James Reckitt appears in Court of Appeal in landmark insurance case.
April 8, 2024
Acting for the appellants, James Reckitt on instructions from BDB Pitmans LLP and Ali Reza Sinai led by David Bailey KC in the conjoined appeals of Alam/Hacking/Siddique v HDI Global Specialty SE, with the Financial Services Compensation Scheme intervening. The appeals were heard by the Court of Appeal (Sir Julian Flaux, Lewison LJ and Andrews LJ) on 25th-26th March 2024.
The appeal concerned the limitation position in respect of claims brought directly against insurers pursuant to section 2 of the Third Parties (Rights Against Insurers) Act 2010, and specifically whether such a claim is time-barred if (i) it was within time at the point that a winding up order is made in respect of the insured company, and (ii) further time had passed between the winding up order and the claim form being issued, such as to render it time-barred on conventional principles.
The appellants’ position was that the longstanding and established principle in Re General Rolling Stock Co (1872) 7 Ch App 646 applied in respect of direct claims under section 2 of the Third Parties (Rights Against Insurers) Act 2010. The effect of that principle is to freeze the limitation clock upon a winding up order being made, such that if a claim is in time at the point at which the winding up order is made, then the further passage of time thereafter does not give rise to a limitation defence.
The appellants relied on the Court of Appeal’s earlier decision in FSCS v Larnell (Insurances) Limited [2006] QB 808 where it was held that the ‘Rolling Stock’ principle applied to a claim against an insured company in liquidation which was being brought to establish liability against the insured company as a precursor to a claim against the insurer pursuant to rights transferred by the (now-repealed) Third Parties (Rights Against Insurers) Act 1930. That claim was described as a “mixed claim” as it served a dual purpose of targeting assets in the liquidation as well as the proceeds of an insurance policy, leading Moore-Bick LJ to comment that he found it “…impossible to accept that the same claim can be time-barred for one purpose but not for another”.
The respondent’s position was that the ‘Rolling Stock’ principle did not apply to claims brought pursuant to the Third Parties (Rights Against Insurers) Act 2010 as the ‘Rolling Stock’ principle was confined in its application to claims within the liquidation, and that Larnell should be distinguished as the 1930 Act operates differently to the 2010 Act. It was also argued that Larnell was wrongly decided.
A settlement was reached on the second day of the appeal, and the Court of Appeal declined FSCS’s invitation to give a judgment as the settlement had been reached before the case had been fully argued.
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