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UK: Court Refuses to Imply Concept of Dominant Purpose into Insurance Policy Wording

November 5, 2009 8:22 AM | Print this page
In Wickham Van Eyck (a firm) v Norwich Union Insurance Limited [2009] EWCH 2625 (Comm), the High Court held that the defendant insurer was bound to indemnify the claimant firm of architects under the terms of an insurance policy in respect of a dispute between the claimant and another firm of architects.  The policy provided cover for legal costs and expenses in a number of contingencies, including those incurred in a contractual dispute arising from an agreement or alleged agreement entered into for the provision of goods and services.  The court held that the claimant's basis of claim was an agreement to provide services as part of a joint venture and therefore satisfied the contingency in question, subject to the defendant's right, as provided by the General Cover Provision, to withhold an indemnity if advancing the claim in court was unlikely to succeed.  The court held that it was not necessary for the provision of services to be the "dominant purpose" of the agreement which was in dispute, as it was undesirable to introduce such a concept by implication into the policy wording.