Patrick Bracher (ZA)

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Entire building cladding replaced despite only two sides damaged

By Patrick Bracher (ZA) on August 14, 2019 Posted in Insurance

A hailstorm physically damaged the aluminium cladding on the south and west sides of the insured building. The insurer was ordered to replace the cladding on all sides of the building because a matching cladding could not be found. It was held that the obligation to pay for “direct physical loss” to the “covered property” … Continue reading

Damages under insurance contract with reinstatement value conditions

By Patrick Bracher (ZA) on August 12, 2019 Posted in Insurance

Where an insurance policy included reinstatement value conditions and the insured had taken immediate steps to comply with the reinstatement conditions, the insured could rely on the clause as long as the insured was genuinely desirous of restarting the business but was unable to do so because of the insurer’s unjustifiable decision not to indemnify … Continue reading

Contribution between insurers (US)

By Patrick Bracher (ZA) on August 12, 2019 Posted in Insurance

When Empire Insurance Company paid the claim for losses sustained by a car hire company when the hirer crashed their Lamborghini, it sought to recover its outlay from Allstate Insurance who insured the driver who was responsible for damage to the vehicle under the rental contract. The court held that Allstate was not entitled to … Continue reading

Setting aside arbitration finding for fraud discovered after award (UK)

By Patrick Bracher (ZA) on August 7, 2019 Posted in General

The English commercial court set out the limited basis on which an arbitration award can be set aside when it is alleged that evidence of fraud that would have affected the decision only came to light after the award. The merits of an arbitration award are rarely reviewed. Public policy exceptions such as fraud can … Continue reading

The State’s liability for damages at a school under the Schools Act

By Patrick Bracher (ZA) on August 6, 2019 Posted in General

The South African Schools Act 1996 makes the State liable for any delictual damage or loss caused as a result of any act or omission in connection with any school activity for which the school would otherwise have been liable. The State is only liable to the extent that the event is not covered by … Continue reading

Separating good from bad in a statute

By Patrick Bracher (ZA) on July 30, 2019 Posted in Drafting tips

It has been reaffirmed that where part of a law is invalid for being beyond the powers of the lawmaker (ultra vires) the good in the law will not be separated from the bad if it is complicated and impractical to do so. If there is an incoherent remainder, the entire law will be set … Continue reading

A rare contribution case, and the pollution exclusion (US)

By Patrick Bracher (ZA) on July 30, 2019 Posted in Insurance

After the Zurich American Insurance Co (ZAIC) in Missouri, USA paid out a claim on wrongful death from asbestos exposure, it sought a contribution from Insurance Company of North America (INA). The claim for contribution failed because the INA policy had a pollution exclusion but the principles of contribution between insurers were discussed. The facts … Continue reading

War exclusion requires hostilities between sovereign states (US)

By Patrick Bracher (ZA) on July 23, 2019 Posted in Insurance

A Californian court of appeals found that war exclusions which exclude coverage for expenses resulting from “war” or “warlike action by a military force” require hostilities between de jure or de facto governments (governments or entities essentially like governments). The insured was a film company producing a television series in Jerusalem when Hamas fired rockets … Continue reading

POPI progress

By Patrick Bracher (ZA) on July 23, 2019 Posted in General

At the end of June 2019 the Information Regulator announced that the process of putting the Protection of Personal Information Act into effect is “going very slowly” and that: A CEO started on 1 June 2019; A CFO started on 1 July 2019; Other executives are being appointed; They are now at a point where they are … Continue reading

Rationality of an administrative decision

By Patrick Bracher (ZA) on July 23, 2019 Posted in General

A government administrator’s decision may be irrational because it does not take into account a vital material fact for making a rational decision in the light of the empowering legislation and its purpose. The relevant question for rationality is whether the means, including the process of making a decision, are linked to the purpose or … Continue reading

Cyber cover must be specifically provided or excluded (Lloyd’s)

By Patrick Bracher (ZA) on July 23, 2019 Posted in Insurance

Lloyd’s of London requires its insurers to exclude or provide affirmative cover for cyber risks. Insurers connected to Lloyd’s must make sure they do not have unintended exposure to cyber risk. From the beginning of 2020 underwriters are required to ensure that their property damage policies specifically affirm or exclude cyber cover. This applies to … Continue reading

Corporate joint venture not a partnership

By Patrick Bracher (ZA) on July 18, 2019 Posted in General

Section 13(1)(d) of the Prescription Act 1969 delays prescription where there is a debt between partners arising out of the partnership relationship. The legal relationship of partnership arises from a contract between two or more persons who each agree to make a contribution (whether in money, property or service) to a venture to be carried on … Continue reading

Bin with wheels is not a ‘vehicle’ (US)

