Declaration granted that defendant reinsurers liable to claimant insurers despite no evidence of reinsurance policy documents. A useful reminder of the application of the best evidence rule, and the operation of the s. 29(5) “acknowledgment of liability” trigger for extending limitation periods.
The decision in R&Q Insurance (Malta) Ltd & Ors v Continental Insurance Co (Unreported, QBE (Comm), Judge Waksman QC, 08 December 2017) is a helpful illustration that the loss of key evidential documents is not necessarily fatal to a claim.
It is also a useful reminder that s. 29(5) of the Limitation Act 1980 allows for a “fresh” accrual of a cause of action, and thus the running of a new limitation period, as at the date that an existing debt or liquidated pecuniary claim has been acknowledged or part-paid by the debtor.
Although the general rule is that a party seeking to rely on the contents of a document must adduce evidence in the form, preferably, of the original document or an official copy, secondary evidence is admissible if the court is satisfied that the original cannot be found or produced after due search.
In this case, the claimants had provided excess layer insurance between 1981 and 1984 for an Australian building materials company, covering product liability risks. The claimants sought to pass a number of mesothelioma claims onto the defendant, who they said was the reinsurer of these risks, although they could not produce a policy, slip or cover note.
The claimants said that reinsurance had been effected via four contracts entered into with the defendant reinsurer between 1981 to 1983, placed by brokers PWS via treaty pool arrangements. They asserted that the defendant reinsured 20% of the risk, and later fronted the pool, so was 100% liable. While the claimants could not produce any evidence of the policies, they said that there was sufficient evidence to show the placement and nature of the reinsurance. This included materials relating to the defendant’s own arrangements for reinsuring their own liability as the claimants’ reinsurer. Evidence was also given that the broker was satisfied that the reinsurance had been placed in the relevant pools. The court accepted that the claimants had made genuine and extensive efforts to search for the policy documents but could not find them. Therefore it had to weigh the evidence that it did have.
The court was satisfied on the available evidence that the reinsurance had been obtained, and that the defendant had reinsured a 20% share and had also fronted for the pool from the end of 1983. Finally, the court found that there was also sufficient evidence that the underlying mesothelioma claims had been paid by the claimants and fell within the terms of the insurance cover, rejecting the defendant’s position that it should not have to pay costs and expenses for either those claims, or the costs and expenses of the claimants as re-insureds.
The court also rejected the defendant’s arguments that the proceedings were time-barred; there was evidence showing that the defendant had acknowledged liability in communications in 2011 and 2012, thus triggering the operation of section 29(5) of the Limitation Act 1980. This allows for a “fresh” accrual of a cause of action, and thus the running of a new limitation period, as at the date that a debtor has acknowledged an existing debt or liquidated pecuniary claim. For this purpose, it did not matter that the amount of the liability had to be ascertained by reference to evidence extrinsic to the acknowledgment itself.