English insurance law has traditionally been perceived as very insurer-friendly, and as a result, England and Wales has been viewed as an insurer-friendly jurisdiction for insurance disputes. To a large extent this is the product of English legal history, with many of the most significant developments in English insurance law taking place in the context of marine insurance or similar overseas risks.2 Until as recently as 2015, the leading statute in English insurance law was the Marine Insurance Act 1906 (much of which also applied to non-marine insurance). In risks from that period of history, the information asymmetry between the insured and the insurer was especially acute. To resolve that asymmetry, English insurance law developed to place onerous duties of disclosure and compliance with warranties on insureds, with potentially drastic consequences for failure.

However, that historic imbalance has recently been partly redressed by the Insurance Act 2015, the most important development in English insurance law since the Marine Insurance Act 1906. The Insurance Act recasts the insured's duty of disclosure, the ability of insurers to convert pre-contractual representations into warranties, and sets out a new regime of proportionate remedies for insurers. However, at the time of writing there have been very few disputes under the new law, and so it remains to be seen precisely how it will be applied. There are also indications that insurers are seeking to contract out of many of the provisions of the Act where possible in commercial policies. The first significant disputes to test the new regime are anticipated in the next couple of years.


i Sources of insurance law and regulation

English insurance law is a mixture of common law drawn from cases before the courts and statute. Many of the principles developed during early insurance disputes, including the duty of 'utmost good faith' were codified in the Marine Insurance Act 1906, which continues to influence insurance law in the United Kingdom, the United States and the Commonwealth jurisdictions. Although the 1906 Act expressly governs marine insurance, many of its sections and principles are also applicable to non-marine insurance contracts, and it was the most significant statute in English insurance law until the Insurance Act 2015 came into force on 12 August 2016.

Other key statutes regulate risk-specific insurance contracts. For example, the development of life and fire insurance contracts led to the Life Assurance Act 1777 and the Fire Insurance Duty Act 1782, key parts of which remain in force today. General consumer legislation, such as the Consumer Rights Act 2015, also applies to consumer insurance contracts.

Firms providing insurance, reinsurance services or insurance intermediation must be authorised to do so under the Financial Services and Markets Act 2000. The Prudential Regulation Authority is responsible for the authorisation of such firms. The Financial Conduct Authority (FCA) regulates the conduct of authorised firms and the FCA Insurance Conduct of Business Sourcebook applies to the sale of general and protection insurance products, outlining expected standards for insurers such as the maintenance of suitable customer information, appropriate product disclosure and fair claims handling. Commercial parties are not required to take out insurance with local providers, although any entities wishing to sell insurance products in England and Wales must be FCA-authorised.

We cover the recent developments in the common law in Section III below, but English insurance law has also seen substantial statutory revision (or restatement) in recent years. The four significant recent statutes are:

  1. The Enterprise Act 2016, which for the first time provides policyholders with a potential right to claim damages in the event of a late payment of a claim by an insurer. Before the Enterprise Act 2016, policyholders could not recover any additional losses they suffered as a result of undue delay in payment of a claim by an insurer.
  2. The Third Party (Right against Insurers) Act 2010 (updating the 1930 legislation with the same name) updated and strengthened the regime whereby a third party with a claim against an insolvent insured can, following the insolvency, pursue that claim directly against the insolvent insured's insurers. The insurer continues to have any defences available to the insured in the third party's claim, and any defences that the insurers may itself have under the terms of the relevant policy.
  3. The Consumer Insurance (Disclosure and Representations) Act 2012 (or CIDRA), which applies only to consumer insurance contracts, limits the consumer's duty of disclosure, establishing that an insurer must ask appropriate questions to which the consumer must answer honestly and carefully.
  4. The Insurance Act 2015 (the Insurance Act) applies to both consumer and business insurance contracts entered into from 12 August 2016. The most significant developments to English insurance law now codified in the Insurance Act are:
    • The Insurance Act alters the policyholder's duty of disclosure in non-consumer insurance. Before the Insurance Act, the insured was under an onerous duty to disclose all known material facts about the risk to be insured. A failure to disclose any material fact would entitle the insurer to avoid the policy (and so avoid paying any claims), if the insurer could show that, if that fact had been disclosed, it would not have written the policy on the terms it in fact did (or not written it all). The ability to avoid arose whether the non-disclosure was fraudulent, negligent or indeed innocent. As a result, insurance disputes in England were often characterised by searches for, and arguments over, alleged non-disclosures.

