http://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/2016/484.html&query=(gardner)+AND+(lemma)

The claimant insured sought to lift an automatic stay of his proceedings against the defendant insurance company after the insurer (a Gibraltar company) went into liquidation. The judge refused to lift the stay on the basis that the insured's claim did not pass the threshold of genuine arguability. The Court of Appeal has now dismissed the appeal from that decision.

The liability policy taken out with the defendant in October 2009 provided cover in respect of a "claim" first made during the policy period (or arising from circumstances notified during the policy period). The policy provided that a claim meant "a demand for, or an assertion of a right to, civil compensation or civil damages or an intimation of an intention to seek such compensation or damages".

In August 2010, the insured received a letter from a firm of solicitors which demanded certain information and provided that if that information was not received "we may issue protective proceedings in order to protect our client's position as regards limitation". It added that once the information was received, the solicitors would consider whether a claim for negligence could be brought.

The Court of Appeal agreed with the judge at first instance that the solicitors' letter did not amount to a "claim". It merely sought information in order to decide whether to bring a claim. Nor did it exhibit an already-formed intention even to issue a protective claim form (noting the use of the word "may"). Further, if the solicitors had had sufficient information to begin proceedings, they would not have needed to issue protective proceedings (or seek further information). Although the insured "might perhaps" have treated the letter as a "circumstance" (ie a matter which may give rise to a claim, which was the definition of "circumstances" in the policy), he had chosen not to do so.

The Court of Appeal also rejected an argument that the aggregation clause in the policy required a link to be made between this "claim" and separate disciplinary proceedings which were said to involve "similar acts or omissions in a series of related matters". The aggregation clause did not relate to any other part of the policy, including the part referring to which defence costs would be covered under the policy.

COMMENT: This case follows the line adopted in ARC v Brit (see Weekly Update 05/16). There, it may be recalled, the insured had received a letter from the claimant's solicitors reserving the claimant's rights and seeking an agreement of a protocol for a swift and effective recovery of sums. Cooke J had noted that "there is no formality required for such a demand so long as it is in writing but there must be a demand". He held that that letter had not amounted to a demand. Similarly here, there was no demand for damages, nor intimation of an intention to seek them.

In the absence of an express policy term though, the definition of a claim may be slightly more lax. In Robert Irving & Burns v. Stone Staughton, LJ said that “in the ordinary meaning of the English language the words “claims made” indicate that there has been a communication by the [third party] to the [insured] of some discontent which will, or may, result in a remedy expected from the [insured]".