Devereux insurance team get judgment in toxic sofas litigation
The Commercial Court has given judgment on the preliminary insurance aspects of the ‘Toxic Sofas’ litigation: Horwood v Land of Leather (in administration) & Zurich Insurance plc [2010] EWHC 546 (Comm). The claimants brought personal injury claims arising from sofas purchased from retailers such as Land of Leather. Some claimed against Zurich Insurance (represented by Colin Edelman QC and Andrew Burns instructed by Beachcroft) under the Third Parties (Rights against Insurers) Act 1930. Mr Justice Teare decided the preliminary issues in favour of the insurer. He held that the insured had reached a binding settlement with its Chinese suppliers without the knowledge or consent of the insurer and he rejected the argument that the agreement was unenforceable on the grounds of lack of consideration. The Judge accepted the insurer’s construction of the Claims Control Clause which was a condition precedent of the insurance policy. He also addressed the thorny issue raised in some of the textbooks surrounding the correct definition of the implied term of an insurance policy relating to the protection of the insurer’s rights of subrogation. The Judge preferred the formulation put forward by Zurich that there was implied term of an insurance policy that an insured must act reasonably and in good faith with due regard to the insurer’s interests and rights of subrogation under the policy. The decision has been reported by BBC News and The Guardian. The claimants sought permission to appeal.
In all, three Devereux barristers are involved in this litigation: one of The Lawyer magazine's Top 10 cases of 2010. The claims made in the Linkwise/Eurosofa DMF group litigation came to prominence following a series of reports on BBC’s Watchdog. Thought to be the largest group litigation about a consumer product in British legal history, the claimants are claiming more than £10m from 14 high street stores, including Land of Leather, Homebase and Argos, after they allegedly sold contaminated leather furniture. Colin Mendoza is instructed by Bond Pearce LLP for Creation Consumer Finance in relation to some of the underlying personal injury claims.
The case attracted extensive media coverage.
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