      The Insurance Act replaces that duty with a new duty on the insured to make a fair presentation of the risk to be insured. The insured must now disclose all material circumstances it knows or ought to know, or provide sufficient information to place a prudent insurer on notice to make further enquiries. Thus the burden is shifted in part onto the insurer. For policies entered into after 12 August 2016, it will be enough for an insured to disclose sufficient information to place a prudent insurer on notice to make further enquiries. If the prudent insurer's enquiries would have a revealed a material circumstance that was not disclosed, but the actual insurer made no such enquiries, the insurer may no longer be able to avoid the policy for non-disclosure. Further, if the insurer can establish a breach of the duty to make a fair presentation of the risk that induced it to write the policy, it will no longer automatically be entitled to avoid the policy. To do so the insurer will now need to show either that the breach was deliberate or reckless, or that if a fair presentation had been made it would not have insured the risk at all. If the breach is not deliberate or reckless, and the insurer can only show that it would have insured the risk on different terms (e.g., for a higher premium), the insurer's remedy is to treat the policy as though it were written on those different terms.
    • The Insurance Act includes new provisions relevant to breach of warranties in insurance policies. Whereas a breach of warranty previously discharged an insurer from liability under a policy from the date of breach, the Insurance Act introduces proportionate remedies, abolishing any rule of law that maintains a breach of an express or implied warranty results in automatic discharge of the insurer's liability. For example, if the breach is neither deliberate nor reckless and the insurer would still have entered into the contract, the insurer is only able to reduce cover on a proportionate basis; if breach is neither deliberate nor reckless but the insurer would not have contracted, the insurer is able to avoid the contract but must return the premiums to the insured. Any policy terms purporting to convert pre-contractual representations made by the insured into a warranty (known as 'basis of contract' clauses) will no longer have effect.
    • The Insurance Act clarifies the remedies available to an insurer in the event an insured makes a fraudulent claim. If a fraudulent claim is made, the insurer is not liable for any part of that claim, and can terminate the policy from the date of the fraud. However, the insurer cannot avoid the policy altogether, and remains liable for genuine pre-fraud claims.

ii Insurable interest

English law has historically maintained that for an insurance contract to be valid the insured must have an insurable interest in the subject matter of the policy. An insurable interest is a legal or equitable interest in the subject matter of the insurance, or some interest short of a legal or equitable interest that means the insured would suffer disadvantage or be deprived of an advantage should the risk manifest.

The historic centrality of insurable interest to the concept of insurance in English law means that certain types of derivative contracts, such as credit default swaps, which in many ways economically mirror an insurance arrangement, are not considered (or regulated) as insurance contracts in English law.

Following recent legislative reform there is uncertainty as to whether an insurable interest is a common law requirement or an indirect statutory requirement. Before the Gambling Act 2005, there was a clear statutory basis for insurable interest. The 1906 Act codified the general rule of law (for marine insurance) into a statutory requirement; the Life Assurance Act 1774 rendered life and contingent insurance contracts void without an insurable interest; and the Gaming Act 1845 created an indirect requirement for an insurable interest in all other contracts of insurance.

