Patrick Bracher (ZA)

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Transferability of water use entitlements and other government-granted rights

In a case where the Supreme Court of Appeal found that section 25 of the National Water Act, 1998 (NWA) permits the transfer of water use entitlements subject to a licence being granted to the transferee by the Minister, the court made some important observations about the transfer of government-granted rights generally. The NWA abolished … Continue reading

Municipalities’ power to impose rates may be limited by national legislation

The power of municipalities to determine their rates policies is subject to regulatory supervision of the national legislature in terms of section 229(2)(b) of the Local Governance Municipal Property Rates Act of 2004.  National legislation limits rates for public benefit organisations (in this case independent schools) to 25% of the rate levied on residential property … Continue reading

Conversion of non-life licence results in lapse of accident and health policies

Prior to conversion of its short-term licence to a non-life licence under the Insurance Act, 2017, the insurer underwrote accident and health policies with what are now both life and non-life risk components.  Under the Insurance Act non-life insurers are only permitted to conduct accident and health policies insuring costs or loss of income (not … Continue reading

When can you claim compound interest?

As a starting point, it is generally accepted that where compound interest is not expressly provided for in an agreement, only simple interest is due.  Compound interest is claimable only in certain defined circumstances namely (a) where parties agree to pay compound interest (b) if the obligation to pay interest is alleged and it is … Continue reading

Silent cyber and ransomeware cover (US)

The insured was locked out of its computer systems with the hard drives encrypted as a result of a ransomeware attack.  It ultimately paid the requested ransom with four bitcoins valued at nearly $35 000 before it regained access to its computer systems.  The court held that, if fraud was established, the insurers would have to … Continue reading

Tribunal upholds Prudential Authority penalty for unrecorded loan & dividends directive

An October 2021 decision of the Financial Services Tribunal upholding an administrative order, a directive, and a penalty by the Prudential Authority is worth noting.  The Tribunal held there was no basis for successfully challenging the penalty for an intergroup loan arrangement not recorded in writing and for unjustified dividends paid. A small licensed life … Continue reading

Cyber risks again

We have been mentioning for some time the pandemic-like risks associated with cyber events.  According to a recent Airmic survey cyber rates have risen by as much as 400% for some insureds.  Cyber risks are therefore said to be the most likely new risks to be financed by captives. If a systemic cyber event should … Continue reading

‘Strategic response costs’ v ‘ex gratia’

A recent US case referred to an interim payment to injured third parties as ‘strategic response costs’ covered under the policy.  That is a neat phrase to use instead of an ex gratia payment. ‘Ex gratia’ is always controversial because it implies a payment without a lawful obligation.  Ex gratia payments are often made for … Continue reading

Insured loss to value of damaged and repaired vehicles

In the US state of Georgia, the formula applied with court backing since 2001 for determining how much a car’s value diminishes after a wreck and repair is “the difference between pre-loss value and post-repair value”.  Attorneys for two plaintiffs brought a class action alleging that the insurer was underestimating the value of repaired cars … Continue reading

Exploding vape excluded from policy by ‘products completed’ exclusion

An electronic cigarette store failed in its claim for an indemnity from its insurer for a vape battery that exploded in a customer’s pocket away from its premises. The policy excluded an event “occurring on any premises other than the designated premises shown in the schedule”. The products-completed exclusion clearly precluded coverage for bodily injury … Continue reading

Lessee who buys the leased property has rights and obligations as owner not lessor (confusio)

The lessee of a property under a 30-year notarial land lease agreement with Transnet Limited sublet portions of the property to sub-lessees who subsequently acquired rights under a lease assignment agreement.  When the lessor bought the property, payment obligations under the lease assignment agreement terminated. A sub-lessee who had taken assignment of rights under the … Continue reading

Illegal drug held to be excluded contaminant from insurance policy (US)

A US court found that liquid and solid forms of the illegal drug methamphetamine (a highly addictive stimulant known as meth and by other names) was an excluded “contaminant” for the purposes of a house owner’s insurance policy. The insured’s grandson resided with the insured. The police executing a search warrant discovered liquid and solid … Continue reading

Claim denied for professional services exclusion and interpretation rules (US)

While performing services on a construction site owned by a Port Authority, an employee of a contractor slipped and fell on wet soil and rocks because of unsafe working conditions and sued for damages.  The construction management firm, Techno, was insured under a comprehensive general liability policy. When the port authority was sued by the … Continue reading

Misrepresentation inducing a contract is not a breach excluded by the contractual exclusion clause in a policy (US)

A US court found that the exclusion in an insurance policy against losses arising out of or involving a breach of contract or agreement did not exclude a claim resulting from a misrepresentation that induced the contract. The insurer was excused from paying the amount of an arbitration award arising from a business dispute which … Continue reading

Certain private bodies exempted from compiling information manual

The Promotion of Access to Information Act of 2000 requires most entities to provide an information manual setting out the documents which are readily available to anyone seeking information from the entity.  The number of businesses, including private companies, required to prepare a manual is inestimable.  Some private companies have now been exempted from the … Continue reading

Interpretation: “subsequent amendment” to a statute does not refer to a replacement statute (Aus)

In June 2021 the High Court of Australia held that a clause in a business interruption policy that excluded diseases that were “declared to be quarantinable diseases under the Quarantine Act, 1908 and subsequent amendments” did not include diseases quarantinable under the Biosecurity Act, 2015 which had repealed and replaced the 1908 Act. The insurers … Continue reading