Hannah Archer v R ‘N’ F Catering Limited & Anor

Under the Third Parties (Rights against Insurers) Act 2010, transferred rights remain subject to defences available to the insurer against the insured, subject only to the limited exceptions in section 9. Section 9(2) treats a third party’s acts as acts of the insured only if those acts would have fulfilled the contractual condition when performed by the insured, including compliance with contractual time limits. It does not revive an indemnity already lost by the insured’s breach of conditions precedent. Where an insured fails to notify a claim as soon as reasonably possible, or fails to provide requested information within the stipulated period, the insurer may rely on that breach without proving prejudice. A later winding-up does not enable the third party to obtain greater rights than those held by the insured.

The claimant alleged that she suffered serious personal injury after consuming food at the first defendant’s restaurant. The first defendant held an insurance policy with ArgoGlobal SE, whose successor in title was the second defendant. After the first defendant entered members’ voluntary liquidation, the claimant pursued the second defendant under the Third Parties (Rights against Insurers) Act 2010.

The preliminary issues were whether the first defendant had lost its entitlement to indemnity by breaching policy conditions precedent, and whether section 9(2) of the Act treated the claimant’s later acts as compliance by the first defendant. The claimant abandoned reliance on sections 9(3), 9(4) and estoppel.

1. The preliminary issue was determined in favour of the second defendant. The first defendant had breached conditions precedent requiring notification as soon as reasonably possible, provision of full details and information within specified periods, reasonable precautions, and cooperation. The second defendant was therefore entitled to refuse indemnity, and the claim against it was to be dismissed.
2. Conditions precedent must be construed fairly so as to give effect to their purpose, while protecting the insured from obscure or ambiguous wording. An insurer relying on such a condition need not establish prejudice: Pilkington v CGU Insurance plc [2004] 1 CLC 1059.
3. The correspondence received by the first defendant constituted circumstances giving rise to a real, rather than fanciful, risk of a claim. The first defendant did not notify the insurer until 17 November 2020. Delays of approximately 12 months, 10 months, six months and 18 days were not notification as soon as reasonably possible: Arch v McCulloch [2021] EWHC 2798; Aspen Insurance UK Ltd v Pectel Ltd [2009] Lloyd’s Rep. IR 440.
4. The first defendant also failed to provide requested information within 30 days. Its explanation that emails had entered a spam folder was not supported by cogent evidence. A business should maintain procedures for monitoring important communications.
5. Section 2(4) of the Third Parties (Rights against Insurers) Act 2010 preserved the insurer’s defences. Section 9(2) did not assist the claimant. Her acts after 14 February 2023, when the first defendant became a relevant person, were too late to satisfy conditions requiring earlier notification and information. Section 9(2) mirrors the insured’s contractual obligation; it does not create different or more generous time limits for the third party.
6. Horne v The Prudential Assurance Co Ltd 1997 SLT (Sh Ct) 75 was distinguishable. It concerned impossibility because the insured had already been wound up when notification became relevant. Here, the first defendant was trading and able to comply when the relevant circumstances arose.

The second defendant was not potentially liable to the claimant on proof of the first defendant’s liability.