The Gambling Act 2005, which was intended to regulate new types of gambling activities, removed the 1845 Act's indirect requirement for insurable interest. As the Act did not intend to affect insurance, the impact of the 2005 Act on insurable interest may be limited. However, uncertainty now exists as to the exact legal basis of insurable interest, and proposals by the Law Commission of England and Wales to include a statutory definition of insurable interest in the Insurance Act were rejected. Nevertheless, the English and Welsh and Scottish Law Commissions are currently consulting on a draft Insurable Interest Bill to introduce a statutory definition of insurable interest.

iii Fora and dispute resolution mechanisms

Insurance disputes with a value greater than £100,000 will generally be heard at first instance in the High Court. The Commercial Court, a specialist court within the Business and Property division of the High Court, has specialist judges with insurance experience and will be the most common forum for large insurance disputes. If a claim is greater than £50 million and raises issues of general importance to financial markets, it may be heard on the 'Financial List', a specialist cross-jurisdictional list established to handle claims related to the financial markets. At first instance the dispute will be heard by a single judge.

Appeals from the High Court are heard in the Court of Appeal, usually by a panel of three Lord Justices of Appeal. To appeal to the Court of Appeal the appellant will need to obtain the court's permission, and to obtain this he or she will need to show that, where the appeal is a first appeal (i.e., the decision being appealed is not itself an appeal from a lower court), the appeal would have a real prospect of success or there is some other compelling reason for it to be heard. Where the appeal to the Court of Appeal is a second appeal (i.e., the decision being appealed is itself an appeal from a lower court) the appellant will need to show that the appeal would have a real prospect of success and there is some other compelling reason for it to be heard.

Appeals from decisions of the Court of Appeal are heard in the UK Supreme Court (the United Kingdom's highest court), usually by a panel of five Justices of the Supreme Court. Again, the appellant will need to obtain permission to appeal, which will only be granted if it can be shown that the appeal raises an arguable point of law of general public importance that ought to be considered by the Supreme Court.

Claims with a value less than £100,000 will be heard in the relevant county court (which is usually the local county court of the defendant). The Financial Ombudsman Service (FOS) can also independently review and settle non-contentious complaints between an insured and insurer. The FOS is primarily designed to deal with the complaints by individual consumers, but complaints can also be brought by, or on behalf of, small businesses who, as customers, use financial services. To qualify, the business making the complaint must have an annual turnover of no more than €2 million and fewer than 10 employees. Decisions of the FOS are binding on insurers, and can only be challenged by judicial review.

The English courts encourage alternative dispute resolution (such as mediation) both before and during arbitral or litigation proceedings. An unreasonable failure to engage in alternative dispute resolution may lead to the refusing party being required by the court to pay more of the other party's legal and other costs of pursuing the claim (or receiving less of their own costs if successful). Mediation is the most widely used form of alternative dispute resolution in insurance disputes, but other alternatives include expert determination, adjudication and early neutral evaluation.

It is common for English law-governed insurance contracts to contain a London-seated arbitration clause. The QMUL 2018 International Arbitration Survey identified London as the most popular choice of seat for arbitration and the London Court of International Arbitration as the most popular institution after the International Chamber of Commerce's International Court of Arbitration. London also remains a popular choice of seat for arbitrations arising out of Bermuda Form excess liability insurance policies. Bermuda Form policies often achieve a transatlantic balance between the perceived insurer-friendly laws of England, and the perceived insured-friendly laws of New York, by providing for the policy to be governed by New York law but for disputes to be resolved in London-seated arbitrations (and thus in accordance with English procedural law).

Under the Arbitration Act 1996, an arbitral award issued by a London-seated tribunal can only be challenged in the English courts on the basis:

  1. that the arbitral tribunal did not have substantive jurisdiction (Section 67); 
  2. of a serious irregularity affecting the tribunal, the proceedings or the award, and which has caused or will cause substantial injustice (Section 68). The types of serious irregularity are set out in Section 68(2) and range from the tribunal exceeding its powers to the failure of the tribunal to deal with the issues that were put to it; and 
  3. of a question of law (Section 69). To challenge an award on this basis requires leave to appeal from the court (which is not required for a challenge under Sections 67 or 68), which will only be given if the decision of the tribunal on the question of law is obviously wrong, or the question is one of general public importance and the decision of the tribunal is at least open to serious doubt.

