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The recent High Court judgment 15 September 2020 in the UK test case of The Financial Market Authority v Arch Insurance (UK) Ltd & ors [2020] EWHC 2448 (Comm) is all bad for insurers of business interruption insurance claims in NZ.  It says that disease extensions provide cover as do some Government authority extensions, but most importantly it says that the case of Orient-Express Hotels Limited -v- Assicurazioni Generali S.p.A. [2010] EWHC 1186 (Comm) that insurers rely on to limit liability is wrong. FCA is the regulator of the insurers in the UK.  It brought a test case on various specimen wordings by underwriters of business interruption insurance arising in […]

The Practice Note Number 2 is more stupidity from the Canterbury Earthquake Tribunal. It purports to be about Covid 19 effects, but goes further than that. https://www.justice.govt.nz/assets/Documents/Publications/CEIT-practice-note-2-2020.pdf It says that the Tribunal will not decide about compliance with the Building Code. Courts decide this issue all the time. Hearings will not be adjourned if a lawyer cannot attend for Covid travel reasons.  It wants to force parties to have Christchurch lawyers.  The Tribunal can resolve legal and factual issues on the papers. Parties can be ordered to attend settlement conferences by video link conducted by a Tribunal member. After the settlement conference the Tribunal can convene a hearing on paper […]

Business interruption insurance policies usually contemplate the loss of premises by physical damage.  Typically, the Covid 19 pandemic does not physically damage premises, however, the loss of uses of premises is arguably “physical damage”.  In a decision released 30 March 2020 the Ontario Supreme Court in MDS Inc & anor v Factory Mutual Insurance Company, 2020 ONSC 1924  decided that loss of use or function of premises could be “physical damage” for the purposes of the insurance policy.  To interpret “physical damage” as requiring tangible damage was inconsistent with the purpose of the insurance policy.  The case involves the pre-emptive shut down of a nuclear reactor with a heavy water […]

In its first substantive judgment in Houston v Southern Response Earthquake Services CEI-OOXX-2019 the Canterbury Earthquakes Insurance Tribunal has shown that it will be a waste of time and money for homeowners.  The decision by the chairperson of the tribunal, a former family court judge, CP Somerville, fails to follow an applicable Court of Appeal case about the policy standard of remediation and does not decide any super-structure repair scope or whether the insurer strategy complies with the Building code.  Mr Somerville surprisingly approves a jack/pack repair for a house with a heavy roof and heavy cladding on TC3 land adjacent to a stream with a floor level differential of […]

In Bruce & ors v IAG New Zealand Ltd [2019] NZCA 590 the Court of Appeal allowed the homeowners’ appeal and dismissed the IAG cross appeal in a case about IAG’s post earthquake remedial work.  IAG elected to repair the house and spent $1.4M doing so.  IAG’s engaged builder, Jim the Builder, did not repair the house so that it was “as when new”.  At issue at trial were the floor levels, wall verticality and internal finishes.  The High Court Judge, Mallon J, found that IAG had not restored to the three items to the policy standard, but puported to limit the remedy available to the homeowners.  The Court of […]