Patrick Bracher (ZA)

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Covid-19 claim rejected because of virus exception (US)

By Patrick Bracher (ZA) on April 14, 2021 Posted in Insurance

A Kentucky US district court rejected the business interruption insurance claim of a retail business specialising in sale of outdoor sportswear and equipment for losses suffered as a result of government restrictions following the outbreak of Covid-19. The all-risks policy covered physical loss and damage but excluded damage caused directly or indirectly regardless of any … Continue reading

More debarment guidance from the Tribunal

By Patrick Bracher (ZA) on March 31, 2021 Posted in General

More debarment guidance from the Tribunal A representative’s dishonesty, negligence or incompetence must be sufficiently serious to impugn the honesty and integrity of the representative as a person before debarment is justified. The ambit of the enquiry determining fit and proper characteristics is that a representative must conduct themselves with honesty and integrity and be … Continue reading

Subrogated claim against fire-causing students rejected because students were insureds (US)

By Patrick Bracher (ZA) on March 29, 2021 Posted in Insurance

The insurer was denied the right to sue two former college students for $4.5 million the insurer had paid to the school after the students accidentally set fire to the dormitory. It was held that the students accommodated in dormitories were equivalent to tenants and insured under the school’s fire policy. The two students used a … Continue reading

Insurer not required to pay for medical marijuana (US)

By Patrick Bracher (ZA) on March 3, 2021 Posted in Insurance

The Massachusetts Appeals Court refused to order an insurance company to pay for the medical marijuana expenses to treat the claimant’s pain stemming from a work-related injury he sustained in 2014. The US situation is curious in that medical marijuana is allowed in some states but is still unlawful under federal law. The Massachusetts law … Continue reading

Payment to broker may not be payment to insurer (US)

By Patrick Bracher (ZA) on February 10, 2021 Posted in Insurance

The Georgia Court of Appeals (US) found that payment of premiums by house owners insurance policyholders to their insurance agent was not payment to the insurer where notice had been given to the policyholders to pay directly to the insurer. In October 2014, the insurer sent a renewal notice to the policyholders requiring them to … Continue reading

124 food poisoning claims is one ‘occurrence’ (US)

By Patrick Bracher (ZA) on February 10, 2021 Posted in Insurance

A Texas district court held that 124 claims for food poisoning from salmonella bacteria suffered by patrons at a restaurant was one ‘occurrence’ within the terms of the restaurant’s insurance policy. An occurrence was defined as ‘an accident including continuous or repeated exposure to the same general harmful conditions’. An occurrence was ‘an accident’ and … Continue reading

Claim for loss of use of building precluded by ‘impaired property’ exclusion (US)

By Patrick Bracher (ZA) on February 10, 2021 Posted in Insurance

A conveyor company failed in its claim against its insurers for a loss arising from the supply of a defective cookie packaging machine to a biscuit manufacturer because the policy specifically excluded coverage for “impaired property”. The claim by the biscuit manufacturer against the insured alleged that they were unable to use their new building … Continue reading

Legal professional privilege promotes the rule of law

By Patrick Bracher (ZA) on February 9, 2021 Posted in General

In a matter regarding unlawful surveillance the Constitutional Court held that the proper functioning of our legal system is reliant on the confidentiality of communications between lawyer and client. That promotes the rule of law. Although originally sourced from the common law, legal professional privilege is now supported by the Constitution. The court reaffirmed a … Continue reading

Protection of journalists’ sources is supported by the Constitution

By Patrick Bracher (ZA) on February 9, 2021 Posted in General

In the course of a judgment regarding unlawful surveillance, the Constitutional Court found that journalists’ sources of information require special consideration and must be protected against disclosure to the extent possible. Journalists are not expected to reveal the identity of their sources. Freedom of the media is a fundamental requirement for democracy and when journalists … Continue reading

International law does not cover expropriations of property belonging to a country’s own nationals

By Patrick Bracher (ZA) on February 9, 2021 Posted in General

An interesting case involving international law was heard in the US Supreme Court and lead to the conclusion that the US Foreign Sovereign Immunities Act which reflects international law does not entitle a foreign state to interfere with what is known as a ‘domestic taking’ where the state takes the property of its own nationals. … Continue reading

New York regulator issues a cyber-insurance risk framework

By Patrick Bracher (ZA) on February 9, 2021 Posted in Insurance

Concerned about pandemic-related extra cyber activity, the rise in ransomware and recent cyber-espionage campaigns, the New York State Department of Financial Services (DFS) issued a cyber-insurance risk framework on 4 February 2021. After describing the risks for insurers and concluding that insurers play a critical role in mitigating and reducing the risks of cyber-crime, the … Continue reading

Life policy proceeds due to insolvent must be paid to their trustees

By Patrick Bracher (ZA) on February 8, 2021 Posted in General

Where an unrehabilitated insolvent was the beneficiary of the proceeds of a life policy taken out on the life of his wife, and the couple’s joint estate had been sequestrated, it was held that the proceeds of the policy were payable to the trustees of the insolvent estate and not to the insolvent surviving husband. … Continue reading

