Axis Speciality Europe SE v Discovery Land Company LLC & Ors
[2024] EWCA Civ 7
AXA Insurance UK PLC v Fatjon Kryeziu & Ors
15 December 2023
[2023] EWHC 3233 (KB)
High Court
An insurance company sued people for making fake accident claims. A judge threw out the case because the company hadn't followed all the rules properly. A higher court said the judge was too strict and that the case should go ahead, but with penalties for the insurance company’s mistakes.
Key Facts
- •AXA Insurance (appellant) paid out on fraudulent insurance claims related to a road traffic accident.
- •AXA subsequently discovered the fraud and sued the respondents for deceit and conspiracy.
- •AXA withheld evidence of a Facebook friendship between the respondent driver and the van driver until after witness statements were exchanged.
- •AXA sought to amend its claim to include this evidence and other points, but the judge refused.
- •A settlement agreement was reached between AXA and some respondents, but the dispute with the main respondent continued.
- •The lower court judge struck out AXA's claim and declared it estopped from seeking adverse findings against certain respondents.
- •AXA appealed these decisions.
Legal Principles
To plead fraud, a party must plead the facts relied upon to establish each element of the tort, including the falsity of the representation. It is not necessary to plead the true underlying facts if unknown.
Three Rivers District Council and others v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1; Kasem v University College London Hospitals NHS Foundation Trust [2021] EWHC 136 (QB); Michael Wilson & Partners Ltd v Emmott [2022] EWHC 1481 (Comm); CPR 16.4(1)
Standard disclosure requires a party to disclose documents within its control relevant to the claim, even if those documents are obtained from a third party, and it is intended to use the documents to support its claim.
CPR 31.6(a), CPR 31.6(b)(ii), CPR 31.8(1), 31.8(2)(a), CPR 31.10
Deliberate breach of court orders and rules relating to disclosure requires relief from sanctions. The test considers the seriousness of the breach, the reason for it, and the need for a just outcome. The court will consider whether relief from sanctions would cause the respondent undue prejudice.
Denton v White [2014] EWCA Civ 906; CPR 1.1(2)(f)
The interpretation of a settlement agreement depends on the parties' intentions, as objectively ascertained from the words used and the relevant background context.
Rainy Sky SA v Kookmin Bank [2011] UKSC 50
The court exercises discretion in granting permission to amend pleadings. Factors to consider include the lateness of the application, the quality of the explanation for the delay, and the consequences of granting the amendment. A purposive approach is required in the context of the overriding objective, but deliberate breaches of rules cannot be condoned.
CPR 52.21(3); Commissioner of Police of the Metropolis v Abdulle [2015] EWCA Civ 1260
It is unfair to make serious imputations or findings against a party who has not had a proper opportunity to respond.
Vogon v Serious Fraud Office [2004] EWCA Civ 104
Outcomes
Appeal allowed; claim not struck out; permission to amend granted (except for exemplary damages); declaration of estoppel set aside.
The lower court erred in its assessment of the adequacy of the pleadings, the application of the disclosure rules, the impact of the settlement agreement, and its exercise of discretion regarding the amendment application. The judge’s decision to strike out the claim was based on flawed premises about the pleadings and the consequences of granting the amendments.