The Commercial Court has awarded Standard Life Assurance Limited damages of close to £100 million for its claim against insurers to indemnify the company for compensating its customers for falls in the value of an investment fund in 2009.
In its judgment, the Court considered issues of fact, construction of the policy wording, apportionment of losses and aggregation. Ultimately, however, it was held that the company's claim should succeed in full against both primary layer (£25 million) and secondary layer (£75 million) insurers.
The factual background to the claim was the collapse in the value of asset backed securities following the bankruptcy of Lehman Brothers, which led to fall in unit prices in the Standard Life Sterling Fund of around 5%. In February 2009, Standard Life topped up the Fund to compensate customers. The Insurers alleged that the Standard Life had not acted to stem claims, but to improve its brand image. The Judge accepted Standard Life's case that it reasonably believed that its actions would cost less than paying customers individually and held that the expenditure qualified as "Mitigation Costs" under the policy.
The judgment is here.
George Leggatt QC and Simon Salzedo QC represented the successful Claimant, Standard Life Assurance Limited.