insurance institute of london asg 228 professional indemnity insurance
TRANSCRIPT
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Insurance Institute of London
ASG 228
Professional Indemnity Insurance
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Legal Background
by
Derek Tadiello
11 September 2001
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“The one great principle of the English law is to make business for itself”
(Charles Dickens: Bleak House)
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Areas covered
• contract
• tort
• concurrent duties in contract & tort
• claims by non-contracting parties
• standard of care
• damages
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• limitation
• exclusion clauses
• contributory negligence
• failure to mitigate
• novus actus interveniens
• remoteness
• betterment
Limits on recovery
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Contract
• deeds & simple contracts
• 3 basic elements– offer and acceptance– an intention to be legally bound– consideration (except deeds)
• form - written, oral or mixture
• express and implied terms
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Tort
• 4 requirements– existence of a duty of care– a breach of that duty– damage caused by the breach– foreseeability
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Cases
• Donoghue v Stevenson 1932• Hedley Byrne v Heller 1964• Dutton v Bognor Regis UDC 1972• Anns v LB of Merton 1978• Junior Books v Veitchi 1982• Peabody v Sir Lindsay Parkinson 1985• D&F Estates v Church Commissioners 1989• Murphy v Brentwood DC 1991
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• Ross v Caunters 1979
• White v Jones 1993
• Arbuthnott v Fagan & Feltrim 1994/ Henderson v Merrett 1995
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Concurrent duties in contract and tort
• Midland Bank v Hett Stubbs & Kemp 1979
• Tai Hing Cotton Mill v Liu Chong Bank 1986
• Lancashire Churches v Howard Seddon 1991
• Henderson v Merrett 1994
• Wessex RHA v HLM Design 1994
• Holt v Payne Skillington 1995
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Claims by non-contracting parties• St Martins v Sir Robert McAlpine 1993
• Darlington BC v Wiltshier 1995
• Panatown v Alfred McAlpine 2000
• Baxall Securities v Sheard Walshaw 2000
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Contracts (Rights of Third Parties Act (1999)
• statutory exception to rule of privity of contract
• applies to contracts entered into after May 2000
• enables a third party to enforce the terms of a contract to which it is not a party if:– contract states he may do so, or– contract purports to confer a benefit on him
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Standard of care• Bolam v Friern Hospital 1957
• Whitehouse v Jordan 1981
• Wilsher v Essex Area HA 1988
• Bolitho v City & Hackney HA 1997
• Gloucester HA v Torpy 1997
• Matrix-Securities v Theodore Goddard 1997
• Balamoan v Holden 1999
• David Bond v Sun Alliance 2001
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Damages• Contract & tort
• pecuniary and non-pecuniary
• must be reasonable as between parties
• Ruxley v Forsyth 1995
• inconvenience, discomfort & distress
• Bailey v Bullock, 1950 Perry v Sidney Phillips 1982, Watts v Morrow 1991
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• Hartle v Laceys 1999
• Farley v Skinner 2000
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Limitation periods
• Personal injury - 3 years
• contract - 6 or 12 years from breach
• tort – 6 years from damage, or if later– 3 years from discovery or reasonable
discoverability– cut-off 15 years from last act of negligence
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Deliberate concealment• S32(1)(b) “where any fact….is deliberately
concealed…by the defendant, the limitation period runs from the date the claimant discovered or could have discovered the concealment”
• S32(2) “a deliberate commission of a breach of professional duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty”
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• Brocklesby v Armitage 1999
• Liverpool RC v David Goldberg QC
• Cave v Robinson Jarvis & Rolfe 2001
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Contributory Negligence
• Law Reform (Contributory Negligence) Act 1945
• Basildon DC v J E Lesser Properties 1985
• Forsikringsaktieselskapet Vesta v Butcher 1986
• Barclays Bank v Fairclough 1995
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• Failure to mitigate
• Novus Actus Interveniens
• Remoteness– Hadley v Baxendale 1854– Victoria Laundry v Newnam 1949– The Heron II 1969– Parsons v Uttley Ingham 1978
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Betterment• Philips v Ward 1956
• Harbutt’s Plasticene v Wayne Tank 1970
• Richard Roberts v Douglas Smith Stimson 1989
• Victoria University v Hugh Wilson 1985
• Imperial College v Norman & Dawbarn 1986
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Civil Liability (Contribution) Act 1978
• Where two or more wrongdoers are responsible for the same damage, the Court may apportion damages between them on a just and equitable basis
• liability of parties may be breach of contract, statute or in tort.