Subrogation

Front 1

Subrogation

Back 1

Subrogation
1) Allows the insurer to make sure the insured does not profit
2) Use the insured's name to take action ( may be restricted)

Front 2

Rayner v Preston [1881]

Back 2

It was held that where an owner of real property, who had insured against fire, contracted to sell the property without an assignment of the policy and a fire occurred before the time for performance, the vendee was not entitled to the benefit of the insurance.

Front 3

Castellain v Preston [1883]

Back 3

Preston recovered fire damage loss from his insurers and also the full purchase price after complete of a sale, making a profit. The insurers were given the right to stand in the place of Preston and recover the amount paid to him in the claim.

Front 4

Scottish Union & National Insurance Co v Davis [1970]

Back 4

The insurer must have been indemnified for an insurer to exercise subrogation rights. For this reason insurers tend to insert a condition which enables them to commence their recovery against the TP before they have settled the insured’s claim.

Front 5

Napier v Hunter [1993]

Back 5

The HOL confirmed that an (indemnity) insurer’s subrogation rights dictate that in a claim against the assured the insurer is not limited to a simple personal remedy; the insurer also had the benefit of an equitable lien over the damage received by the insured. Means that they can recover any excess.

Front 6

Yorkshire Insurance Co v Nisbet Shipping Co [1962]

Back 6

Insured is entitled to any excess. Insurers had paid the insured for the total loss of his ship in a collision. The insured then sued the owner of the other ship responsible for the collision. The damages were recovered in Canadian dollars but when converted to sterling this exceeded the insurance money paid. The windfall belonged to the insured.

Front 7

Lister v Romford Ice and Cold Storage Ltd [1957]

Back 7

The father and son insured by the same company The HOL held that contracts of employment contained an implied term that reasonable care would be taken, and son was entitled to be sued. The insurers used the name of the insured employee to sue an employee in negligence.

Front 8

Page v Scottish Insurance Corporation [1929]

Back 8

Subrogation does not arise at common law until the insured had been indemnified in respect of all claims arising out of the particular event.

Front 9

Commercial Union Ass Co v Lister (1874)

Back 9

Until the insured is indemnified the insured himself retains the right to use a TP, although he must act in a way that does not prejudice the insurer.

Front 10

West of England Fire Insurance Co v Isaacs [1897]

Back 10

Should the assured settle with a third party, or waive his rights of recovery, then he faces liability to the insurers in damages for loss of subrogation rights.

Front 11

Phoenix Assurance Co v Spooner [1905]

Back 11

The insured will be liable to the insurers for the return of the insurance moneys if he settles an action with the TP by accepting a sum being the balance of the claim exceeding the insurance moneys received.

Front 12

Hobbs v Marlowe [1978]

Back 12

The doctrine of subrogation in contracts of insurance is operated entirely by virtue of an implied term of the insurance contract.

Front 13

Morris v Ford Motor Co [1973]

Back 13

where the court feels that it may not be just and equitable.

Front 14

Mark Rowlands Ltd v Berni Inns Ltd [1986]

Back 14

The plaintiff was the freeholder of premises and the tenant was negligent and caused a fire. Held that the parties intended that the landlord should bear the risk of the risk losses, whether accidentally caused or the result of the tenant’s negligence, and that it was implied in the lease that the tenant was immune from liability.

Front 15

Lambert v Keymood Ltd [1999]

Back 15

But tenant may place the burden on the negligent tenant, even though the tenant had paid the insurance premiums by way of service charges.

Front 16

Petrofina (UK) Ltd v Magnaload Ltd [1983]

Back 16

Held that the insurer, having indemnified the contractor under the policy for a loss caused by the negligence of a subcontractor, was unable to exercise subrogation rights against the subcontractor on the basis that the subcontractor as co-insured was to be treated as at one with the named insured so any attempt to exercise subrogation rights would be tantamount to depriving the insured himself of a remedy.

Front 17

Stone Vickers Ltd v Appledore Ferguson Shipbuilders Ltd [1991]

Back 17

An assertion of subrogation rights by insurers would e to subject the contractor to the very loss that co-insurance was intended to cover, and that to avoid that possibility there was to be implied into coinsurance policies a subrogation waiver clause.

Front 18

Co-operative Retail Services Ltd v Taylor Young Partnership [2001]

Back 18

There was held to be an implied term in a contract of insurance that the insurers cannot exercise subrogation rights against a co-insured.

Front 19

Tyco Fire & Integrated Solutions (UK) Ltd v Rolls-Royce Motor Cars Ltd [2008]

Back 19

Held that immunity rested not upon an implied term in the policy but rather upon the allocation of risk between the parties to the main contract.