Comment
It is important to note that Mr McCullough did not contest Arch’s claim. The legal arguments do not appear to have been explored as fully as they might. In particular, the judgment does not refer to Maccaferri v Zurich [2015] or to Jacobs v Coster (t/a Newington Commercials Service Station) [2000].
In those cases, the policy wording was very different; notification was required on the occurrence of an event which was likely to give rise to a claim. Nonetheless, in both those cases it was emphasised that the seriousness of an accident was not enough and that knowledge of the cause of the accident or/and being blamed for it was crucial.
By contrast, Cockerill J did rely on the seriousness of the accident/injury. The fact that Mr McCullough could not reach any conclusions on the cause of the accident counted against him. Similarly, the fact that the girl’s family did not immediately blame him also was not crucial. This difference in approach can perhaps be explained by the fact that Cockerill J was examining whether there was a real risk of a claim, whilst in Maccaferri Knowles J was examining whether a claim was likely.
A further interesting aspect to the decision is Cockerill J’s consideration of whether the notification had been made “as soon as reasonably practicable”. It is well established that this is a matter of evaluating whether notification was given as soon as possible in all the circumstances. However, Cockerill J did not just consider Mr McCullough’s circumstances, but also took into account Arch’s evidence on the prejudicial effect of the late notification.
Cockerill J’s conclusion that the notification clause was a condition precedent is also very interesting and helpful.
We have often seen conditions in public liability policies similar to Condition 1 in Arch’s wording, where the clause seeks to turn all of the insured’s obligations into conditions precedent.
Clearly Cockerill J considered there to be no problems in principle and it was a matter of considering whether there was sufficient clarity and a workable ambit for each and every obligation.
The door is therefore very much open to insurers to rely on such clauses and to argue that breach of the notification clause discharges insurers’ liability. Insurers do not have to prove that they have suffered “prejudice” in order to rely on a condition precedent, albeit this may nonetheless be a factor when insurers consider the point from a commercial perspective.
Late notification issues due to the COVID-19 pandemic such as accidents and claims not being notified timeously due to staff shortages or office closures (so that post is not dealt with etc.) has often led to claimants making unnecessary applications for pre-action disclosure or prematurely commencing proceedings. In each case, insurers will want to consider both whether the late notification has a real justification and whether it is nonetheless a point to be taken for TCF (treating customers fairly) and commercial reasons. Subject to such considerations, this latest decision should provide insurers with encouragement that late notification defences can be run successfully.
Related item: Speak now, or forever hold your peace' Irish High Court rules insurer was justified in refusing cover for late notification
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