Nicole Marlene Riedweg v HCC International Insurance Plc & Anor

For the purposes of contribution, liability for the same damage requires more than a common underlying loss. The relevant question is whether the parties are liable to the same person for the same damage, with the facts analysed precisely rather than impressionistically.

An insurer proceeding under the Third Parties (Rights Against Insurers) Act 2010 is liable under its insurance obligations to indemnify the insured against liability to the third party. It does not thereby become liable for damage caused by the insured. A direct-action mechanism under the 2010 Act does not give the insurer the insured’s right to seek contribution under section 1 of the Civil Liability (Contribution) Act 1978.

The claimant brought a professional-negligence claim against HCC International Insurance plc under the Third Parties (Rights Against Insurers) Act 2010, alleging that Goldplaza Berkeley Square Ltd had negligently overvalued property which she agreed to purchase. Goldplaza was in members’ voluntary liquidation.

HCC sought permission to bring a Part 20 contribution claim against the claimant’s former solicitors and an individual adviser. HCC alleged that their breaches of duty caused the same financial loss as that allegedly caused by Goldplaza. The preliminary issue was whether HCC was potentially liable in respect of the same damage as the proposed Part 20 defendants for the purposes of section 1 of the Civil Liability (Contribution) Act 1978.

1. Application dismissed. HCC was not potentially liable in respect of the same damage as that for which Forsters LLP or Ms Johns might be liable.
2. Section 1(1) of the Civil Liability (Contribution) Act 1978 requires a precise comparison of the damage for which each proposed contributor is liable. The fact that different defendants’ damages may relate to the same underlying loss does not establish the statutory requirement.
3. The relevant analysis is whether the claimant suffered damage, whether the first party is liable to her in respect of that damage, and whether the proposed contributor is also liable to her in respect of that damage or part of it. The mutual-discharge approach in Howkins & Harrison v Tyler is a practical aid, rather than a rigid threshold test; the statutory wording remains decisive.
4. Under the scheme of the Third Parties (Rights Against Insurers) Act 2010, the claimant may enforce against the insurer rights transferred from the insured. The insurer may defend the insured’s liability and coverage, but remains liable only under its contractual obligation to indemnify the insured. It does not become liable to the claimant for damage caused by the insured.
5. The reasoning in Bovis Construction Ltd v Commercial Union Assurance Co Ltd, approved in Royal Brompton Hospital NHS Trust v Hammond, applied. An insurer does not inflict the underlying professional or physical damage; any damage caused by refusal to meet policy obligations would be damage to the insured and would be conceptually distinct.
6. The possibility of future subrogation did not alter whether HCC was presently liable for the same damage. The issue was a pure point of law suitable for determination at the interim stage.

This was a first-instance application for permission to issue an additional Part 20 claim. The matter had previously been addressed at a costs and case management conference, which was adjourned, and further directions were given before the hearing. The application was dismissed by the High Court.