{"id":197,"date":"2020-12-07T00:00:00","date_gmt":"2020-12-07T00:00:00","guid":{"rendered":"https:\/\/fenchurchlaw.hostingsystems.co.uk\/uk\/blog\/2020\/12\/07\/court-declines-to-re-write-existing-el-insurance-law\/"},"modified":"2024-08-21T16:26:06","modified_gmt":"2024-08-21T15:26:06","slug":"court-declines-to-re-write-existing-el-insurance-law","status":"publish","type":"post","link":"https:\/\/fenchurchlaw.com\/en-uk\/court-declines-to-re-write-existing-el-insurance-law\/","title":{"rendered":"Court declines to re-write existing EL insurance law"},"content":{"rendered":"

Komives v Hick Lane Bedding Ltd & Anor<\/u>\u00a0<\/strong>[2020] EWHC 3288 (QB)<\/p>\n

This recent High Court decision was on any view a sad case, although the Court appears to have been mindful of the adage that\u00a0\u201chard cases make bad law\u201d.<\/em><\/p>\n

The Claimants were two Hungarian nationals, who had been trafficked to the UK and who then worked for the First Defendant, Hick Lane Bedding Limited (\u201cthe Company\u201d), in conditions of modern slavery.\u00a0Both Claimants suffered psychiatric injuries, and one of them had also suffered a severe accident at work.<\/p>\n

The Company went into administration in 2015; and its managing director was sentenced to prison for conspiracy to traffic individuals into the UK with intent to exploit them.<\/p>\n

The Company\u2019s employers\u2019 liability insurer at the relevant time was the Second Defendant, AmTrust Europe Limited (\u201cAmTrust\u201d).\u00a0AmTrust had written the Company’s EL policy based, it appears, on relatively limited information, but it had been provided with a glowing survey as to the Company\u2019s working practices.<\/p>\n

The Claimants issued proceedings for their injuries against both the Company and AmTrust.\u00a0 AmTrust responded by avoiding the policy – a fairly predictable stance, one might have thought, in light of the Company\u2019s clear non-disclosure of its criminal conduct.<\/p>\n

The Claimants\u2019 Counsel, instructed by the Anti-Trafficking and Exploitation Unit, nevertheless sought to challenge AmTrust\u2019s avoidance, on various grounds:<\/p>\n

    \n
  1. The Claimants argued that, by writing the policy based on relatively scant information, AmTrust had turned a blind eye to the possibility of the Company\u2019s criminal conduct, or alternatively was not allowed to take this point against the victims of that conduct.<\/li>\n
  2. The legislative scheme, represented by the\u00a0Employers\u2019 Liability (Compulsory Insurance) Act<\/u>\u00a01969 and the similarly entitled\u00a01998 Regulations<\/u>, which restrict which conditions\/warranties can be contained in an EL policy, were intended to protect employees like the Claimants and to ensure that insurance was available. Coupled with Rule 8.1.1 of ICOBS, which states that an insurer must\u00a0\u201cnot unreasonably reject a claim (including by terminating or avoiding a policy)\u201d,\u00a0<\/em>it followed, submitted the Claimants, that AmTrust\u2019s avoidance was unreasonable.<\/li>\n
  3. The Claimants\u2019 underwriting expert, Mr Flaxman, accepted that, had its involvement with modern slavery been known, the Company would have been\u00a0\u201cuninsurable\u201d<\/em>\u00a0and that, in the scale of non-disclosures or misrepresentations, the Company\u2019s non-disclosure\u00a0\u201ccouldn\u2019t get much worse\u201d.\u00a0<\/em>He nevertheless gave evidence that, as a matter of\u00a0\u201cmarket practice\u201d<\/em>, AmTrust should have paid the claims.<\/li>\n<\/ol>\n

    The Court rejected these submissions.\u00a0While understandably sympathetic to the Claimants\u2019 position, the Court predictably recognised that the scheme to mandate insurance for employees was nothing like that afforded to the victims of road accidents, where the\u00a0Road Traffic Act<\/u>\u00a01988 severely restricts an insurer\u2019s ability to avoid a motor policy for breach of the duty of fair presentation. The Court concluded that the present framework of EL insurance may well produce very unsatisfactory results, but that it was for Parliament, and not the courts, to put that right.<\/p>\n

    The full judgment is here:\u00a0https:\/\/www.bailii.org\/ew\/cases\/EWHC\/QB\/2020\/3288.html<\/a><\/p>\n

    Jonathan Corman<\/a> is a partner at Fenchurch Law<\/p>\n","protected":false},"excerpt":{"rendered":"

    Komives v Hick Lane Bedding Ltd & Anor\u00a0[2020] EWHC 3288 (QB) This recent High Court decision was on any view […]<\/p>\n","protected":false},"author":68,"featured_media":198,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[12],"tags":[271],"class_list":["post-197","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-case-law","tag-professional-risks"],"acf":[],"yoast_head":"\nCourt declines to re-write existing EL insurance law - Fenchurch Law UK<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fenchurchlaw.com\/en-uk\/court-declines-to-re-write-existing-el-insurance-law\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Court declines to re-write existing EL insurance law - 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