Insurance and Reinsurance Weekly Update 26 June 2012

Coles & Ors v Hetherton & Ors

Whether claimant insurer could fully recover the cost of repairs from the defendants' insurers

http://www.bailii.org/ew/cases/EWHC/Comm/2012/1599.html

The claimants in this case were drivers whose cars had been damaged by the defendants. The claimants' insurer ("A") indemnified the claimants by paying for the repairs to the car. The insurer then brought subrogated claims against the defendants' insurers ("B") seeking declarations as to their liability. The claimants in this case had all elected to use A's system for repairing their cars. Under this system, A engaged one of its subsidiaries to undertake the repairs but the repairs were actually carried out by subcontractors. B objected because the subsidiary charged higher rates than those paid by it to the subcontractors and the interposition of the subsidiary had the effect of increasing the costs of the work done by around 25%. A responded that the amount charged by the subsidiary