Insurers have lost a claim for priority over uninsured losses where money has been recovered, in a shipping case
Royal Sun Alliance & Ors v Textainer & Ors [2024] EWCA Civ 547 concerned a dispute between insurers, who had paid out under excess of loss policies, and Textainer, a large container lessor, following the collapse of Textainer’s lessee Hanjin Shipping in 2016.
The case centred on whether the insurers were entitled to a proportionate share of $15m (£11.7m) recoveries subsequently made by Textainer, or whether those recoveries should be applied first to uninsured losses, as per the ‘top down’ approach adopted by the House of Lords in Lord Napier and Ettrick v Hunter [1993] AC 713.
The Court of Appeal reaffirmed that recoveries made by Textainer were to be applied on a ‘top down’ basis rather than on a proportionate basis.
BDM partner David McInnes said: ‘We are very happy with this important and comprehensive victory for our clients Textainer, which reaffirms key principles of the English law of insurance and subrogation.’
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