While it is common for London-seated arbitral agreements to exclude appeals on the grounds of a question of law, it is not possible to exclude appeals regarding substantive jurisdiction or serious irregularity.    


There have been a number of significant recent cases in the English courts, including three recent decisions of the Supreme Court relating to aggregation of claims, exclusion clauses and fraudulent claims, respectively. We summarise below the key recent cases in the order of the life of an insurance policy and claim – from the insured's duty of disclosure before the inception of the policy, through key policy terms and issues around the notification and aggregation of claims, to issues that arise in the course of disputes including dishonest and fraudulent claims, the measure of loss and procedural issues.

i Non-disclosure and inducement

In Axa v. Arab Insurance Group (ARIG),3 the Court of Appeal gave guidance on the approach to be taken to assessing inducement where a breach of the insured's duty of disclosure is established. Axa is a case on the pre-Insurance Act duties of disclosure,4 but as the Insurance Act has not altered the test of inducement, this guidance will be equally relevant in disputes where breach of the insured's duty to make fair presentation of the risk under the Insurance Act is in issue.

Axa concerned a first loss reinsurance treaty for marine energy construction risks, which Axa sought to avoid on the grounds that ARIG had failed to disclose its loss history. ARIG argued that disclosure would not have influenced a prudent underwriter, and so there was no inducement. The three questions the court needs to ask and answer when considering inducement are:

  1. What did the insured need to disclose in order to make the presentation of the risk fair? This is an objective question to be answered by reference to what a reasonable and prudent insurer would have required.
  2. If the additional information identified in answer to the first question had been disclosed, what additional matters would the insured or the broker have then said to the insurer to encourage it to write the risk?
  3. How would the additional information in answer to the first two questions have influenced the decision to insure or the terms on which the policy was written? This is a subjective question as to the approach the actual insurer would have taken, not the approach a reasonable and prudent insurer would necessarily have taken.

The court also clarified that the burden of proof in relation to questions (a) and (c) is on the insurer, but that there is an evidential burden on the insured to show what additional matters, if any, should form the answer to question (b). On the facts of Axa, the Court of Appeal upheld the High Court's finding that the (re)insurer had not discharged the burden of proof in relation to question (c) to show that disclosure of the loss history would have influenced the insurance decision.

ii Compliance with policy conditions

In two recent cases, the English courts have considered the consequences of a failure by a policyholder to comply with claims cooperation conditions, in particular conditions requiring the provision of information to insurers in the event of a claim, but with very different outcomes.

In Denso Manufacturing v. Great Lakes Reinsurance,5 the High Court held that clauses in an ATE policy requiring the insured to cooperate with insurers in the defence of claims, and to provide information to insurers when requested, were conditions precedent to insurers' liability under the policy. As a result, the insured's failure to comply with those cooperation clauses allowed the insurers to reject payment of a claim.

In contrast, in Ted Baker v. AXA,6 in investigating a claim the insurer had requested certain accounting information from the insured relying upon a condition to the policy requiring its provision. The insured did not provide the information and the insurer sought to reject the claim for breach of the condition. The insured argued that the insurer could not reject the claim as there had been an agreement to waive provision of the information until other preliminary matters had been determined. The Court of Appeal held that there had been a breach of the policy condition, which would ordinarily entitle the insurer to reject the claim. It also held that there was no binding agreement to waive provision of the information, nor a general obligation on an insurer to warn an insured of the need to comply with policy conditions. However, on the facts, the insurer was under a duty to speak to prevent the insured from breaching the condition under the misapprehension that it was not obligated to do so as a result of the perceived agreement. The insurer's failure to tell the insured that the accounting information was still required, instead allowing the insured to breach the condition on the mistaken understanding that the information was not yet required, gave rise to an estoppel by acquiescence that prevented the insurer from relying on the breach of condition to reject the claim.

