GB - Ocean Finance & Mortgages Ltd & Anor v Oval Insurance Broking Ltd

Judgment

Mr Justice Cooke:

Introduction

The claimants in this action (collectively OFML), companies which sold secured loans and payment protection insurance (PPI), retained the defendant (Oval), an FSA registered insurance broker with experience in professional indemnity insurance (but none in PPI save for its dealing with OFML). Oval acted as OFML’s producing broker and in turn retained the third parties (which for relevant purposes means the second third party (SWIL)) as placing broker because it was a Lloyd’s broker and had connections with the professional indemnity insurance market in London. SWIL had expertise in the placement of professional indemnity insurance and financial lines but little in respect of the sale of PPI.

The events which are the subject of this action centre on OFML’s professional indemnity insurance arrangements for the period 31st October 2008 to 31st October 2009 during which time OFML had a primary layer policy with a limit of £1.7 million (the CNA 2008/09 Policy) from CNA Insurance Company Ltd (CNA) and an excess layer policy with a limit of indemnity of £3.3 million (the Hiscox 2008/09 Policy) from Hiscox Insurance Company Ltd (Hiscox). OFML threatened proceedings against Hiscox under its later 2009/10 Policy with Hiscox but did not pursue them once Hiscox had made its defence plain. Instead it brought a claim against Oval in which it alleged that Oval had breached contractual and/or tortious duties owed to it in failing to advise it to make a “block notification” to the 2008/09 policies of the entirety of OFML’s 18,000 sales of PPI policies as “circumstances that may give rise to a claim” before the expiry of the policies on 6th November 2009 (after a 7 day extension). CNA had, in circumstances to which I shall refer, paid claims both on its 2008/2009 policy and 2009/2010 policy in circumstances where a block notification had been made to it a year later in 2010, at the same time as a similar notification was sent to Hiscox under its 2009/10 excess layer policy. Hiscox declined to accept that notification and contended that any block notification should have been given in the Hiscox 2008/09 policy year under the terms of that policy and in consequence cover was excluded in the following year, by reason of a provision in its 2009/2010 policy.

SWIL had in fact made a limited notification of circumstances to Hiscox, in October 2009, under the Hiscox 2008/09 policy in respect of customer complaints already made and rejecte

Judgment

Mr Justice Cooke:

Introduction

SWIL had in fact made a limited notification of circumstances to Hiscox, in October 2009, under the Hiscox 2008/09 policy in respect of customer complaints already made and rejecte

Ocean Finance & Mortgages Ltd & Anor v Oval Insurance Broking Ltd

Areas of Law