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Insurance - Non indemnity - policy exclusions – causation – degenerative condition - personal accident insurance

Non indemnity - policy exclusions – causation – degenerative condition - personal accident insurance

A professional football club had an insurance policy to cover the risk of injury to its players. One of its players suffered a back injury which brought his professional football career to an end. The football club made a claim for the injury.

The insurer rejected the claim arguing that the player’s disablement was not caused by the injury alone but was partially caused by a degenerative condition of the spine common to all of the player’s age but particularly footballers. The policy excluded “disablement directly or indirectly resulting from arthritic or other degenerative conditions”.

Going to Court

At trial on the preliminary issue of the construction of the policy the court finds in favour of the football club. The insurer successfully appeals the finding seven years after the original injury. It is decided that if the injury can be shown to have been in part caused by the degenerative condition then the exclusion applies. The matter is referred back to the Judge for a finding on actual causation, but is then settled in favour of the insurer.

The insurer however only recovers £63,000 of the £117,000 it has incurred in costs and is left £44,000 out of pocket, even though it has won.

With Centre for Justice (CFJ)

At CFJ a QC with a speciality in insurance encourages the parties to resolve the dispute with mediation. Having been given guidance at a preliminary stage that the exclusion applies the club agree to withdraw their claim and to pay CFJ's fees.

Outcome

Cost saving with CFJ: £44,000 (100%).

Other benefits of using CFJ:

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