Quinn case sheds light on periods of limitation

High Court London

A recent High Court ruling in favour of Quinn Insurance has clarified the law regarding the timeframe for submitting claims where an insurer has denied liability, according to law firm Browne Jacobson.

Case WM Swindon v Quinn Insurance arose from a dispute between building company Lenihan and its insurer, Quinn Insurance, following a fire caused by Lenihan's negligence.

After Quinn denied indemnity, various companies affected by the fire sued Lenihan, which went into liquidation, and its rights under the Quinn policy were transferred to the claimants.

The policy contained a clause stating that any dispute over Quinn's liability had to be flagged up within nine months.

The claimants argued that the period of limitation should apply from when Lenihan became liable to them. However the court sided with Quinn, agreeing that the limitation time on a breach of contract claim was six years from the date when the insurer refused cover and not when the insured's liability to the claimant was established.

Commenting on the significance of the case, Jonathan Corman, a partner at Browne Jacobson, said insurers would welcome the ruling as it was "not unusual for insurers that have declined indemnity to be faced many years later with claimants seeking to challenge this decision".

"This shows that any such challenge - if more than six years after the original declinature - would be statute-barred," he added.

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