Adam Kramer and Sophia Dzwig, instructed by Georgina Squire at Rosling King LLP, succeeded in obtaining a £16m award under the Third Party (Rights Against Insurers) Act 1930 in UK Acorn Finance Limited v Markel (UK) Limited  EWHC 922 (Comm).
The Claimant UKAF had obtained judgments in 2016 and 2017 against the insolvent insured in respect of negligent valuations. Markel had avoided the relevant policies, which contained an unintentional non-disclosure clause, for fraudulent misrepresentations by the insured.
HHJ Pelling QC (sitting as a High Court Judge) considered, after reviewing the case law, that the unintentional non-disclosure clause (“You are able to establish to Our satisfaction that such non-disclosure or misrepresentation was innocent and free from any fraudulent conduct or intent to deceive”) entitled the Court to assess the insurer’s decision on Braganza irrationality grounds but not to perform its own assessment of whether the insured was fraudulent. However, the Court found after detailed evidence by the claims handler, that the insurer’s approach to assessing fraud was permeated by failings and so did not give the insurer a right to avoid under the clause.
The judgment is available here.