Excess Isurer v Primary Insurer

Its a supreme Court of Missouri case, so the usual disclaimer applies.

The case of Scottsdale Ins Co. v Addison Ins Co et al is an interesting Insurance case.

The matter arose out of a very tragic road traffic accident resulting in the death of a driver, whose family sued for damages.

The Primary Insurer insured to a $1,000,000 limit. The excess insurer insured to a $2,000,000 limit.

A demand was made by the deceased’s family to settle the cast for $1,000,000. The primary insurer refused. It was a costly refusal. The Primary insurer later settled the case for $2,000,000. The excess insurer (Scottsdale) issued proceedings on the principle of equitable subrogation as a basis for an excess insurer to recover from a primary insurer’s wrongful refusal to settle a claim.

The Supreme Court of Missouri upheld the Court of Appeals decision to reverse the trial Judge’s judgement in favour of the Primary Insurer, recognising that the excess insurer could recover in equitable subrogation for the failure of the Primary Insurer.

Here is a report on the case

Northern Ireland High Court finds drunk pedestrian 60% liable for injuries

In the case of McCaughey v Mullan, Mr Justice O’Hara found that although the pedestrian was drunk and presented a danger to herself on the road, that despite the fact that the Defendant driver was not speeding, he had driven at a speed which was too fast and did not allow him to stop within the distance he could see ahead.

The Defendant sought to argue that the Plaintiff was guilty of contributory negligence to a large extent (90%), while the Plaintiff’s representatives accepted that the Plaintiff contributed greatly to the accident by being drunk in the middle of or on the Defendants side of the road at night, they argued that the extent of that contribution could not exceed 50%.

There was much emphasis upon The Highway Code and in particular Rule 126 which states:

“Stopping Distances

Drive at a speed that will allow you to stop well within the distance you can see to be clear”

Further

Article 51(6) of the Road Traffic (NI) Order 1995 provides:

“A failure on the part of any person to observe any provision of the Highway Code shall not of itself render that person liable to criminal proceedings of any kind, but any such failure may in any proceedings (whether civil or criminal, and including proceedings for an offence under the Road Traffic Orders) be relied upon by any party to the proceedings as tending to establish or to negative any liability which is in question in those proceedings.”

The Defence sought to persuade the court that drivers cannot be asked to strictly adhere to the provisions of The Highway Code. The Judge rejected the argument finding “The fact that this honest sober driver was unable to stop leads me to conclude that he was driving too fast – otherwise it is probable that he would have been able to stop within the distance he could see to be clear.”

The Court considered the issue of the Plaintiff’s contributory negligence, referring to the Judgement of Denning LJ in Froom v Butcher [1975] 3 All ER 520. Denning LJ said

“Negligence is a man’s carelessness in breach of duty to others. Contributory negligence is a man’s carelessness in looking after his own safety. He is guilty of contributory negligence if he ought reasonably to have foreseen that, if he did not act as a reasonable prudent man, he might be hurt himself.”

The court acknowledged that until 1948 a plaintiff who was guilty of contributory negligence was disentitled from recovering anything if his own negligence was one of the substantial causes of the injury. That was changed in Northern Ireland by section (2) 1 of the Law Reform (Miscellaneous Provisions) Act (NI) 1948 which provides:

“Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage…”

The Court held that in the instant case the Plaintiff was a road user who failed to look after her own safety, and for those reasons reduced her damages by 60%.

Read Full Case Here

Damian McGeady, Partner