Insurance Policies Flashcards
(9 cards)
Basic Principle
Companies are separate legal entities, legal people in their own right, who can bring legal cases, and have cases brought against them. A business can have separate corporate personalities (non-human). Salomon v Salomon & Co (1897)
Salomon v Salomon & co 1897
In the Salomon case, the House of Lords said that when a company comes to court the judge should imagine a veil, or curtain, around the company – hiding those who own or manage the company (Corporate Veil). It is not about hiding the identity of the individuals responsible for the company (Directors, shareholders etc), but maintaining the separateness of individual and company.
Macaura v Northern Assurance Company 1925
The owners of companies (usually) have limited liability. There is a separation between the company and the individual. Corporate veil means the policy must be in the company’s name – Macaura v Northern Assurance Company (1925).
1969 Employers Liability (Compulsory Insurance) Act
Under the 1969 Employers’ Liability (Compulsory Insurance) Act, the company has to provide insurance for the company, so the question of who can claim, and who is responsible needs to be asked.
If no insurance
If there is no insurance, then the employees can claim from the company, but can they claim from the directors themselves?
Adams v Cape Industries 1990
Adams v Cape Industries (1990) makes clear that the only reason to lift the veil, unless an Act of Parliament requires the lifting of the veil, is fraud. So, essentially, the company is responsible, and the injured party sues the company.
Lee v Lee’s Air Farming 1961
In Lee v Lee’s Air Farming (1961), the court said companies were separate legal entities, and Lee could be owner, director, and employee. So, regardless of who was injured, they could claim. This includes [Name of Person in Question].
Campbell v Gordon 2016
This is confirmed in Campbell v Gordon (2016), which says that a director is not liable to an employee for failing to ensure the company has valid insurance. Liability could only be ‘on the person sought to be made liable’ – not on someone else. Meaning the company may have been liable, but not the director. If a director negligently fails to make sure the company has insurance, the case of Thompson tells us that there is no personal liability on the director.
Brumder v Motornet 2013
However, in Brumder v Motornet (2013), if a director was responsible for H&S and they were injured, the Court of Appeal held that the Ginty/Kodak principle applied, that a wrongdoer should not benefit from their own wrongdoing. As such, the director would sue the company, but the company would be able to get it back from the Director. As [Name of person] is responsible for H&S, she would not be able to get compensation from the company for her illness. If the company is in liquidation, she still cannot sue [other owner].