iii Exclusion clauses

In Impact Funding Solutions v. AIG Europe Insurance Ltd,7 the Supreme Court held that exclusion clauses in insurance policies are not subject to the general rule of construction in English law that clauses that purport to exclude one party's liability to another should be interpreted narrowly. Unlike such clauses in more general contracts, the purpose of an exclusion clause in insurance is to delineate the scope of the cover, not to limit the scope of liability one party has to another in the event of a breach of contract. As a result, the policy reasons for construing such clauses narrowly do not apply to exclusion clauses in insurance policies, which are to be construed in the same manner as any other clause in a contract.

iv Notification and aggregation

There have been a number of recent cases in England considering both the insured's rights and obligations to notify claims to its insurer, and whether multiple claims arising out of similar circumstances are to be treated as one claim – and thus subject to only one deductible and one policy limit – for insurance purposes. The meaning of any particular notification and aggregation clause will turn on the particular words used, but the following recent cases give some guidance as to the approach the English courts are taking to these clauses.

In The Cultural Foundation (t/a American School of Dubai) and another v. Beazley Furlonge Ltd and others 8 the High Court stated that the existence of a notification to an earlier policy did not preclude a claim on a later policy, providing that a valid notification was also made during that policy period and the later policy did not contain a clause excluding prior notified circumstances. In such a case an insured could potentially be in a position to make an election as to which policy they pursued the claim under.

In Maccaferri Ltd v. Zurich Insurance Plc [2016] EWCA Civ 1302, the policy required the insured to notify insurers 'as soon as possible after the occurrence of any event likely to give rise to a claim'. The Court of Appeal held that this wording did not impose an obligation on the insured to carry out a rolling assessment as to whether a past event was likely to give rise to a claim, but only to ascertain at the time the event occurred whether it was likely to give rise to a claim (and if so, to notify). If a particular event was, at the time, not likely to give rise to a claim, but subsequently did, the insured would not be in breach of the notification condition if it only notified insurers once the claim was received. Equally, an insured could not be required to give notice of an event until he had actual knowledge of its occurrence, even if that knowledge was only gained some time after the event occurred.

In AIG Europe Ltd v. OC320301 LLP 9 the Supreme Court interpreted the meaning of the phrase 'a series of related matters or transactions' in the aggregation clause of a standard form solicitor's professional indemnity policy. Its findings in the case were fact-specific, but it also laid down a general principle for the interpretation of aggregation clauses. The court noted that such clauses can operate in favour of either the insurer or the insured, depending on the quantum of the claims involved. In other words, such clauses are not typically pro-insurer or pro-insured, but very much depend upon the relevant facts. The court, therefore, found that 'they are not to be approached with a predisposition towards either a broad or a narrow interpretation'.

Spire Healthcare Ltd v. Royal & Sun Alliance Insurance Plc [2018] EWCA Civ 317 considered whether claims arising out of 700 separate operations performed by one surgeon should be aggregated as one claim. The schedule to the policy set the coverage limits at £10 million for any one claim, and £20 million for all claims. However, a proviso in the policy described the lower £10 million limit as applying to all claims 'consequent on or attributable to one source or originating cause'. Applying the principle in AIG, the Court of Appeal held that the proviso intended to introduce aggregation wording into the concept of a claim, and thus the reference to one claim in the schedule was to be read in light of the aggregation wording. All of the over 700 claims arose from the same source or originating cause (the same surgeon), and therefore were to be aggregated as one claim.

v Fraudulent claims

Before the Insurance Act, under English common law it had long been established that if an insured made a claim tainted by fraud, the insurer was not liable to pay any part of the claim.10 The Insurance Act places the remedies available to an insurer for a fraudulent claim on a statutory footing, but does not define what constitutes a fraudulent claim. The Supreme Court has recently considered that question in Versloot Dredging BV and Another v. HDI Gerling Industrie Versicherung AG and Others.11 It is well established that claims that are entirely fabricated, or that are part genuine but part dishonestly exaggerated, are fraudulent claims for the purposes of the common law rule and now the Insurance Act.12 However, the Supreme Court had to consider whether a claim in which the insured dishonestly embellished information to try to establish cover, but where such information was in fact irrelevant to the merits and quantum of the claim, was nevertheless a fraudulent claim. The Supreme Court categorised such irrelevant embellishments as 'collateral lies', and held that they do not deprive the insured of its claim, provided that the collateral lie was not material to the merits of the insured's claim.

