A recent ruling in John Youngs Insurance Services Ltd v Aviva Insurance Services UK Ltd  EWHC 1515 (TCC) addressed the issue of whether a fiduciary duty arose in an agreement to provide insurance claims handling services.
John Youngs Insurance Services Ltd (John Youngs) had entered into an agreement with Aviva Insurance Services UK Ltd (Aviva) to provide claims handling services to Aviva and building repair services for policyholders. Following termination of the agreement, John Youngs brought proceedings against Aviva for unpaid invoices and other costs, upon which Aviva issued a counterclaim, arguing that John Youngs had provided insufficient records and documents to prove their claim and that they owed Aviva a fiduciary duty of enquiry and account which survived termination of the agreement.
In the judgment, Ramsey J concluded that:
- There was a distinction to be drawn between the various activities performed by John Youngs. When, as part of its claims handling duties, it acted as agent to Aviva in deciding the validity of claims, it owed Aviva a fiduciary duty to act in its best interests. This was because in performing these duties, an obligation of loyalty arose, giving rise to a relationship of trust and confidence. However when assessing the scope of works, producing estimates and carrying out building works, John Youngs was either acting as principal rather than agent in providing services to the policyholder, or was not acting as an agent in circumstances which gave rise to a fiduciary duty and so no fiduciary duty arose.
- The equitable duty to account was distinct from the contract. For the aspects of the agreement where John Youngs acted under a fiduciary duty, the termination of the contract did not bring that duty to an end.
- Having found that a fiduciary duty only arose in relation to certain activities conducted by John Youngs, the equitable duty to account only arose in relation to limited information requested by Aviva which related to those particular activities.