Indemnity Enforceable After All

Rust Consulting Limited (in liquidation) v PB Limited (formerly Kennedy & Donkin Limited) [2012], CA

Rust sought to claim under an indemnity given by PB when it purchased Rust business. PB assumed "responsibility for the ... discharge of all the outstanding liabilities and contracts of [Rust's] business" and indemnified Rust against all claims etc in respect of such liabilities. Liabilities were defined by reference to the accounts at completion. Ten years later, a client of Rust claimed against Rust in negligence for faulty advice given. PB took over the defence of the claim and consented to judgment being entered in favour of the client against Rust for about £8 million. Rust's liquidators later claimed against PB under the indemnity in respect of the consent judgment.