WRBC Corporate Member Limited v AXA XL Syndicate Limited & Ors

Whether to order a preliminary issue is a case-management decision requiring the court to weigh the potential saving in time and cost against the risk of delay to the determination of the dispute as a whole. A preliminary issue is less suitable where an adverse decision may be appealed and the remaining issues cannot be fixed or tried efficiently until that appeal is resolved. The court may also consider the strength of the proposed preliminary issue and the likely extent of admissible evidence. Where the issue is highly arguable, and ordering it separately risks substantial delay without a reliable procedural means of avoiding that delay, the safer course may be to fix one trial of all issues.

The claimant sought indemnity under two multi-line excess of loss reinsurance treaties for contingency losses arising from the cancellation or postponement of insured events during the Covid-19 period. The defendants accepted that the losses fell within the treaties but disputed the further indemnity claimed.

The defendants applied for the contractual construction issue concerning the effect of the contingency event definition to be tried as a preliminary issue. That issue could potentially dispose of the claim. If it did not, the court would still have to determine the measures issue, including whether governmental measures constituted aggregating events and caused the losses. The central question was whether a separate preliminary trial would promote the quickest and most efficient resolution of the proceedings.

1. Application refused. The court declined to order a preliminary trial of the contingency event definition issue and directed that all issues be tried together in a ten-day hearing in January 2026, with one day of judicial pre-reading.
2. Although the construction issue was potentially determinative, the claimant’s textual and contextual arguments did not require substantial witness evidence. Any relevant and admissible factual-matrix evidence was likely to be limited and predominantly documentary. Post-contractual losses could not be used to construe the treaties.
3. The decisive case-management consideration was the risk of delay. If the defendants lost the preliminary issue, the measures issue would remain. A trial date for that issue could not be fixed until after determination of the preliminary issue and any appeal. There was no guarantee that an appeal would be expedited, so fixing a later stage-two hearing would not reliably cure the problem.
4. The court considered the preliminary issue highly arguable from the claimant’s perspective. Had the defendants’ case been extremely strong, a separate trial might have been justified because it would probably dispose of the whole claim. In the circumstances, however, the risk of delay outweighed the prospective procedural advantages.
5. Counsel availability was not a proper driver of the decision on a pure question of contractual construction. The order made was regarded as the safest and most sensible course for resolving all issues as quickly as possible.