Insurer’s subrogation rights in relation to leasehold premises revisited

In Elizabeth Frasca-Judd v Galina Golovina [2016] EWHC 497 (QB), the High Court has held, applying Mark Rowlands v Berni Inns Limited [1986] QB 211, that where a landlord insured property for the benefit of herself and her tenant, the insurer could not bring a subrogated claim against the tenant for damage caused by breach of contract and/or negligence.

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Court of Appeal reaffirms that rights of recovery and subrogation in situations of joint insurance will depend upon the terms of the underlying contractual relationship

In the recent cases of Gard Marine & Energy Ltd v China National Chartering Co Ltd and China National Chartering Co Ltd v Daiichi Chuo Kisen Kaishai [2015] EWCA Civ 16 (heard together) the Court of Appeal overturned the first instance decision of Mr Justice Teare, finding that there had been no breach of safe port warranties under separate contracts of charterparty. Although the Court of Appeal's decision was based upon the specific facts of the case as regards the alleged breach of warranty, the obiter comments of Lord Justice Longmore are of general interest in that they reaffirm that the availability of rights of subrogation as between composite insureds flows from an analysis of the underlying contract and suggest, in effect, a rebuttable presumption that an agreement to insure in joint names precludes subrogation as between composite insureds.

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Court of Appeal implies waiver of subrogation

In Rathbone Brothers plc v Novae Corporate Underwriting [2014] EWCA Civ 1464, the Court of Appeal confirmed that an individual engaged in a consultancy agreement with the policyholder of a professional liability insurance policy was covered by the policy notwithstanding that he was a consultant rather than an employee.

The judgment at first instance was reversed, however, in relation to the question of subrogation. The insurer could not exercise any right of subrogation in order to claim under a contractual indemnity given by the trust company to the trustee.

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