In HLB Kidsons (a firm) v Lloyd's Underwriters subscribing to Lloyd's policy No. 621/PK1D00101 and others – Butterworths Law Direct 5.11.08 the Court of Appeal considered whether the Claimant had given to the underwriters effective notification of circumstances for the purposes of general condition (GC4) of the insurance cover, such as might cover subsequent claims or some of them. GC 4 provided that ‘The assured shall give to the Underwriters notice in writing as soon as practicable of any circumstances of which they shall become aware during the period specified in the Schedule which may give rise to a loss or claim against them.’ Consideration was given, inter alia, as to whether the expression in GC4 'as soon as reasonably practicable' was a condition precedent; and, if so, whether its force as a condition precedent was removed by the part of the policy terms headed 'General Institute Conditions'.
The Court of Appeal held that notification in this case was a means of working out contractual rights, not of departing from them. In all the circumstances of the instant case, effective notification had been given to the underwriters.
It was also held that the function of the phrase ‘as soon as practicable' was clearly that of a condition precedent. The policy was a claims made policy, namely, it primarily insured only claims made against the assured within the policy year, but 'such notice having been given' it extended to cover claims made outside the policy year where such claims arose out of the circumstances of which notice had been given. That extension was achieved by deeming such post-expiry claims to have been made during the policy year. The deeming provision emphasised, even as a matter of drafting technique, that the basis of cover remained the same. The price or condition of that extension, or of that deeming provision, was the giving of proper notice. The language of GC4 reflected the functional and purposive basis of the insurance as a whole by making the extension or deeming of cover depend on the giving of the notice defined in GC4's first sentence. GIC(b) did not 'unmake' that condition precedent. The whole premise and assumption of GIC (b) was that the breach of a condition precedent had been waived, so that the breach or non-compliance spoken of by the clause could only be remedied by damages, and the breach concerned had been transformed into the breach of a merely innominate term.