Meaning of payment for electricity under lease at ‘prevailing commercial rates’ (UK)

By Patrick Bracher (ZA) on February 8, 2021 Posted in General

Where a tenant was required to pay for electricity and gas ‘at no more than … the … prevailing commercial rates’ the court held that this meant the prevailing commercial rates of the private utility networks of major UK airports including airports receiving international and internal passengers rather than the rates payable to public networks … Continue reading

Direct versus indirect damages, and effect of non-variation clause

By Patrick Bracher (ZA) on February 3, 2021 Posted in General

A cell phone service provider had wrongfully repudiated a contract with a dealer in cell phone products. The Supreme Court of Appeal held that the indemnity clause did not preclude the dealer from claiming damages. The clause which excluded liability for indirect damages did not preclude the damages claim because the amount claimed did not … Continue reading

Expert determinations under contract and the role of the courts (UK)

By Patrick Bracher (ZA) on February 3, 2021 Posted in General

In a case regarding a share purchase agreement with an adjustable base price of USD 2.258 billion and the adjustment to be determined by an independent accountancy firm acting as an expert, the court dealt with the supervision and control by the court of expert determinations. The approach is: The parties may agree that an … Continue reading

Sale of shares for “fair value” under MOI (UK)

By Patrick Bracher (ZA) on February 3, 2021 Posted in General

Where a minority shareholder (24.99%) was obliged to sell his shares to the majority at a “fair value” according to the articles of association (memorandum of incorporation) it meant a sale at the value of the shares on a sale between a willing buyer and a willing seller discounted to reflect the fact that the … Continue reading

Merger ends due to failure to operate in the ordinary course, but COVID-19 not MAE (US)

By Patrick Bracher (ZA) on February 3, 2021 Posted in General

In December 2020 the Delaware court held that the COVID-19 pandemic did not cause a Material Adverse Effect on the target of a merger because the MAE excluded ‘natural disasters and calamities’. Despite this, the buyer was not obliged to close the transaction and was entitled to terminate the sale agreement because the target made … Continue reading

$200 M for deceptively positive disclosures holds lessons (US)

By Patrick Bracher (ZA) on February 3, 2021 Posted in General

In December 2020 the US Securities and Exchange Commission imposed a $200 million negotiated fine on a corporation for alleged disclosure failures relating to its power and insurance businesses. The company was said by the SEC to have given a ‘deceptively positive picture to investors about its operations’ from 2015 to 2017. The company also … Continue reading

Lloyd’s protected cell company approved to promote investment in members

By Patrick Bracher (ZA) on February 1, 2021 Posted in Banking

In order to attract new forms of capital, Lloyd’s of London applied for and has had regulatory approval to set up a protected cell company known as London Bridge Risk. The idea is to make it easier for investment in the Lloyd’s market with a more transparent and efficient capital management process. It provides access … Continue reading

No liability for cricket ball injury

By Patrick Bracher (ZA) on February 1, 2021 Posted in General

Anyone who has studied the law of delict since 1951 is aware of the English case of Bolton v Stone which found that hitting a cricket ball out of a cricket ground is an incidence of the game and did not amount to negligence so that the passer-by injured by the ball could not sue … Continue reading

Amazon may be liable for a defective item bought online (US)

By Patrick Bracher (ZA) on February 1, 2021 Posted in General

In dismissing an application for summary judgment a US supreme court found that the trial court may well decide that Amazon was liable as the ‘seller’ of a defective thermostat that was installed in premises and caused a fire resulting in damage. Amazon alleged that all they did was to allow a third party seller … Continue reading

Application of the bump-up exclusion in a D&O policy (US)

By Patrick Bracher (ZA) on January 27, 2021 Posted in Insurance

The bump-up exclusion in a D&O policy excluded claims ‘alleging that the price paid … for the acquisition … of an entity is inadequate’. The insurers do not have to pay any amount due under a judgment or settlement representing the amount by which the price or consideration would be effectively increased. This is to … Continue reading

Nasdaq proposes board diversity for listed companies

By Patrick Bracher (ZA) on January 22, 2021 Posted in General

Nasdaq has proposed board diversity requirements as a condition to continued listing of corporations. The proposal adopts a ‘comply or disclose’ approach to encourage greater diversity on company boards requiring them to have at least one director who self-identifies as female and have one director who self-identifies as black or African American, Hispanic or Latinx, … Continue reading

No insurance cover because of exclusion of contract-based claims (US)

By Patrick Bracher (ZA) on December 9, 2020 Posted in Insurance

The insured was sued for and settled a claim for $77.5 million under the California False Claims Act for overcharging California government entities under the terms of particular contracts despite their offer of low prices to the government. The insured sued the insurer for an indemnity for its loss. The court denied the claim on … Continue reading