Facts
The appellants were a syndicate of names at Lloyds, [5] (referred to in the judgment as "the names") and had agreed to underwrite certain insurance policies relating to asbestos claims in 1992. A number of very substantial claims were made under those policies which cost the names a great deal of money. Their losses were exacerbated because of a lack of reinsurance cover for those risks. In earlier proceedings the names had brought a claim against the syndicate manager (Outhwaite) alleging negligence in this regard. Outhwaite paid £116 million to settle those claims.
The names had also had "stop loss" insurance of their own with the respondents, the stop loss insurers. The respondents had paid out under the stop loss policies. The stop loss insurers now claimed to be subrogated to the settlement money paid by Outhwaite. It was not disputed that the stop loss insurers had a right of subrogation, but the dispute related to the amount to which they were subrogated.
In the lead judgment, Lord Templeman used a hypothetical set of figures. He assumed in each case that each of the names had suffered a net underwriting loss for the year of £160,000. He also assumed that they had stop loss insurance for a total of £100,000 subject to an excess of £25,000 (so the name would have to pay out £25,000 of their own money before the stop loss insurance kicked in). So the first £25,000 was met by the name. The "next" £100,000 was met by the stop loss insurers. And the "last" £35,000 was met by the name again (as the insurance cover was exhausted). Lord Templeman also assumed that the hypothetical amount which each name recovered from Outhwaite was £130,000. So the question was: how much of that £130,000 would the stop loss insurers be subrogated to?
A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienee and the person who has the benefit of the lien is referred to as the lienor or lien holder.
In laws of equity, unjust enrichment occurs when one person is enriched at the expense of another in circumstances that the law sees as unjust. Where an individual is unjustly enriched, the law imposes an obligation upon the recipient to make restitution, subject to defences such as change of position. Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient. The concept of unjust enrichment can be traced to Roman law and the maxim that "no one should be benefited at another's expense": nemo locupletari potest aliena iactura or nemo locupletari debet cum aliena iactura.
The law of restitution is the law of gains-based recovery, in which a court orders the defendant to give up their gains to the claimant. It should be contrasted with the law of compensation, the law of loss-based recovery, in which a court orders the defendant to pay the claimant for their loss.
Subrogation is the assumption by a third party of another party's legal right to collect a debt or damages. It is a legal doctrine whereby one person is entitled to enforce the subsisting or revived rights of another for one's own benefit. A right of subrogation typically arises by operation of law, but can also arise by statute or by agreement. Subrogation is an equitable remedy, having first developed in the English Court of Chancery. It is a familiar feature of common law systems. Analogous doctrines exist in civil law jurisdictions.
A constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference. It is a type of implied trust.
Equitable remedies are judicial remedies developed by courts of equity from about the time of Henry VIII to provide more flexible responses to changing social conditions than was possible in precedent-based common law.
Tracing is a legal process, not a remedy, by which a claimant demonstrates what has happened to his/her property, identifies its proceeds and those persons who have handled or received them, and asks the court to award a proprietary remedy in respect of the property, or an asset substituted for the original property or its proceeds. Tracing allows transmission of legal claims from the original assets to either the proceeds of sale of the assets or new substituted assets.
Insurance law is the practice of law surrounding insurance, including insurance policies and claims. It can be broadly broken into three categories - regulation of the business of insurance; regulation of the content of insurance policies, especially with regard to consumer policies; and regulation of claim handling wise.
The Spiliada or Spiliada Maritime Corp v Cansulex Ltd, is a leading decision of the House of Lords on the doctrine of forum non conveniens. It has been described as the "seminal case" on jurisdictional issues.
United Kingdom commercial law is the law which regulates the sale and purchase of goods and services, when doing business in the United Kingdom.
Banque Financiere de la Cite v Parc (Battersea) Ltd [1998] UKHL 7 is an English unjust enrichment case, concerning the framework for a claim.
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a benefit acquired at the expense of another in circumstances which are unjust.
Macaura v Northern Assurance Co Ltd [1925] AC 619 appeared before the House of Lords concerning the principle of lifting the corporate veil. Unusually, the request to do so was in this case made by the corporation's owner.
HIH Casualty and General Insurance Ltd v Chase Manhattan Bank[2003] UKHL 6 is an English contract law case, concerning misrepresentation.
Re Vandervell Trustees Ltd [1974] EWCA Civ 7 is a leading English trusts law case, concerning resulting trusts.
Marshalling is an equitable doctrine applied in the context of lending. It was described by Lord Hoffmann as:
[A] principle for doing equity between two or more creditors, each of whom are owed debts by the same debtor, but one of whom can enforce his claim against more than one security or fund and the other can resort to only one. It gives the latter an equity to require that the first creditor satisfy himself so far as possible out of the security or fund to which the latter has no claim.
Westdeutsche Landesbank Girozentrale v Islington LBC[1996] UKHL 12, [1996] AC 669 is a leading English trusts law case concerning the circumstances under which a resulting trust arises. It held that such a trust must be intended, or must be able to be presumed to have been intended. In the view of the majority of the House of Lords, presumed intention to reflect what is conscionable underlies all resulting and constructive trusts.
Foskett v McKeown[2000] UKHL 29 is a leading case on the English law of trusts, concerning tracing and the availability of proprietary relief following a breach of trust.
Kleinwort Benson Ltd v Birmingham CC [1996] 4 All ER 733 is an English unjust enrichment law case, concerning to what extent enrichment of the defendant must be at the expense of the claimant. It rejected a defence of "passing on" the gain against a claim of unjust enrichment.
Relfo Ltd v Varsani [2014] EWCA Civ 360 is an English unjust enrichment law case, concerning to what extent enrichment of the defendant must be at the expense of the claimant.
This page is based on this
Wikipedia article Text is available under the
CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.
