Patrick Bracher (ZA)

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Conduct of Financial Institutions Bill published for comment

By Patrick Bracher (ZA) on December 12, 2018 Posted in General

In case you are wondering what your holiday reading is, the draft Conduct of Financial Institutions Bill has been published by the National Treasury for comment. Comments will be accepted until 1 April 2019. The suite of documents includes the Bill itself (188 pages), the COFI Bill Policy Paper (90 pages), and the Socio-Economic Assessment setting … Continue reading

Extinctive prescription: When is a debt due?

By Patrick Bracher (ZA) on December 7, 2018 Posted in General

The Constitutional Court reaffirmed that a debt becomes due when it is immediately claimable or recoverable. Where the purchase price was not receivable under the Alienation of Land Act 1981 until the contract was recorded at the Deeds Office, prescription did not start to run until the recording of the contract took place. It is … Continue reading

Bad subcontractor work not an ‘accident’ – Ohio USA

By Patrick Bracher (ZA) on December 7, 2018 Posted in Insurance

Ohio’s high court has held that damage from a subcontractor’s faulty work is not fortuitous in the context of a commercial general liability policy which covered an ‘occurrence’ meaning an ‘accident, including continuous or repeated exposure to substantially the same general harmful conditions’ causing property damage including physical injury to or destruction of tangible property. … Continue reading

Cyber breach claim fails under GLP because information not ‘published’ (US)

By Patrick Bracher (ZA) on December 2, 2018 Posted in Insurance

A Florida court held that the insurer had no duty to defend a hotel operator’s information technology subsidiary against allegations that it was responsible for a hacking incident that exposed hotel customers’ credit card data because, under the general liability policy, there was no ‘making known to any person or organisation covered material that violates … Continue reading

Definition of ‘explosion’ cover in breakdown policy excludes liability

By Patrick Bracher (ZA) on December 2, 2018 Posted in Insurance

A refining company claimed under its equipment breakdown insurance policy following an explosion that occurred when a segment of a pipe in a charge heater designed to refine the petroleum product naphtha burst. A 600 degree naphtha mixture was running through the pipe at more than 14 000 pounds per hour and, when the charge heater … Continue reading

Interpretation of sanctions clause in a policy

By Patrick Bracher (ZA) on November 29, 2018 Posted in Drafting tips

In reaching a decision regarding the sanctions clause in a policy, the UK High Court made a number of useful comments on how a policy is interpreted: When a dictionary definition is relied on (in this case for the meaning of ‘expose’) it is a useful starting point but is not necessarily determinative of the … Continue reading

Enforceability of the sanctions exception in policies (UK)

By Patrick Bracher (ZA) on November 25, 2018 Posted in Insurance

An awaited decision on the enforceability of the sanctions provision in policies of insurance heard in the UK courts has turned out to be of not much general assistance. The English High Court found that, although an insurer is not liable to pay a claim where the payment would be prohibited under EU or US … Continue reading

Damages for denying gender-confirming medical care (US)

By Patrick Bracher (ZA) on November 25, 2018 Posted in General

A jury in Wisconsin awarded damages to two transgender women who were denied gender-confirming medical care by a state health plan. The state’s health insurance excluded procedures, services and supplies ‘related to surgery and sex hormones associated with gender reassignment’. The court found that the exclusion is unconstitutional because it ‘entrenches the belief that transgender … Continue reading

Administrative law: Legal status of departmental Directive

By Patrick Bracher (ZA) on November 19, 2018 Posted in General

The Department of Home Affairs issued an Immigration Directive which required departmental functionaries to refuse all applications for temporary or permanent residence visas made by the holder of an asylum seeker permit. The court found that the directive was treated as binding by the departmental officials tasked to implement it and it was therefore open … Continue reading

Bitcoin held to be property not money for insurance policy (US)

By Patrick Bracher (ZA) on November 19, 2018 Posted in Insurance

A court in Ohio found that bitcoin is covered ‘property’ under a homeowner’s policy and not ‘money’ and therefore the claim for lost bitcoin was not limited by the money sublimit. The decision was based partly on a recent Internal Revenue Service document that categorised virtual currency such as bitcoin as property for federal tax … Continue reading

PI policy cannot be ceded to third party

By Patrick Bracher (ZA) on November 12, 2018 Posted in Insurance

The professional indemnity policy issued by the Attorneys Insurance Indemnity Fund is incapable of cession to a third party. A purported cession to the client of a law firm who had lost misappropriated trust funds was declared invalid by the Supreme Court of Appeal. Contracts can be ceded to third parties if there is no … Continue reading

Insurer entitled to rely on third party expert’s conclusions (US)

By Patrick Bracher (ZA) on November 4, 2018 Posted in Insurance

A Delaware court held that a property insurer did not breach its policy issued to a farm when it refused to cover the collapse of a chicken coop during a blizzard because it justifiably relied on expert reports indicating that the destruction was caused by snow and faulty construction which were exclusions under the policy. … Continue reading

