The Court of Appeal has rejected an appeal from insurance firm Zurich, looking to overturn a 2020 ruling ordering it to pay more than £500,000 to Niramax over a 2015 fire.
Environment Agency officers at the scene of the fire in 2015
In March last year, while Zurich escaped from paying out a £4.3 million claim from the Hartlepool-based recycling company for damage caused to Eggersmann machinery, it was ordered to pay more than £500,000 for other equipment (see letsrecycle.com story).
The company appealed the ruling and its case was heard in the Court of Appeal on 15 April 2021, with the verdicts handed down on Friday (23 April).
Zurich argued that the renewal premium of £23,714.40 for the machinery in question was below what it should have been, in part because instead of applying a 6% rate (for waste risks) a rate of 2.25% was used, but also because information was withheld from it.
However, this was rejected by the three judges on the Court of Appeal.
Lord Justice Popplewell ruled that Zurich made a mistake in reaching a premium based on the 2.25% figure and said it was that mistake by them, not a failure by Niramax, to disclose matters relevant to its attitude to risk management, which was the “sole cause of the policy being written more cheaply than it would have been”.
Lady Justice Elisabeth Laing and Lord Justice David Richards both agreed.
‘No further action’
A Zurich spokesperson said: “Zurich defended this case to trial in the interests of the wider pool of policyholders whose representations are fair and accurate. In 2020, the Court ruled in Zurich’s favour on the substantive point that material non-disclosure had occurred, which led to the majority of the claim being dismissed. We acknowledge the Court of Appeal judgement on the points that Zurich pursued and will not be taking any further action.”
“We acknowledge the Court of Appeal judgement on the points that Zurich pursued and will not be taking any further action”
Niramax has been approached for comment.
Dispute
In summary, the dispute related to a 2015 fire (see letsrecycle.com story) which started in the engine compartment of a grab and later spread to a building which contained a “brand new multi-million pound sorting machine”, which was destroyed.
The court document details that Niramax had a policy with Zurich since 2006, which was renewed at the end of every calendar year.
Despite the request initially being turned down, the decision document said, this was eventually granted by Zurich until the end of the policy year, saying a representative of the company felt “effectively duty-bound to Niramax to at least cover the Eggersmann plant until the policy renewal”.
The fire occurred before renewal in December 2015. On renewal Zurich declined to cover Niramax’s fixed plant, the decision document said.
Soon after the blaze, Niramax claimed on the insurance policy it had with Zurich. The judge said the insurance firm “had only recently and reluctantly added the Eggersmann plant to a policy of all risks contractors’ mobile plant insurance”.
Zurich wanted to avoid the policy after this claim, the decision document said, contending that Niramax had failed to disclose five material circumstances for the renewal earlier in the year.
Zurich was successful in not paying out for the Eggersmann machinery, but did have to repay for others, which was the subject of this appeal.
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Source: letsrecycle.com Waste Managment
