Patrick Bracher

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All-Risks policy does not cover non-existent cargo

By Patrick Bracher on June 19, 2018 Posted in Insurance

The English High Court held that an all-risks marine cargo and storage insurance policy did not cover a loss of copper ingots which were never shipped to the claimant who had in good faith paid for and taken up fraudulent bills of lading. The claimant bought 7 000mt of copper ingots for shipment to China. The … Continue reading

Asbestos exclusion upheld in US

By Patrick Bracher on June 19, 2018 Posted in Insurance

An exclusion for claims ‘arising out of asbestos’ was upheld by the US Third Circuit because it is unambiguous and therefore enforceable. The Appeal Court overturned a $36 million judgment against the insurer, which is only part of the policyholder’s liability for $120 million worth of asbestos-related claims. The court did not accept the argument that the … Continue reading

Administrative action can be reviewed from when it adversely affects a person’s rights

By Patrick Bracher on June 12, 2018 Posted in General

The Supreme Court of Appeal decided that a decision by the National Energy Regulator of South Africa to determine gas prices was not reviewable at the stage when NERSA decided on a methodology to determine the prices, but was reviewable when NERSA subsequently determined the prices imposed on customers. In February 2012, NERSA concluded that … Continue reading

European Commission’s approach to artificial intelligence (AI)

By Patrick Bracher on June 11, 2018 Posted in General

The European Commission has labelled AI as one of the most strategic technologies of the 21st Century (so far of course) and has proposed a three-pronged approach to EU members which is worth considering: Investment in AI research and innovation must be increased. The EU (public and private sectors) is boosting investment by at least … Continue reading

Is continuing to use ship’s engine after alarm accidental loss? (Aus)

By Patrick Bracher on June 11, 2018 Posted in Insurance

The insured pleasure craft was fitted with a diagnostic system and a critical alarm for low oil pressure or high coolant temperature. When the alarm went off the engines automatically went into limp mode and the engine-operating manual required the engine to be switched off. The insured did not read the manual nor switch off … Continue reading

Cancellation of contract not justified where most of the price already paid and restitution unlikely

By Patrick Bracher on June 6, 2018 Posted in General

The court refused to uphold cancellation of an agreement of sale for a members’ interest in a close corporation because only a total of R160 000 out of a purchase price of R4 million (96%) was outstanding and three of the appellants had been paid in full. In addition, restitution of the amount already paid was doubtful … Continue reading

Failure to object to short payment may be a waiver and result in prescription

By Patrick Bracher on June 4, 2018 Posted in General

An intention to waive must be inferred reasonably; no-one can be presumed to have waived rights without clear proof. The test for such intention is objective. Silence and inaction will do when a positive duty to act or speak arises. A security company rendered security services to a municipality for six years. During the second … Continue reading

Exclusion of loss arising from arrest, restraint, detainment

By Patrick Bracher on June 4, 2018 Posted in Insurance

The UK Supreme Court examined the question whether a vessel detained in Venezuela as a result of being used by a drug cartel to smuggle cocaine strapped to the hull fell within the exclusion for ‘arrest, restraint, detainment, confiscation or expropriation … by reason of infringement of any customs … regulations’. The owners of the … Continue reading

Insurers do not have to indemnify lawyer for overbilling claim (US)

By Patrick Bracher on May 31, 2018 Posted in Insurance

A property foreclosure attorney was sued in a class action for overbilling a group of property owners. The lawyer sued his PI insurers to oblige them to defend him against the class action. He lost. The court found that the policy did not create a duty to defend because the allegations had arisen from billing … Continue reading

How to politely tell someone they are lying

By Patrick Bracher on May 27, 2018 Posted in General

In a recent case which went through two courts in the UK relating to a ‘fiscally clandestine organisation’, the evidence of the various ‘utterly dishonest’ witnesses was described in the following phrases which you may find useful: One witness was ‘egregiously dishonest’ and in his evidence was ‘as heroically dishonest as he is in everyday … Continue reading

Cocaine planted on ship by smugglers not an insured ‘malicious act’ (UK)

By Patrick Bracher on May 27, 2018 Posted in Insurance

Unknown third parties strapped bags of cocaine to the hull of a vessel leaving Venezuela resulting in the detention of the ship for more than six months and therefore a constructive total loss. The UK Supreme Court ruled that the loss did not result from ‘any person acting maliciously’. In the context of a clause … Continue reading

Additional insureds you have agreed to insure (US)

By Patrick Bracher on May 27, 2018 Posted in Insurance

A US construction insurance policy included provision for an additional liability insured as ‘any person or organisation with whom you have agreed to add as an additional insured by written contract’. It was held the policy did not cover a project architect with whom there was no such direct written contract. Because the endorsement included … Continue reading