However, Aviva Insurance Ltd v. Ahmed 13 serves as a stark warning that the consequences of making a fraudulent insurance claim may not end with the failure of the claim and the avoidance of the policy. In that case an individual who pursued a fraudulent claim at trial was also found to be in contempt of court, and was imprisoned for nine months.

vi Recoverable loss

In Engelhart CTP v. Lloyd's syndicate 1221 and others,14 the High Court held that an all risks policy did not cover losses resulting from fraud when the goods that were the subject of the fraud did not exist at all. The claimant had insured a cargo of copper ingots, but when it took delivery discovered that the cargo contained no copper at all. The relevant cargo all risks policy provided cover for 'physical loss of or damage to goods . . . [insured hereunder through the acceptance by the Assured and/or the Shippers of fraudulent documents of title]'. The High Court held that fraudulent absence of the copper did not equate to a 'physical loss of or damage to goods'. For there to be a physical loss of goods, the goods had to exist in the first place. Therefore, where the fraud perpetrated by fraudulent documents of title was a total absence of the relevant goods, the losses were purely economic and there was nothing that was physically lost.

vii Security for costs

One of the more common interim remedies sought in disputes before the English courts is security for costs. An order for security for costs is an order that one party pay into court a sum to be held by the court as security for that party's potential costs liability to the other party, in the event they are unsuccessful in the dispute. One of the most common grounds on which a party will seek an order for security for costs is that there is reason to believe that the other party will be unable to pay the legal costs of the winning party, if ordered to do so (this correlates with the general rule in English law that the loser will be ordered to pay a substantial proportion of the winner's costs).15 Among the factors that the English court will take into account in exercising its discretion to make an order for security will be the merits of the claim, and whether the potential inability to pay costs has been caused by the conduct of the party seeking the order. In Deleclass Shipping v. Ingosstrakh Insurance,16 the High Court confirmed that, in a security for costs application made by an insurer against an insured, the insurer's failure to pay the insured's arguable claim can be considered a cause of the insured's impecuniosity. It was thus a relevant factor for the court to take into account in deciding whether to grant the insurer's application for security for costs.


The rules that will be applied by the English courts to determine where insurance disputes between international parties are heard depend on where the insurer and the insured are domiciled. If both are domiciled in EU Member States, jurisdiction is determined in accordance with the European Parliament and Council Regulation 1215/2012 (the Recast Brussels Regulation). If one party is domiciled in an EU Member State and another in an EEA Member State, then jurisdiction is determined in accordance with the Lugano Convention. Finally, in cases where the defendant is domiciled outside of the EEA, the jurisdiction of the English courts is determined by Part 6 of the Civil Procedure Rules (the CPR). Domicile is determined as at the date of issue of the proceedings.

The Recast Brussels Regulation contains specific, insured-friendly rules (in Articles 10 to 16) on the determination of jurisdiction over insurance disputes (though these rules do not also apply to reinsurance disputes or contribution claims). Those rules provide that:

  1. the insured has the option of suing in the jurisdiction where they are domiciled (Article 11(1)(b)) or in the jurisdiction where the insurer is domiciled (Article 10); but
  2. insurers are restricted to suing an insured in its country of domicile (Article 14). However, Article 14.2 clarifies that this rule does not affect the insurer's ability to bring a counterclaim if sued by the insured in a country other than that of its domicile.

