21. Juli 2020
Disputes Quick Read – 79 von 88 Insights
Disputes Quick Read: The contra proferentem rule reconsidered?
A consideration of arguments on the principles of contractual construction in the FCA test case on business interruption insurance.
Like many industries across the country, we are closely following the FCA's novel test case seeking clarity on business interruption insurance during the coronavirus crisis. The 10-day trial starts in the High Court on 20 July. Businesses – particularly SME policyholders, who the FCA is taking a strong stance in favour of in the case – may stand or fall depending on the case's outcome.
Although this case relates to insurance policies, what the Court is essentially carrying out is an exercise in contractual construction, clarifying the objective meaning of the wording of the policies in question. The Court has clear guidance from the Supreme Court on this issue – most recently in Wood v Capita Insurance Services Ltd [2017] UKSC 24, [2017] AC 1173 – and, as the FCA comments in its 300+ page skeleton argument for the hearing, the general principles of contractual construction "are unlikely to be controversial".
While this appears to be so for the most part, differences between the parties on this issue have inevitably arisen, and the Court's approach is likely to have wider application beyond cases concerning the interpretation of insurance policies.
One such issue the Court might need to resolve is the role of the longstanding doctrine of contra proferentem. Understandably, the FCA seeks to rely on this rule, which they say requires the Court to apply a construction in favour of the insured where there is ambiguity about the construction of the policies.
The insurers have questioned the utility of the doctrine. They argue it is "out of step" with the principles of contractual interpretation and consider it "instructive" that the principle has not been mentioned in any of the recent Supreme Court decisions on contractual construction.
However, the insurers' attempt to do away with the doctrine seems ambitious to us. Their suggestion that the principle is, at most, a port of last resort, seems to be common ground – but it does not mean the doctrine has no place in the Court's consideration at all.
Given the test case concerns standard "off the shelf" policies, primarily for "unsophisticated" SMEs, the Court might look to the doctrine of contra proferentem if it is unable to resolve ambiguities in the policies. The insurers' argument that the policyholders were commercial parties who entered into the policies largely on the advice of brokers in a competitive insurance market seems unlikely to ring true with most of the SME policyholders affected by this case.
It therefore seems unlikely that the insurers' efforts to do away with this doctrine will be successful, and ambiguous clauses will continue to be construed against the party who proposed or drafted them. That said, the Court will be careful not to construe the wordings so strictly that it defies all business common sense.
In dieser Serie
New SFO Director announces bold plans to tackle fraud
21. March 2024
von mehreren Autoren
What are the litigation trends for 2024?
1. February 2024
von Katie Chandler, Emma Allen
ClientEarth v FCA: Challenging Regulator Decisions
12. February 2024
von Tim Strong, Nicole Baldev
First of its kind judicial guidance on the use of AI in the courts
14. December 2023
Witness familiarisation - does it affect the court's assessment of witness credibility?
13. December 2023
The use of AI in Trial Witness Statements post-PD 57AC
23. October 2023
von mehreren Autoren
CAT to hear the first application for a collective settlement approval order
17. October 2023
Failure to prevent fraud – a new offence?
14. August 2023
von mehreren Autoren
Supreme Court rules that APP fraud victims cannot rely on Quincecare Duty
4. August 2023
von mehreren Autoren
The Law Commission's Consultation Process on the Arbitration Act 1996 – taking stock
21. July 2023
What does the latest decision of the CAT in the Mastercard/Visa proceedings mean for class actions?
10. July 2023
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
1. June 2023
von mehreren Autoren
Disputes Quick Read – developments in the fixed costs regime
3. May 2023
von James Bryden
Disputes Quick Read: Service by email – are the rules any clearer?
20. April 2023
von James Bryden
Disputes Quick Read - What do practitioners think about making alternative dispute resolution (ADR) compulsory?
8. March 2023
Disputes Quick Read: What are the litigation trends for 2023?
2. March 2023
von Katie Chandler, Emma Allen
Disputes Quick Read: further guidance on witness statement preparation rules
14. February 2023
Disputes Quick Read: A cautionary tale – settlement agreement (un)wittingly releases all claims for fraud
13. February 2023
Disputes Quick Read: Why the UK should join the Hague Judgments Convention 2019
8. February 2023
von Jessie Prynne
Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
19. January 2023
Disputes Quick Read: A new approach to giving evidence? WhatsApp with that?
3. October 2022
von Gemma Broughall
Disputes Quick Read: Ethereum Merge - what legal issues arise?
22. September 2022
von Ben Jones, Emma Allen
Disputes Quick Read: New obligations on cryptobusinesses to report under the UK sanctions regime
9. August 2022
von Nick Maday
Disputes Quick Read: Disclosure - What information can be redacted?
25. July 2022
von Edward Spencer
Disputes Quick Read: what claims exist when a smart contract is breached?
