Date: Thu, 26 Aug 2004 13:02:50 +0100

From: Richard Lewis

Subject: Insurance and tort

Further to Jason Neyers notice of the English case of Gwilliam, I am to publish in the first issue of Legal Studies in 2005 an article dealing with insurance and the tort system. It will examine Jane Stapleton's MLR view that insurance has lacked influence and been no more than a "make weight" argument in the development of tort liability. In looking at the wider context, the article describes the overwhelming importance of insurers to the litigation system, and argues that all cases are affected by insurance practice. I can e-mail a advanced copy to anyone interested.

With regard to Gwilliam itself, the majority of the Court of Appeal agreed that such an insurance inquiry should be made even if the contractor appeared otherwise competent, at least if he were to perform hazardous work. However, the scope of this duty was severely limited: it did not extend to checking the terms of the policy itself, or to discovering whether the policy was still current. As a result, on the facts of the case, the occupier was held not liable for a negligent fairground contractor who had recently allowed his liability insurance to expire.

Sedley LJ strongly dissented. He feared that to create an independent duty to check for insurance would be a major extension of liability, and that this should not be done without more detailed information about the social and economic impact. He commented that the test for establishing a duty of care was as much a restrictive as an expansive test, and could be used "to keep in check the tendency of contemporary western tort law to creep towards a situation in which anyone can sue anyone for anything." Sedley's strong argument had some effect for he received support:

1. from the first instance judge in Bottomley v Todmorden Cricket Club [2004] PIQR P18. (The Court of Appeal in this case did not find it necessary to determine whether an independent duty arose.) and

2. from the Court of Appeal in Naylor v Payling, where it was decided that, in the absence of special circumstances, there should be no free-standing duty to check insurance.

Professor Richard Lewis
Cardiff Law School,
Cardiff University

Tel: 029-20874341
http://www.cf.ac.uk/claws/staff2/profile.php?id=24

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