There are also specific rules for insurance of real property and liability insurance (Article 12), which allow the insured also to sue in the place where the harmful event to the property occurred or the harmful act resulting in liability occurred. Articles 15 and 16 of the Recast Brussels Regulation restrict the ability of insurers to remove the benefit of the rules in Articles 10 to 14 by including exclusive jurisdiction clauses in policies. However, those restrictions do not apply to large commercial risks, which encompass most risks insured by any company with a balance sheet total of at least €6.2 million, a net turnover of at least €12.8 million, and an average 250 or more employees. For any company that equals or exceeds these metrics, an exclusive jurisdiction clause in an insurance policy will still be effective to determine where any disputes are heard.

The position under the Lugano Convention is materially the same as that under the Recast Brussels Regulation.

Where the defendant (which in insurance disputes is usually, though not always, the insurer) is domiciled outside of the EEA, Part 6 of the CPR provides that the English court will have jurisdiction over a dispute if the claimant has the right to serve the claim form on the defendant, and the English court is satisfied that it is appropriate for the case to be heard in England. A claimant will have the right to serve the claim form on a non-EEA defendant without the court's permission if the defendant is present in England (even if only temporarily and habitually resident overseas), or has nominated a solicitor or process agent in England who is authorised to receive service. Often in insurance policies with an English jurisdiction clause, the broker will be nominated as the process agent for service for all of the insurers, and so service issues are relatively uncommon in insurance disputes.

However, if the defendant cannot be served in the jurisdiction, then the permission of the English court is needed to serve proceedings on the defendant where it is domiciled out of the jurisdiction. To obtain permission, the claimant needs to satisfy the court that: (1) it has a good arguable case that one of jurisdictional 'gateways' in CPR Practice Direction 6B apply; (2) there is a serious issue to be tried; and (3) England is the forum where the case should properly be tried. The jurisdictional 'gateways' of most relevance to insurance disputes are the gateway for a claim for an injunction (which is the relevant gateway for commencing proceedings for an anti-suit injunction if one party is threatening or commences proceedings in breach of the policy's jurisdiction or arbitration clause), and the gateway for a claim made in respect of a contract that is governed by English law or contains a jurisdiction clause in favour of the English courts. In practice, where an insurance policy contains an English court jurisdiction clause, the English courts are highly likely to assert jurisdiction. Conversely, if an insurance policy contains a jurisdiction clause in favour of another jurisdiction, the English courts are likely to respect that choice and decline jurisdiction.

The English courts will also respect the parties' choice of arbitration as their chosen dispute resolution mechanism and decline jurisdiction where there is a validly incorporated arbitration clause in a policy. It is not uncommon for an insurance policy to contain both an English court jurisdiction clause and a London-seated arbitration clause. Although those clauses are on their face inconsistent, the settled approach of the English courts is to interpret the clauses as providing for disputes to be resolved by arbitration, subject only to the supervisory jurisdiction of the English court.

For all insurance policies entered into after 17 December 2009, the English courts will determine the applicable law in accordance with European Parliament and Council Regulation 593/2008 (the Rome I Regulation).

The United Kingdom's exit from the European Union is unlikely to significantly alter the position in England with respect to jurisdiction and governing law. At the time of writing, the UK government has publicly confirmed that it will implement the Rome I Regulation into English law on the United Kingdom's exit date. It has also confirmed that it intends to continue to participate in the Lugano Convention, and seek an agreement with the EU27 that will allow continued civil judicial cooperation on a reciprocal basis that reflects closely the substantive principles of the current Recast Brussels Regulation framework. The Recast Brussels Regulation is likely to continue to apply during the proposed transition period.

