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Very late amendments refused by the Commercial Court: BAGA v PSL & Ors

On 21 August 2017, Mr Justice Knowles heard and dismissed the Claimants’ application to amend their claim, which would have extended the allegations against the Third Defendant, Perkins Slade Limited (“PSL”), to include acts or omissions as regards excess layer insurers in addition to the allegations already made as against the primary layer insurers.

From 2001 until 20 August 2014, PSL was retained as insurance broker and claims handler for and on behalf of the First Claimant, the British Amateur Gymnastics Association (“BAGA”) and its clubs. During the period of this retainer, PSL placed a Combined Policy (which included public liability cover) with the First Defendant (“Zurich”) for 1 October 2012 to 30 September 2013 and arranged for the placement of a “Combined Liability Insurance Policy” (which included public liability cover), with the Second Defendant (“Brit”) for 1 October 2013 to 30 September 2014 (“the Brit Policy”). Both of these policies had limits of £5 million per occurrence.

PSL also placed cover on behalf of BAGA for the excess layer of up to £10 million with an excess layer insurer for the periods 1 October 2012 to 30 September 2013 and 1 October 2013 to 30 September 2014. On 11 September 2014, the excess layer insurer purported to avoid the 2013-2014 policy and on 29 September 2014, the excess layer insurer returned the premium that BAGA had paid pursuant to the 2013-2014 policy.

The claim arose out of a serious personal injury sustained by a 16-year-old person at the premises of the Second Claimant (“the Club”) on 24 September 2013. The injured person had commenced proceedings against the Club in the High Court in Northern Ireland for damages for personal injury.

Due to Zurich and Brit declining coverage and avoiding the policy respectively, the Claimants brought a claim against Zurich and in the alternative against Brit for a declaration that they had wrongfully refused to accept coverage in respect of the claim and/or to provide an indemnity to the Claimants in respect of their liability to the injured person.

The residual claim against PSL was brought on the basis that they failed (i) to ensure valid notification of the claim was made within the respective terms of the Zurich and Brit policies; (ii) to take reasonable care to ensure that there was timely disclosure to Brit of all material circumstances relating to the Incident; and/or (iii) to protect the Claimants from unnecessary risks with respect to their insurances including the risk an insurer would reject a claim and/or avoid or purport to avoid a policy.

At the time the application was made, the parties had completed disclosure, exchanged witness statements, exchanged expert reports and the experts were in the process of providing their joint memorandum. The trial was due to start on 6 November 2017 (for 8 days).

The Claimants sought leave to amend their Particulars of Claim to raise further allegations against PSL for (i) failure to ensure that a valid and timely notification of the accident as “circumstances that could give rise to a claim” (as provided for in the 2012-2013 policy) was made to the excess layer insurer within the terms of the 2012-2013 policy; and (ii) failed to fulfil its duty of disclosure and failed in particular to make timely disclosure of the accident to the excess layer insurer (for the purposes of the 2013-2014 policy).

Mr Justice Knowles dismissed the application and refused the Claimants permission to amend their case as:

  1. The trial date would be lost and the overriding objective strongly favoured the retention of the trial date.
  2. The amendments were not as clear and complete as they might be at this late stage.
  3. The Claimants had known the position of excess layer insurers throughout. It had been apparent from a very early stage that the injury that underlay the litigation was serious and it must have been apparent for a long time that the matter could reach into the excess layer.
  4. The Claimants had not adequately explained why the amendments being sought were not sought before the time at which the application was made.

The decision is a useful example of the court’s strict approach to applications for late amendments and the heavy burden placed on the applicant to justify the lateness of the application.

A copy of the judgment can be found here.

Ben Quiney KC and James Sharpe were instructed on behalf of PSL by Mills & Reeve LLP.

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