Requirements for claim for sequestration/liquidation

By Patrick Bracher on May 24, 2018 Posted in General

In order to claim the liquidation of a company or the sequestration of a trust or individual person it is necessary to show that the target is the claimant’s debtors and the target is insolvent. The claim must be a liquidated claim because a damages claim yet to be proved cannot found an application for … Continue reading

Deliberations of Judicial Services Commission must be revealed

By Patrick Bracher on May 22, 2018 Posted in General

The Constitutional Court has held that the private deliberations of the Judicial Services Commission in exercising its mandate to appoint judges must be disclosed as part of the record of proceedings when a decision is challenged. The judicial candidates are interviewed in public and this is followed by private deliberations and recommendations to the President … Continue reading

Application of insolvency exclusion (UK)

By Patrick Bracher on May 22, 2018 Posted in Insurance

Where a professional indemnity policy excluded claims ‘arising out of or related directly or indirectly to the insolvency of the insured’ the court absolved the insurer from liability in a claim by a financial management company that had lost money on a £200 000 investment when the issuer of a bond went insolvent. The court held … Continue reading

Settlement not authorised by insurers is not an occurrence (Australian case)

By Patrick Bracher on May 14, 2018 Posted in Insurance

A refurbishment contract entered into by the insured led to arbitration which the insured settled without the insurer’s authority on the basis of a ‘cap and collar’, capping the award if the claimant was successful and agreeing to a payment of USD2 million if the claim failed. The claim failed and the insured claimed the USD2 million … Continue reading

Insurance of ‘damages’ does not include statutory penalties (US)

By Patrick Bracher on May 14, 2018 Posted in Insurance

The insured failed in an attempt to get an indemnity under a liability policy covering ‘damages’ for statutory damages sought by the Federal Trade Commission. The insured had made telephone calls in breach of the Telephone Consumer Protection Act (TCPA) to numbers on the National Do Not Call Registry. The FTC asked for statutory damages … Continue reading

Good faith requirement in a guarantee

By Patrick Bracher on May 13, 2018 Posted in General

Where a retention guarantee was provided to a construction company for an amount to be demanded but not exceeding ‘a good faith estimate of the costs’ claimed, the contractor had to show that the demand was made in the honest belief that it was a correct estimate of what it was entitled to be paid … Continue reading

Ambiguous limits of indemnity (UK)

By Patrick Bracher on May 13, 2018 Posted in Insurance

Where a policy schedule and the wording of the policy were not on the face of it consistent, the court considered the combined effect of the limit for a single claim and a number of linked claims and held that the same £10 million applied to both. According to the schedule, the limit of indemnity for … Continue reading

Defence of lack of authority to conclude agreement rejected

By Patrick Bracher on May 9, 2018 Posted in General

A provident fund entered into an investment consulting agreement but subsequently contended that the signatories were not authorised and that the agreement was beyond its powers granted by the fund rules. Although there were strong objections to the agreement at the trustees meeting approving the agreement, no voting took place but the decision to appoint … Continue reading

Sanctity of contracts is good public policy

By Patrick Bracher on May 7, 2018 Posted in General

A lease was challenged on the grounds that the cancellation for non-payment of rent, after prior notice that the rent had not been paid, should not be enforceable because it was against public policy to cancel the agreement for the lease of a hotel that had been in place since 1982. Although good faith is … Continue reading

Prescribed rate of interest is 10% from 1 May 2018

By Patrick Bracher on May 2, 2018 Posted in General

The prescribed rate of interest has been changed with effect from 1 May 2018 to 10% per annum. The previous rate was 10.25%. According to the Prescribed Rate of Interest Act, interest on debts where no rate is prescribed is calculated at the repo rate plus 3.5%. The prescribed rate of interest applies to all debts … Continue reading

Minority shareholder who dominated board held to control a company

By Patrick Bracher on May 1, 2018 Posted in Insurance

A court, asked to dismiss a claim against Tesla Motors, found it reasonably conceivable that Elon Musk, a 22.1% shareholder, was a controlling shareholder because of his ‘actual domination and control over the directors’ wielding more power than may be evidenced by the minority shareholding. Normally the courts of Delaware, where the case happened, would … Continue reading

Statutory self-help provision to deduct money from employee’s earnings declared unconstitutional

By Patrick Bracher on May 1, 2018 Posted in General

The Constitutional Court declared unconstitutional a provision in the Public Service Act entitling the government to deduct money due by an employee without any hearing. The employee had been overpaid a salary for a five year period because of a wrong grading and the Department of Health Gauteng deducted R56 257 from a gross salary of … Continue reading