Supreme Court decision provides cause of damage guidance

How We Helped

In the case of R&S Pilling t/a Phoenix Engineering (Respondent) v UK Insurance Ltd (Appellant) [2019] UKSC 16, Keoghs acted for the Appellant in respect of an appeal from [2017] EWCA Civ 259.

Mr Holden accidentally set fire to his car while repairing it at the Respondent’s premises. The fire caused £2m worth of damage. The Respondent’s insurer paid out for the damage and pursued a recovery against the Appellant who were Mr Holden’s motor insurer at the time of the fire. They pursued a claim on the basis that Mr Holden was covered by the third party liability cover contained in his motor policy. The Appellant disputed this.

The High Court held that the motor policy did not cover Mr Holden as the accident had arisen out of his negligent repair and not his use of the vehicle. The Court of Appeal allowed his appeal as the cover provided by the motor policy did not comply with the law and should be read to mean “we will cover you for your legal responsibility if there is an accident involving your vehicle”.

The Supreme Court unanimously allowed the appeal. They considered that Mr Holden’s accident was not covered by the third party liability cover under the motor policy because the vehicle was not being used when it was being repaired on private property. Also, although the repairs may have arisen out of the use of the vehicle, the damage to the Respondent’s property did not.

This was the first time that the higher courts had to consider the extent to which a motor policy should cover the “use” of a vehicle and if this included its repair. The decision provided clear guidance that the repair of a vehicle on private property is not “use” and when deciding if there is cover the courts should look at what has caused the damage to property being claimed.

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