Private equity firm not liable for investing in competing company (US)

By Patrick Bracher (ZA) on November 4, 2018 Posted in General

A Delaware court dismissed a claim that a private equity firm and its affiliated funds had misappropriated trade secrets acquired from a portfolio company via their directors on the board of the company and misused the information by investing in a competitor. The court found that no reasonable inference of misappropriation could be drawn because … Continue reading

Administrative law: Obligation to exhaust internal remedies

By Patrick Bracher (ZA) on October 29, 2018 Posted in General

The Constitutional Court re-examined section 7(2) of the Promotion of Administrative Justice Act which creates an obligation on applicants for the court review of an administrative decision to exhaust all internal remedies first. The obligation to exhaust internal remedies should not be rigidly imposed nor used by administrators to frustrate an applicant’s efforts to review the … Continue reading

One hundred and eighty day period for court review not extended

By Patrick Bracher (ZA) on October 26, 2018 Posted in General

The supreme court of appeal refused to extend the 180 day period for court review proceedings to challenge administrative action by the Free State Gambling and Liquor Authority because there was no reasonably satisfactory or acceptable explanation for the delay. In the absence of any proper explanation for the delay the court refused to grant … Continue reading

Fraudulent misrepresentation defeats voetstoots clause in sale

By Patrick Bracher (ZA) on October 21, 2018 Posted in General

Where a seller had fraudulently failed to disclose a defective roof and sewerage system covered by buildings constructed without required statutory approval he was successfully sued in delict for fraudulent misrepresentation and fraudulent nondisclosure. Because the conduct was fraudulent the delictual claim defeated the voetstoots clause in the deed of sale as well as the … Continue reading

Amazon has no product liability for third party product warehoused and shipped (US)

By Patrick Bracher (ZA) on October 15, 2018 Posted in General

A New Jersey court found that Amazon is not liable for a defective laptop battery it sold that caused a home to burn down. The plaintiff bought a laptop battery using an Amazon account which was sold by a Hong Kong company. She left the battery charging on her bed and the house burnt down … Continue reading

Claim by shareholders against directors under section 218(2) of Companies Act fails

By Patrick Bracher (ZA) on October 11, 2018 Posted in Banking

Shareholders of African Bank Investments Limited failed in their claim for over R720 million against the directors and auditors of African Bank. The plaintiffs sued unsuccessfully under section 218(2) of the Companies Act 2008 alleging that the conduct of the defendants resulted in a loss to the shareholders because of the drop in the share price. The … Continue reading

‘Fraudulent devices’

By Patrick Bracher (ZA) on September 19, 2018 Posted in Insurance

The English Supreme Court had the following to say regarding the standard insurance policy fraud clause which excludes liability if the insured makes a claim ‘by fraudulent devices’. The court said: ‘The expression is borrowed from a standard clause avoiding contracts of fire insurance which was widely used in the 19th and early 20th Centuries. … Continue reading

Medical prosthesis not defective nor abnormal risk (UK)

By Patrick Bracher (ZA) on September 18, 2018 Posted in General

The manufacturer of a hip prosthesis system (which was of a metal-on-metal design) for use in total hip replacement operations was sued by 313 individual claimants who alleged metal-wear debris damaged surrounding soft tissues necessitating revision surgery. The court found that the system was not defective and the claimants had not proved that it did … Continue reading

Responsibility of holding company for delicts of subsidiary (UK)

By Patrick Bracher (ZA) on September 10, 2018 Posted in General

A group of 218 Kenyans sued the English holding company of a subsidiary company in Kenya for which the plaintiffs worked, for failing to protect them against political violence that erupted in Kenya after the 2007 presidential election. The English court held that there was no arguable case against the holding company that it owed … Continue reading

Bank escapes liability for credit reference

By Patrick Bracher (ZA) on August 28, 2018 Posted in General

Playboy Club London sued an Italian bank for losses it suffered after it extended a credit facility to one of the bank’s customers on the basis of a favourable credit reference provided by the bank. A ‘well-known figure at a casino in Lebanon’ applied to Playboy Club for a cheque-cashing facility up to £800 000 to … Continue reading

Hiring a sexual offender who causes harm is an insured ‘accident’ (US)

By Patrick Bracher (ZA) on July 30, 2018 Posted in Insurance

The California Supreme Court held that the negligent hiring, retention and supervision of an employee who sexually abused a 13-year old at a school where he was working was an ‘accident’ for the purposes of a general liability policy. In Californian law an accident is ‘an unexpected, unforeseen, or undesigned happening or consequence from either … Continue reading

Dispute not settled if made subject to written agreement

By Patrick Bracher (ZA) on July 24, 2018 Posted in General

A UK court examined whether a construction dispute had been settled in the course of without prejudice correspondence between the parties’ lawyers. The letter of acceptance of the offer said the settlement was subject to approval by the board of the builder and would only become valid and binding when executed by authorised signatories. The … Continue reading