In addition to where the dispute will be heard, and under what law, one further issue of importance for the arbitration of international insurance disputes is which arbitrators will hear the dispute. This is a matter of choice for the parties, with a mechanism usually provided either by the arbitration clause or a set of institutional rules to determine a sole or third arbitrator in the event of disagreement. In Halliburton v. Chubb17 the Court of Appeal recently considered whether an arbitrator may accept appointment in multiple arbitrations in relation to the same subject matter but with only one common party, or whether doing so gave rise to an appearance of bias. Both Halliburton Company and Transocean Holdings LLC commenced separate arbitration proceedings against Chubb Bermuda Insurance Limited to recover losses arising out of the explosion on the Deepwater Horizon oil rig in the Gulf of Mexico. The same arbitrator was appointed to both tribunals, but the appointment in the Transocean arbitration was not disclosed to Halliburton. Under the Arbitration Act 1996, an arbitrator can be removed by the court for a lack of independence if it gives rise to justifiable doubts of impartiality. The test for whether justifiable doubts of impartiality are present is the same as the test for apparent bias in a judge in the English courts, namely whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias. The Court of Appeal held that the fact that the arbitrator would likely have knowledge from their other appointment of which one party would be unaware was of legitimate concern, but did not alone justify an inference of apparent bias from the mere fact of multiple overlapping appointments. However, non-disclosure of the parallel appointment was also a factor to be taken into account in considering apparent bias. The circumstances of and explanation for the non-disclosure will determine whether the non-disclosure justifies an inference of apparent bias. On the facts of this case, no inference of apparent bias was justified.


The Insurance Act 2015 has now come into force, but it remains to be seen precisely how its provisions will be applied. The Act potentially represents a major rebalancing of rights and obliga­tions between insureds and insurers (in favour of insureds), but early indications are that insurers are seeking to contract out of many of the provisions of the Act where possible in commercial policies.

There also remains a good deal of uncertainty as to how dam­ages for late payment of insurance claims will be approached by the courts, and the first case in which an insured claims such damages is awaited with interest.

Warranty and indemnity insurance and cyber-insurance are two of the fastest-developing policy markets in England, and the terms of both types of policy are becoming increasingly standardised. There have only been a limited number of significant disputes in relation to these types of policies, although we anticipate that to change in the next few years, especially as cyberattacks becoming an increasingly common experience for businesses.

The coming into force of the General Data Protection Regulation has also generated interest in the extent to which the risks of failing to comply with the Regulation are insurable. The position is likely to be that insurance will not be available for any fines imposed under the Regulation or under the related Data Protection Act 2018 (either because English law prohibits the insurance of fines, or because policies will specifically exclude them). However, insurance may be available for the costs of participating in an investigation by the Information Commissioner's Office and defending any subsequent proceedings. Insurance disputes arising out of data protection breaches may also be a developing area in the coming years.

The use of 'after the event' insurance to cover costs risks in English litigation has also increased significantly in recent years, both as a result of reduction in availability of legal aid at one end of the scale, and the increased importance of litigation funding in English disputes at the other end.


1 Joanna Page is a partner and Russell Butland is a senior associate at Allen & Overy LLP.

2 Lord Mansfield's celebrated judgment in Carter v. Boehm (1746) 3 Burr 1905, 96 ER 342, which established the concept of utmost good faith in English insurance law, concerned an insurance policy taken out on a fort in what is now Indonesia.

3 [2017] EWCA Civ 96.

4 Strictly, Axa concerns a reinsurance policy, but on inducement the same principles apply in insurance and reinsurance.

5 [2017] EWHC 391 (Comm).

6 [2017] EWCA Civ 4097.

7 [2016] UKSC 57.

8 [2018] EWHC 1083 (Comm).

9 [2017] UKSC 18.

10 Since at least Britton v. Royal Insurance Co (1866) 4 F&F 905.

11 [2016] UKSC 45.

12 Manifest Shipping Co Ltd v. Uni-Polari Insurance Co Ltd (The 'Star Sea') [2003] 1 AC 469.

13 [2018] EWHC 423 (QB).

14 [2018] EWHC 900 (Comm).

15 Civil Procedure Rules Rule 25.13(2)(c).

16 [2018] EWHC 1135 (Comm).

17 [2018] EWCA Civ 817.