Thakerar v (1) Lloyds TSB (2) Groupama (3) Capita (4) Lloyd’s (5) Travelers [20.04.12]
High Court grants legal expenses insurer summary judgment where insured failed to comply with condition precedent.
Following the death of her mother, Ms Thakerar commenced negligence proceedings against two NHS Trusts in September 1998. After instructing six law firms, the claims were settled in 2005 for £60,000.
Between December 2008 and April 2009, Ms Thakerar sued her former solicitors, limiting the claim against each firm to £5,000. She had home contents insurance with add-on legal expenses protection up to £25,000 until December 2005 and, in October/November 2009, sought cover for the six lawsuits. The claims were rejected by insurers, who argued she was in breach of a condition precedent requiring claims to be notified within six months of the causes of action arising. Ms Thakerar’s complaint under the Lloyd’s scheme was also rejected in June 2010.
Ms Thakerar commenced these proceedings in February 2011, acting as a litigant in person. She alleged insurers had wrongfully and unreasonably refused cover, negligently failed to notify her of a change in insurer and prejudiced her claims against her former solicitors because she was left without proper legal representation. The Defendants applied for summary judgment on the basis that the claims had no real prospect of success.
Although similar allegations were made against all the Defendants, the Judge had to consider the claims against each individually, given their different roles. He granted Capita and Lloyd’s’ applications, after finding the claims against them hopeless, as they were not the insurers.
Similarly, he rejected the claims against Groupama and Lloyds TSB because they had no prospect of success, as Groupama did not underwrite the legal expenses arm of the policy and Lloyds TSB had not held itself out as being the insurer - it simply arranged the policy back in 1998.
Travelers was in a different position, as it was the legal expenses insurer. However, as Ms Thakerar had failed to notify the claims within six months of the causes of action arising, Travelers was entitled to rely on this condition precedent. In addition, the policy would only provide an indemnity if the cause of action arose during the policy period and the Judge held that it was almost self-evident that this was not the case.
Ms Thakerar had also failed to provide sufficient particulars of claims on notification, and had failed to avoid legal action, minimise costs or follow the pre-action protocols. As the cost of suing each firm would easily have exceeded the amount in dispute, Ms Thakerar was also in breach of a policy exclusion to this effect. Accordingly, Travelers was also granted summary judgment.
This case illustrates the value of applying for summary judgment at an early stage to defeat litigation insurers consider has no real prospect of success and the court’s willingness to grant summary judgment, where appropriate.
Indirectly, it also demonstrates the importance of clear policy drafting. As the Judge pointed out, when considering an application for summary judgment, he is not trying the case. In this instance, insurers succeeded by relying on various policy terms, not least the condition precedent in relation to notification. The decision reinforces the need for insurers to consider the purpose of policy terms and conditions and ensure the drafting achieves the intended outcome if the insured is in breach.