Uppal Taylor Solicitors
10 Bridgford Road
KR & Others – v – Royal & Sun Alliance Plc (2006) High Court before Simon J
Proceedings were brought by the successful Bryn Alyn Claimants against the Public Liability Insurer of Bryn Alyn under the Third Parties (Rights Against Insurers) Act 1930 s.1. The issue that fell to be determined was whether the relevant insurance policy existed pre August 1976 and whether the claims were voided by an exception clause in the policy which excluded liability from any loss resulting from any “deliberate act or omission of the insured”.
The Court found that there was no evidence of a policy prior to August 1976. The Court had found, in the previous cases that the abuse and maltreatment occurred as a result of the negligence of the Defendant; accordingly, there was no finding that the Claimants had suffered injury from a deliberate act or omission on the part of the Defendant. The award had been made by the Court on the basis of neglect and not in respect of the infliction of deliberate harm, as such; the acts of sexual and physical abuse were not acts of Bryn Alyn being the Insured. Negligence had allowed those acts of abuse and maltreatment to occur but any deliberate act was on the part of the abuser. As the insurance policy exception only related to the deliberate acts or omissions of the Insured these claims were not excluded under the policy of insurance.
KR & Others – v – Royal & Sun Alliance Plc (2006) Court of Appeal before Sir Anthony Clarke MR, Longmore LJ and Scott Baker LJ.
The Defendant Insurer appealed against the decision at first instances that it was liable to the Claimants in respect of the claims brought under the provisions of the Third Parties (Rights Against Insurers) Act 1930.
The insurers contended that, firstly, the abuse consisted of deliberate acts of abuse and, whether or not the Insured was negligent, that the abuse was by the Insured because the Insured was the responsibility of the John Allen who was responsible for the Insured. Secondly, the abuse perpetrated by John Allen and the other directors and/or managerial employees of the Insured should be attributed to the Company and therefore was abuse by the Company i.e. the Insured.
The Court of Appeal found that the Defendants first argument was inconsistent with the findings of negligence by the Bryn Alyn Community. The evidence, which had been submitted to the Courts, did not evidence that the regime within the Bryn Alyn Community was calculated to permit abuse to occur. Further, it was necessary to look at the individual acts of abuse and maltreatment in each particular case to see whether or not the Defendant Insurance Company could rely on the exception clause within the policy of insurance.
In respect of the Defendant’s second submission, the Court of appeal stated that the Judge at first instance had erred in holding that the Insurance Company could not rely on the exception clause because the abusers were not acting in a managerial role but for their own ends. On proper construction, the exception clause was concerned with the injury or damage occasioned to the Claimants resulting from a deliberate act or omission of the Insured. If the injury was attributed to the deliberate act or omission of the Insured then the Insurance Company was not liable.
The intention of the exception clause was to exclude liability for damage caused by the deliberate acts of the persons who were to be regarded as, in effect, the Insured itself as opposed to those acts of abuse that were committed by mere employees. In this respect, the deliberate acts of abuse by John Allen fell to be attributed to the Insured; those acts were within the terms of the exception clause along with those acts committed by directors or the heads of individual homes at the time; “managerial employees”. As such, all acts of abuse by John Allen, from when the insurance policies began and acts of abuse when the exception policy was extended to include managerial employees fell outside the scope of the Defendant Insurers cover. However, the Defendant Insurer was liable for the other acts of abuse committed by others.
House of Lords?
Unfortunately, permission was not granted to the remaining Claimants to Appeal to the House of Lords.