Sargent v GRE (UK) Limited

An unclear term in a commercial insurance policy should be construed by considering the policy as a whole, its context, scheme, surrounding circumstances and purpose. The court should not isolate a word such as “any” or import meanings from unrelated legal contexts. In cover for permanent total disablement from attending to “any occupation”, the phrase may be limited by context to the insured’s relevant occupation, including the occupation followed when the injury occurred. The insured need not be unable to perform every possible occupation, and alternative employment is irrelevant unless the policy expressly makes it relevant.

Mr Sargent held a personal accident policy taken out while he was serving in the Royal Corps of Transport. After leaving the Forces, he suffered an injury which resulted in the amputation of his right index finger. He could no longer work as a dry line jointer, although he could undertake some labouring work and drive heavy goods vehicles.

The insurer accepted liability for the scheduled finger-loss benefit but denied the larger permanent-disablement benefit. The Haverfordwest County Court dismissed his claim, construing “any occupation” as every occupation. The appeal concerned whether the policy required permanent inability to perform all occupations or only the occupation being followed when the accident occurred.

Disposition. The appeal was allowed. Lord Justice Mummery delivered the leading judgment, with Lord Justice Thorpe agreeing. Lord Justice Leggatt concurred in the result on separate reasoning.

1. The construction of an unclear commercial insurance policy requires a broad consideration of the policy as a whole, its context, scheme and surrounding circumstances, so as to identify the object and purpose of the relevant provisions. A purely linguistic or dictionary-based approach to “any occupation” was insufficient. The court should not add words such as “at all” or substitute “every” for “any”.
2. The policy distinguished between item 6, which covered a member of HM Forces disabled from following his own or an alternative occupation in HM Forces, and item 7, which applied to a person who was not a member of HM Forces. Item 7 contained no reference to alternative occupation. Its reference to “any occupation” was circumscribed by context and meant any relevant occupation outside HM Forces.
3. Mr Sargent was permanently disabled from attending to the occupation he followed when injured, namely that of dry line jointer. His ability to perform other work did not prevent recovery under item 7. The authorities cited on the meaning of “any” in other contractual or legislative contexts, including Re Janet Mary Fowles Deceased [1968] Queensland Law Reporter 109, Sherwood v Cox [1945] 1 KB 549 and Pocock v Century Insurance Co Ltd [1960] 2 Lloyd's List Rep 150, did not resolve the construction of this differently structured policy.
4. Lord Justice Leggatt considered that “any occupation” covered the particular occupation being followed at the accident date. Alternatively, if the wording remained ambiguous between that meaning and inability to perform every occupation, the contra proferentem rule would make the insurers liable.

The agreed consequence was payment of £10,000, without the additional £750 under item 9. The order was appeal allowed with costs, subject to legal aid taxation of the appellant’s costs. Leave to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division) — [1997] EWCA Civ 1414, 16 April 1997: appeal allowed.
• Haverfordwest County Court — on 5 September 1995, His Honour Judge Michael Evans QC dismissed the claim for the £10,000 permanent-disablement benefit.