By Patrick Bracher (ZA) on July 16, 2019 Posted in Insurance

A New York Appeals Court unsurprisingly found that a recycling bin with wheels, which ruptured a gas line used by residents of an apartment building, is not a ‘vehicle’. An all risks policy exclusion did not apply if there was ‘direct loss causing physical damage to covered property from vehicles’. The court said that not … Continue reading

Principal debtor can rectify guarantee between guarantor & beneficiary

By Patrick Bracher (ZA) on July 16, 2019 Posted in Insurance

The Western Cape High Court held that the principal debtor (in this case the contractor under a building contract) can apply to court to rectify a guarantee between the guarantor (an insurer) and the beneficiary under the guarantee (the employer) where the contractor had given a counter indemnity to the insurer. A guarantee contract is … Continue reading

Cyber insurance and the war exclusion

By Patrick Bracher (ZA) on July 16, 2019 Posted in Insurance

Cyber insurers should note the debate going on in London regarding reform of the war exclusion clause in cyber insurance. The perpetrators of cyber incidents are often untraceable and it is difficult to ascertain whether they constitute state-sponsored acts of war subject to the war exclusion clause. There is at least one pending action where … Continue reading

Prescription under performance bond commences on demand

By Patrick Bracher (ZA) on July 10, 2019 Posted in Insurance

Where an insurer provided a performance bond/guarantee in which it undertook to pay ‘on receipt of a written notice from the seller’ saying that the purchaser had defaulted, it was held that extinctive prescription only started to run when demand for payment was made even though three years had passed since the default event. The … Continue reading

No claim for blowtorch-damaged jewellery: care, custody or control exclusion (US)

By Patrick Bracher (ZA) on July 10, 2019 Posted in Insurance

A New Jersey appeals court refused to grant cover for a loss of $4 million worth of opals ruined inside a safe that had to be opened with a blowtorch. The claim was made against the company that sold the safe and were involved in the day long effort to get the safe opened when it … Continue reading

Meaning of the word ‘acquire’ and other interpretation issues

By Patrick Bracher (ZA) on July 3, 2019 Posted in General

A building contractor sought to argue that the word ‘acquire’ in the Housing Consumers Protection Measures Act 1998 meant ‘buying or obtaining ownership’. The court held that the primary meaning of ‘acquire’ is ‘come to possess something’. The suggestion that persons who have rented their places of permanent residence have not ‘acquired a home’ as … Continue reading

Evidence of sudden and accidental pollution rejected (US)

By Patrick Bracher (ZA) on July 3, 2019 Posted in Insurance

A corporation which operated two industrial sites found significant amounts of ground water contamination. Its attempt to get insurance cover on the basis that the pollution was sudden and accidental was unsuccessful because the evidence of its expert was rejected as not being based on sound methodology. The pollution exclusion therefore defeated the claim. On … Continue reading

Powers of CIPC to investigate a Companies Act related complaint

By Patrick Bracher (ZA) on June 25, 2019 Posted in General

The Supreme Court of Appeal made important findings regarding the powers of the Companies Commission to investigate a complaint. Where the complaint relates to the inaccuracy of the company records as to who was a director, the failure to ensure that the record was maintained accurately constitutes either an ongoing act or omission under section 219(1)(a) … Continue reading

Cyber risk warnings for insurers

By Patrick Bracher (ZA) on June 18, 2019 Posted in Insurance

The cautionary warnings continue for insurers regarding the cyber risks that they underwrite. Although cybersure is seen as one of the major opportunities for the insurance industry, there are a number of risks including the increasing frequency of cyberattacks, the difficulty in pricing for the risks, and the fact that existing policies, including liability and … Continue reading

The elements of defamation

By Patrick Bracher (ZA) on June 11, 2019 Posted in General

The Johannesburg High Court discussed the balance between the constitutional right of freedom of expression and the required respect for inherent dignity ‘to all human beings’. The defendant argued the allegedly defamatory statements made about the plaintiff were true and in the public interest. It is for the defendant in a defamation claim to establish … Continue reading

When the Master compiles a panel of liquidators it is administrative action

By Patrick Bracher (ZA) on June 9, 2019 Posted in General

One of the functions of the Master of the High Court is to compile a panel of suitable candidates to be appointed as liquidators or trustees of insolvent persons and to remove people who are unsuitable. The adding or exclusion of persons from the panel is administrative action for the purposes of the Promotion of … Continue reading

Exclusion of liability in carriage document for deck cargo

By Patrick Bracher (ZA) on June 9, 2019 Posted in General

Where a bill of lading provided that ‘the carrier shall in no case be responsible for loss of or damage to the cargo, howsoever arising … in respect of deck cargo’ the English High Court held that the provision effectively excluded liability for deck cargo which was lost overboard from the vessel in heavy seas. … Continue reading