6. July 2022
von Emma Allen
Disputes Quick Read: New gateway for serving Norwich Pharmacal Orders and Bankers Trust orders out of the jurisdiction
Welcome news for those pursuing fraud claims in the English Courts
28. July 2022
Disputes Quick Read: Disclosure Pilot Scheme – here to stay
21. July 2022
von Edward Spencer
Disputes Quick Read: Defining the duty - the limits of the responsibility assumed by professionals
27. July 2022
von Stuart Broom
Disputes Quick Read: Climate change litigation – successful challenge to government's Net Zero Strategy
29. July 2022
Disputes Quick Read: Judicial Review and Courts Act 2022 – now in force
17. June 2022
von Stephanie High
Disputes Quick Read: an important reminder of the duty to disclose electronic documents in native format
13. June 2022
von Edward Spencer
Disputes Quick Read: ENRC prevails in claim against former solicitor
26. May 2022
Disputes Quick Read: Climate change litigation update – McGaughey v Universities Superannuation Scheme Limited
31. May 2022
von mehreren Autoren
Don't lose your keys: Bitcoin developers do not have a duty to assist owners in recovering lost cryptocurrency
4. April 2022
Disputes Quick Read: The new witness statement preparation rules – a year on
5. April 2022
von Stephanie High
Disputes Quick Read: ClientEarth v Shell – climate change litigation shifts focus to UK companies
31. March 2022
von mehreren Autoren
Disputes Quick Read: High Court rules that failure to provide adequate data security is not a positive act
21. September 2021
von mehreren Autoren
Disputes Quick Read: Key changes to the Disclosure Pilot Scheme
13. September 2021
von Edward Spencer
Disputes Quick Read: Judicial Review and Courts Bill – unpacking the UK government's proposed amendments
6. September 2021
von Stephanie High
Disputes Quick Read: Will litigants be compelled to participate in alternative dispute resolution?
2. August 2021
Disputes Quick Read: Freezing injunctions – maximum custodial sentence imposed for breach
21. July 2021
Disputes Quick Read: The online future of civil justice – the end of the legal profession or the end of legal drudgery?
15. July 2021
von Jessica Thomas
Disputes Quick Read: Will the courts change forever post-COVID?
26. May 2021
von David de Ferrars
Disputes Quick Read: One Blackfriars administrators cleared of misfeasance
5. May 2021
von Stephen O'Grady
Disputes Quick Read: Not your prerogative – the Independent Review of Administrative Law reports its recommendations on judicial review
21. April 2021
von Stephanie High
Disputes Quick Read: Amendments to the Disclosure Pilot Scheme – a step in the right direction
31. March 2021
Disputes Quick Read: UK Supreme Court rules on the territorial extent of the SFO's powers
26. February 2021
von Tim Strong, Akash Jamang
Disputes Quick Read: No dropping anchor – parent company liability for environmental claims
24. February 2021
Disputes Quick Read: What lawyers need to know about new witness statement preparation rules
20. January 2021
von Stephanie High
Disputes Quick Read: Should you still choose the English courts to have jurisdiction in your international contracts after Brexit?
12. January 2021
von Tim Strong
Disputes Quick Read: Privilege lost in the EU post-Brexit (with exceptions)
23. November 2020
Disputes Quick Read: Law on interest applicable to US dollar awards reaffirmed
16. October 2020
Disputes Quick Read: Care required when drafting SPA claim notices
23. September 2020
von mehreren Autoren
Disputes Quick Read: Why the modernised LCIA rules are a welcome update
7. October 2020
von Nick Storrs
Disputes Quick Read: The importance of proper service
26. May 2020
von Edward Spencer
Disputes Quick Read: government guidance for contracts impacted by COVID-19
12. May 2020
Disputes quick read: Mandatory changes to Statements of Truth
18. May 2020
von Katie Chandler
Disputes Quick Read: COVID-19 and supply chain disruption – key issues
9. April 2020
von mehreren Autoren
Disputes Quick Read: High Court orders parties to explore options for 5-week remote trial
15. April 2020
Disputes Quick Read: Tomlin Orders – ensuring the confidentiality of settlement terms
27. April 2020
von mehreren Autoren
Disputes Quick Read: UK's OFSI fines Standard Chartered Bank £20 million for sanctions breaches
21. April 2020
von Stephanie High
Disputes Quick Read: A different approach to witness evidence
11. March 2020
von James Bryden
Disputes Quick Read: Coronavirus - a growth in virtual courts?
17. March 2020
von Stuart Broom
Disputes Quick Read: Embracing remote hearings – the experience to date
26. March 2020
von mehreren Autoren
Disputes quick read: climate change activism by litigation
26. February 2020
von Tim Strong, Andrew Howell
Disputes Quick Read: Commercial Court's arbitral power shift
21. February 2020
von Andrew Howell
Disputes Quick Read: Court stays evictions during COVID-19 – is this lawful?
2. June 2020
von Georgina Jones
Disputes Quick Read: Will the civil justice system change forever post COVID-19?
16. June 2020
von Georgina Jones
Disputes Quick Read: Privilege waiver warning
2. July 2020
von Tim Strong, Georgina Jones
Disputes Quick Read: Retailers reign supreme in Visa and Mastercard proceedings
9. July 2020
Disputes Quick Read: The contra proferentem rule reconsidered?
21. July 2020
Disputes Quick Read: Scope of duty and the SAAMCo counterfactual following Manchester Building Society
3. December 2021
Disputes Quick Read: Facilitating transactions in cryptoassets - Lord Leggatt and the point of commercial law
24. November 2021
von Stuart Broom
Disputes Quick Read: Privy Council clarifies the law on freezing injunctions in aid of foreign proceedings
8. October 2021
von Katie Chandler
Disputes Quick Read: Climate change litigation – what's the latest?
10. January 2022
von Tim Strong, Jessica Thomas
Disputes Quick Read: Court decisions on the Disclosure Pilot Scheme – the 2021 roundup
20. January 2022
Disputes Quick Read: Assumption of responsibility - tax schemes and investors
22. March 2022
Disputes Quick Read: Dealing in crypto? Be careful what you call it
7. April 2022
von mehreren Autoren
Related Insights
What are the litigation trends for 2024?
von Katie Chandler und Emma Allen
Automotive update – driving ahead into 2024
Part 2 of 2
von mehreren Autoren
Product liability & product safety – a round up of 2023
Our international team looks at 2023 developments across the EU and the UK.
von mehreren Autoren