Weekly Update: A Summary of Recent Developments in Insurance, Reinsurance and Litigation Law - 34/10

THIS WEEK'S CASELAW

Omega Proteins v Aspen Insurance

Whether judgment between insured and third party is binding on liability insurers

http://www.bailii.org/ew/cases/EWHC/Comm/2010/2280.html

The insured was ordered to pay a third party damages after it failed to comply with a new law banning the supply of animal material containing the vertebral column of cattle aged over 24 months. The judgment found that the insured had breached express and implied contractual terms. The insured was placed in liquidation and so the third party brought a direct claim against the insured's liability insurers under the Third Parties (Rights Against Insurers) Act 1930. Insurers sought to rely on a policy exclusion which provided that the insurers would not indemnify the insured against any liability arising under a contract "unless such liability would have attached in the absence of such contract". Clarke J held as follows: