc, Prudential Assurance Company Ltd, Sun Alliance and London Insurance plc (formerly Sun Alliance Insurance International Ltd) Christopher Mark Swinbank, Colonia Insurance Company (UK) Ltd, Baltica Insurance Company (UK) Ltd, Provincial Insurance plc, Hallmark Insurance Company Ltd, Chiyoda Fire and Marine Insurance Company (Europe) Ltd, GRE (UK) Ltd, Commercial Union Assurance Company pLc and Royal Insurance (UK) Ltd.
Mr Robert Griffiths, QC and Mr James Ramsden for the plaintiff; Mr William Crowther, QC and Mr Graham Eklund for the defendants.
LORD JUSTICE STUART-SMITH said that the plaintiff was a wholly owned subsidiary of Yorkshire Water plc and the sewerage undertaker for Yorkshire under the Water Industry Act 1991. On February 12, 1992 an embankment of the Deighton Tip failed and a vast quantity of sewage sludge was deposited in the River Colne and into the Deighton works.
According to the plaintiff's pleaded case, the nearby operations of ICI were affected. ICI started proceedings claiming that its property and business had been damaged. Other such claims were also made or expected.
The plaintiff carried out on its own property urgent flood alleviation works costing £4,601,061 in order to avert further damage to the property of others and to prevent or reduce the possibility of similar claims.
The plaintiff claimed that it was entitled to recover under insurance policies issued by the defendants to Yorkshire Water plc the amounts for which it might be held liable to ICI and others and also the cost of the remedial works.
The defendants rejected the claims on the grounds of material non-disclosure and for other reasons and because they...
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