In Purewal v Countrywide Residential Lettings Ltd [2015] EWCA Civ 1122, the receivers of a property did not make an insurance claim in relation to damage to the property.  The mortgagor of the property (a bankrupt) repaired the property himself.  He brought an action against the receivers for breach of duty by failing to make an insurance claim, claiming damages for the cost of the repairs.

The UK Court of Appeal held that receivers owe a duty to a mortgagor if and to the extent that the mortgagor retains an interest in the equity of redemption (ie the right to redeem the property once the mortgage debt has been discharged).  On bankruptcy, the mortgagor's liability under the mortgage is discharged and the equity of redemption is vested in the trustee-in-bankruptcy (the UK equivalent of the Official Assignee) for the benefit of the general body of creditors.  Although the bankrupt will receive any surplus in the bankruptcy under section 330(5) of the Insolvency Act 1986 and therefore has an interest in the receivers exercising their duties with care, that interest will be protected by the receivers upholding their duty to the trustee.  Therefore, the receivers do not owe a duty to the bankrupt mortgagor.

See Court decision here.