10 Essential Cases for the Armoury of an Insurance Litigator

Insurance

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DATE PUBLISHED: December 21, 2021

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We're taking you back in time today by having a look at the ten essential cases insurance litigators should know. These cases have helped shape the courtroom's that we know today, and it's time to brush up on your knowledge.

1

Groom V Crocker [1939] 1 KB 194

This first case goes back to the King's bench in 1939. It covers its authority for the proposition in that when you act for an insurance company, you acquire two clients - both the insurer but also the insured - and you owe a duty to protect the interests of both.

This means that you must tread very carefully in cases where indemnity is yet to be granted. It's something you'll be very conscious of in those early phases of acting for the parties, and you can't put any one of those parties' interests above the other. This is important to be mindful of when you're starting out.

2

Wheat v E Lacon & Co Ltd [1966] AC 552

This is an interesting case. Again, going back to 1966 of Wheat and Lacon and its authority for the proposition, and it's from Lord Denning that more than one person can be an occupier of premises at law.

It's a degree of control exercised over the area in question. So, the duty to take reasonable care can extend just beyond the owner of a particular premises. It can extend to a person, a builder who comes on and occupies the premises, a licensee, or someone leasing those premises. It all comes down to the question of control and attempts to exclude others.

3

LUXTON V VINES [1952] HCA 19

This case is from the 1950s - a High Court decision all about drawing inferences.

In the civil jurisdiction, we have the standard of proof being balanced for probabilities, as opposed to the criminal standard of proof, which is beyond reasonable doubt. In the civil context, you don't need to be able to prove things happened beyond reasonable doubt. You don't even need to be able to prove that something actually happened. The Court will draw an inference from the available evidence that something probably occurred.

To draw such an inference, the Court must be satisfied that what is being contended for is the more probable scenario on the available evidence. Now, where the Court won't draw an inference is where choosing between two competing scenarios or hypotheses is to encourage the court to engage in pure speculation or conjecture.


If you have three possibilities, one of those has to be elevated to the level of probability, or the plaintiff won't prove their case. If the Court is left to guess between three or four different scenarios and they can't - there's not enough evidence for them to come to the conclusion that one's more probable than the other, and the case will fail. But, if one can be elevated to simply beyond a possibility to a probability, the Court can find, in a civil jurisdiction, that's what occurred as a matter of fact by this process of inferential reasoning.

4

JONES V DUNKEL (1959) 101 CLR 298

This one is a 1950s case again from the High Court. This is the case that established the rule that if a party doesn't call a witness who can give evidence in a matter and dispute, then the failure to call them allows the Court to infer that the evidence that that person would give would not have assisted the party that failed to call them.

This is a very useful submission, but it's subject to three preconditions:

  • The missing witness would be expected to be called by one party rather than the other. This is sometimes referred to as being in a camp of a particular party or not available to the other. Remember, there's a general principle that there's no property in a witness.
  • Their evidence would probably elucidate a particular matter. So, their evidence is going to be relevant, and there's a question mark over why they're not there to explain a certain situation.
  • Their absence is unexplained. It's only when the witness is identified with precision and shown to have knowledge by the party seeking to have the inference drawn, but the onus then shifts to the opposing party to explain their absence.


This is useful if you would expect the witness to be called. You can submit to the court, but the failure to call that witness means that the Court should infer that their evidence wouldn't have helped that party. Something to bear in mind if you're running a trial

5

Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37

This case is relevant in the personal injury sphere and its authority for the proposition that if you personally injure someone, it's to be expected that they will seek medical treatment. But, that medical treatment won't always be a hundred per cent successful, and it may even sometimes be negligent.

However, only grossly negligent medical treatment or advice that exacerbates the underlying condition is sufficient to break the chain of causation. If you injure someone through your negligence, the fact that they might not get the best medical outcome is not a discounting factor or something that you can try to attribute to the doctor or the hospital. It's, in fact, something that you'll be held responsible for.

The rationale behind this is that some degree of medical misadventure is a foreseeable consequence of negligence. Even if you can prove the treating doctor was at fault, this won't be a complete defence unless the doctor's conduct can be described as, to use the Court's words, “inexcusably bad or grossly negligent”.

This is a very difficult threshold to meet, and we've drawn in several liabilities still applying in personal injury actions in Australia. It is the defendant's evidential issue, not the plaintiff’s. Again, something to bear in mind when you have a poor outcome for medical treatment in one of your cases.

6

Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 49

This case is very useful when you're looking at issues of apportionment or contribution to negligence.

Here, the Court said that arriving at just an equitable apportionment between the plaintiff and the defendant - or indeed the defendants themselves - of the responsibility for damage involves a comparison of two things:

  • Culpability. The court describes this as the degree of departure from the standard of care of the reasonable person.
  • Relative importance of the acts of each party in causing the damage. Weighing those two is how you arrive at a percentage of apportionment between, say, two defendants that are jointly liable to a plaintiff.


