Complex Claims – A case study on successful defence of a liability claim
“We understand how much a claim impacts your business, both financially and emotionally. We provide Dedicated Specialists in each sector to offer in-depth knowledge and understanding to help you define tailored protocol for claims management.”
Our Insured, John Guest, opened their factory doors in 1961, manufacturing and designing plumbing parts and systems. Until recently they were a family owned business but in 2018 were acquired by RWC (UK) Ltd. However they remain incredibly proud of their company and products. The claims made against them usually contain allegations of defective products – the majority are successfully defended.
On the 19th April 2018 our Insured received a Letter of Claim from DACB acting on behalf of Allianz, who insured the Leasehold owners of a new development of 51 apartments over 9 floors. There had been an escape of water in July 16 in a wall cavity on the 9th floor and the water had run own through the property causing significant damage. DACB alleged that a John Guest connector had failed as a result of a crack forming during manufacture and estimated the loss at £280,000.
Having built up a great relationship with the Insured over a number of years we were able to discuss the product used and quickly ascertained that the part supplied was for use on a cold water supply but had been fitted to a continuously recirculating hot water ring main. This is a system which is always pumping hot water and John Guest and RWC (along with some other manufacturers of plastic plumbing systems) advises against the use of its products for these systems - specifically approved fittings need to be used. DACB maintained that there was a manufacturing defect and that this was the cause of the leak so we agreed to a joint inspection and instructed Burgoynes, who are well aware of our Insured’s history and processes.
Following the inspection we advised that the overtightening of the joint and the use of the product on the ring main were the cause and that there was no liability on the part of John Guest. DACB disagreed and suggested again that the part had a defect that caused the escape of water and that they had a claim in tort against our Insured. Our expert recommended further destructive testing and obtaining comparator fittings from the system. DACB raised further arguments and we used the knowledge of the engineer and the Insured to respond continuing to offer further testing, although this would be limited to the actual part as the development had been sold. We heard nothing for 5 months and then received a letter suggesting a WP discussion in view of the impasse between our experts. I refused - there was no evidence of a manufacturing defect and other parties would have to be involved (the plumbers who fitted the system for example).
I have just received the following from DACB ‘Please note that we are instructed to close our files and shall no longer pursue this recovery action.’
This great outcome is a result of knowledge of our Insured’s business and team, a great Insured who is always willing to be involved, instruction of the right expert and clear and detailed responses to claimants solicitors. A great team effort!
RSA Complex Claims Unit
A journey through Major Claims with our expert Nigel Probert
“Delivering a first-class transparent claim service to our customers to provide minimal disruption to their business and get them back on track quickly.”
A major client suffered a fire in September 2018 at their manufacturing and warehousing facility in Italy. The fire started on the roof, the site of a solar farm and caused contamination to production facilities and finished stock.
Nigel Probert of RSA’s Major Damage team had established a relationship with the client during a pre-loss scenario session held with them earlier following inception. Nigel visited the loss site a couple of weeks post fire and met with the Insured's Italian team as well as the Group Insurance Manager, who he'd met at the pre-loss session previously. Good communication was opened up, and whilst the claim was large, the property damage element was largely settled without dispute or disagreement in the sum of €6.5m within 12 months of the loss. The first €5.9m were paid within 5 months from the incident.
During the meeting, the Italian Team had advised that there would be minimal, if any loss of sales due to the supply to customers from other locations, but at the conclusion of the Property Claim, a Gross Profit claim of €1.4m was presented. Engaging the adjuster and forensic accountants, and taking the Group Insurance Manager on the journey we considered and challenged the claim as presented. We could see that it would make sense there was some loss, but the trading figures did not support anything in the order of the level of claim.
Having taken the Group Insurance Manager through our considerations we presented him with what we thought was a reasonable compromise given the evidence presented in the sum of €430,000. This was considerably less than the level of claim, but due to transparency and the level trust established the Group Insurance Manager advised the local operation that what we proposed was reasonable and the claim was concluded on that basis.
Not only did settlement of the BI claim at a much reduced value create no hard feelings for our customer, they emailed Nigel and the loss adjuster at the conclusion of the claim:
"At this point I would like to thank you both for your support, advice and patience since September 2018, it was much appreciated. Remaining at your disposal. Kind regards, Group IM”
RSA Major Claims Unit