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Seechurn v ACE Insurance SA-NV, Court of Appeal

12 February 2002
The issues

Limitation – estoppel – waiver of rights.

The facts

The Claimant sued for payment under two policies of Disability Insurance. Proceedings were started 10 years after the date of the cause of action accruing. Insurers relied on Section 5 Limitation Act 1980 (6 year limit for actions based on simple contract). The Judge found as a fact that the Claimant had entered into negotiations in which Insurers asked for further medical evidence and offered to give further consideration to his claim whilst threatening him with a stay or an adverse Costs Order if he started legal action whilst negotiations were in progress. He found that the Claimant had relied on these representations and that the Insurers could not rely on the Section 5 Defence. The Insurers appealed.

The decision

1. For an estoppel in these situations the representation that the party did not intend to enforce its legal rights had to be clear and unequivocal.

2. The issues therefore were:-

(a) Had there been such a clear and unequivocal promise to be understood objectively;

(b) Whether the Claimant had relied on that promise and had altered his position to his detriment or whether it would be unfair (inequitable or unconscionable) not to hold Insurers to their promise.

3. Although the Judge had rightly concluded that Insurers intended to keep negotiating, this was not a clear enough promise to satisfy the requirements in (a) and (b) above.

4. The promise to negotiate had been conditional on the Claimant submitting to a further medical examination which he had refused to do.

5. In addition, the Judge had not considered whether the promise was a clear one to the effect that the Insurers would give up their rights under the Limitation Act. There was nothing in the correspondence to that effect.

6. There was therefore no estoppel that could operate against Insurers in this case.

Appeal allowed.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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