It's also relevant, of course, to assessing the contribution negligence of the plaintiff. While on the topic of contribution negligence, it's also good to remember that the comparison is between the plaintiff's fault on the one hand and the combined fault of the defendants viewed as a unit on the other. The comparison is not of the culpability of the plaintiff and the defendant individually - that's a case called Barisic v Devenport.

 
Podrebersek is the go-to guide for measuring apportionment between tort fees or contributory negligence, and it's useful just to have those two tiers in mind when you're looking at apportioning matters in your cases.

7

The Secretary of State vs The Bank Of India Limited (1938) 40 BOMLR 868

This is an obscure decision, but again, one that can be useful in this context of joint tort fees or apportionment.

What do you do if your client accidentally committed a tort because they were misled by a third party to believe that what they were doing wasn't tortious?
This case is authority for the proposition that when one person does an act at the request of another, which act in itself is not manifestly tortious to the knowledge of the person doing it, and such act turns out to be injurious to the rights of the third party.

The person doing it is entitled to an indemnity from him, who requested that it should be done. This principle is said to be based on a contract implied by law - the request - importing a promise to identify the other party against the consequences to him of acting upon this request.
Bring this one up the next time you're having a fight over joint tort fees contribution, particularly in the context of Section 6 C of the Law Reform Act.

For example, there was some steel on the side of the road, and Company X told Company Y, "That's ours. Can you go and chop it up and bring it to another location?" Company Y did so on the basis that they believed what they were told. However, it turns out that Company X didn't actually own the steel, meaning that Company Y had actually committed the tort of conversion. They were unaware of this and were entitled to seek indemnity from the party who sent them out in the first place. So, it can be useful in that sort of context.

8

Maxwell v Highway Hauliers Pty Ltd [2014] HCA 33

This serves as a more recent decision of the High Court dealing with the complex issue of Section 54 of the Insurance Contracts Act and how that operates.

What the Court always tries to do in these cases is strike a balance between disallowing insurers to arbitrarily rely on policy conditions that bear no relationship to the loss claimed. But not at the same time enlarging the scope of cover, but beyond what the contracting parties intended. This case is a real reminder that the Insurance Contracts Act is a pro-insured piece of legislation.

The Court said here that the making of a claim under an occurrence policy requires that indemnity sought ought to be in relation to an event that occurred during the period of cover. But otherwise, it is simply the making of the claim under the policy that will invoke the potential operation of Section 54 subparagraph one.

The Court said it doesn't matter if the trigger to deny cover in the policy is dressed up as an obligation of the insured - it's described as a continuing warranty, a limitation on the defined risk, or a temporal exclusion.

The question posed by Section 54 is simply whether that trigger could be properly characterized as an act or an omission that occurred after the contract of insurance was entered into. If so, unless the act or omission either caused the loss or prejudiced the insurer's position, the insurer cannot rely on that act or omission to refuse to pay the claim.

It doesn't matter how it's dressed up. If you fall within the meaning of those words, you're only entitled to disallow the claim to the extent of your prejudice. Or if you can prove you wouldn't have written the policy at all.

9

Browne v Dunn (1893) 6 R 67

This next case is an interesting case in the trial context, specifically when you're dealing with a cross-examination of a witness, including a plaintiff. If you're going to put forward a version of events at trial that is inconsistent with the claimant's account or the plaintiff's account, then your alternative account should be put to the plaintiff in cross-examination, so they have the opportunity to respond to it.


For example, you might say, "I put it to you that you weren't in the car at that time." Or, "I put it to you that you already had a pre-existing neck condition." If you're going to call evidence about that later on, the plaintiff should be given the opportunity to respond to that while they're in the witness box. If you don't do that, you run the risk of evidence you later want to bring in being excluded by the court.

This is an important thing to remember in that trial context. And again, it can be useful. It can be a useful strategy at a conference as well.

10

Toll (FGCT) Pty Ltd-v-Alphapharm Pty Ltd [2004] HCA 52

The final case discussed today is the High Court’s decision in Toll and Alphapharm.

You'll see the contract and contractual indemnities arising more and more in claims, particularly in the transport industry and the building and construction industry. In this case, the High Court very firmly restated that a person's signature on a contract adopts the content of that contract, whether or not they've actually read it. Also, contrary to the layperson's view, you can contract out of negligence if that's what the wording of the contract clearly indicates.

So, you actually can contract out of negligence. And, in fact, this case confirms that a properly worded contract remains a powerful device for shifting the risk.

Again, you have to analyse if the contract seems to shift that risk. What does that mean in terms of the wording of your policy? Have you agreed to cover this additional insured? Or, has the insured increased their liability beyond what it would be a tort, thereby potentially attracting the operation of your contractual exclusion?


We hope you found this article insightful, and that you were able to pick up a few tips and tricks during your read. For any further information on these cases and the lessons they hold, feel free to contact Principal David Jesser.

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