R & Q Insurance (Malta) Ltd & Ors v Continental Insurance Co [2017]

The Claimants were unable to locate the wording, slip or cover note for reinsurance written in the early 1980s and faced a denial of liability from the Defendant reinsurer. The court ruled that the absence of such documentation did not defeat the claim and may not always be crucial in proving the existence of the contract.


Between 1981 and 1984, the Claimants provided an Australian building company with insurance cover for product liability risks. The Claimants submitted that they reinsured the risk by way of four contracts with the Defendant, who were fronting for a pool.

Mesothelioma claims began to surface in 2004. The Claimants called upon the Defendant for the reinsurance cover which, by this point, had been placed some 20 years earlier. The parties entered into years of negotiation and discussion, during which there were significant changes in the organisations involved. Staff moved on from the Defendant company, the ownership and management of the Claimant companies changed, and the brokers who had originally set up and promoted the pool were sold.

Steps taken to find the documents

The judge found that the Claimants had made genuine and extensive attempts to locate the documents. Correspondence showed repeated attempts to obtain the key contractual documents, particularly from the brokers.

As the primary documents were missing, it was for the court to weigh up other evidence that each reinsurance contract did, or did not, exist. The case did not concern any allegations of fraud or serious misconduct and there was no reason for the court to put a gloss on the normal standard of proof, namely the balance of probabilities.

Secondary evidence considered

Neither party were able to present a witness who had direct and personal knowledge of the contracts. The judge did not consider this surprising, given the time which had passed, and the various changes that had taken place. The judge was persuaded by evidence given by the founder of the brokers. His evidence was that the reinsurance was placed in the relevant pool. Fronting for the pools was a basic and commercially necessary arrangement, and the Defendant had agreed to take on this role for a fee. There was also limited supporting documentary evidence, from the Claimants' computer records and brokers' files.

The absence of contract documents is not fatal to a claim

The case shows that in appropriate cases the court will recognise the difficulties identifying relevant records proving the existence of contracts made decades earlier. The judge said that he was "quite sure that the claimed reinsurance was placed" with the relevant pools for the years in question.

It remains for the Claimant to prove the existence of an insurance or reinsurance contract. The court will undoubtedly be cautious should key contractual documentation be unavailable. If a Claimant can show that they made genuine efforts to locate the documents and provide a reasonable explanation for the documents' absence, they may still present secondary evidence, and may succeed in proving the existence of the contract.

Having made this determination the judge went on to consider difficult questions regarding limitation, and the effect of acknowledgment of the claim. This debate highlights the ongoing need to be cautious for longtail treaty business to ensure that steps are taken to protect claims, either by entering into standstill agreements, or issuing protective proceedings where necessary.

Julian Miller, reinsurance partner at DAC Beachcroft, noted the difficulties with very old contracts where records are often far from perfect. This case reflects the difficulties in these cases but shows that the court is willing to adopt a level of pragmatism if the facts warrant this.