Great North Eastern Railway Ltd v JLT Corporate Risks Ltd

A claim against an insurance broker is not necessarily time-barred when the alleged breach includes a continuing post-placement duty. Whether such a duty existed, and whether it was breached, may require expert evidence and trial. A later claim against a different defendant is not automatically an abuse merely because related losses were assessed in earlier proceedings. Collateral attack and Henderson abuse are fact-sensitive applications of the court’s process jurisdiction. The court must ask whether, in all the circumstances, the later proceedings misuse the process, cause manifest unfairness, or bring the administration of justice into disrepute.

GNER claimed damages from its insurance broker, JLT, alleging that JLT had failed to obtain insurance with the narrower exclusion requested by GNER and had incorrectly represented that such cover had been obtained. JLT applied for summary judgment or strike-out, contending that the claims were statute-barred and that claims for uninsured losses were extinguished by, or constituted a collateral attack on, the judgment obtained by GNER against Railcare following the derailment.

The court had to determine whether the limitation issue could be summarily resolved and whether the proposed claims were barred by estoppel or constituted an abuse of process.

1. Limitation and continuing duty. The issue whether JLT owed continuing contractual or tortious duties after placement, including duties to obtain an agreed wording and warn GNER of the absence of the required cover, could not properly be determined summarily. Expert evidence concerning the relevant practice of insurance brokers was likely to assist. The existence and breach of any continuing duty, and related causation issues, therefore required trial.
2. Extinction and estoppel. GNER’s claim against JLT was based on a different defendant and a different legal basis from its claim against Railcare. Railcare’s admitted negligence concerned damages recoverable in tort for the derailment. The present claim concerned loss resulting from JLT’s failure to procure the insurance indemnity. JLT and Railcare were not concurrent tortfeasors liable for the same damage. No cause of action estoppel or issue estoppel prevented the claim.
3. Collateral attack and abuse. Applying the principles stated in Johnson v Gore Wood & Co. (A Firm) [2002] 2 AC 1 and Secretary of State for Trade and Industry v Bairstow [2004] Ch 1, the question was whether the later proceedings were abusive in all the circumstances. GNER had not unjustly harassed JLT, and permitting the claims would neither be manifestly unfair nor bring the administration of justice into disrepute.
4. The claim for losses during period 9 was not barred merely because that period had not been claimed against Railcare. The earlier judgment had not determined the separate question of the indemnity available under the intended insurance policy. Similarly, the recoverability of Interfleet costs under the increased cost of working provision was not determined on the interlocutory application.
5. The applications were dismissed. Subject to any later order, JLT was ordered to pay GNER’s costs of the applications.