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18 January 2007 / Ling Ong
Issue: 7256 / Categories: Features , Insurance / reinsurance
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Company abuse

Ling Ong analyses an exceptional case of attribution in the context of an insurance policy exclusion clause

It is often unclear when acts of individuals can be attributed to an insured, but the Court of Appeal addressed this in the context of an exclusion clause under a liability policy in KR v Royal & Sun Alliance plc [2006] EWCA Civ 1454, [2006] All ER (D) 42 (Nov).

The action arose from various claims concerning physical and sexual abuse suffered by residents in children’s homes, in north Wales, owned and operated by Bryn Alyn Community Holdings Ltd. The homes were originally started up by John Allen. After the company took over the homes, Allen remained a director and chief executive until his resignation in October 1991; he was the majority shareholder until 1989.

In 1995, Allen was convicted of six offences of indecent assault on young male residents between 1972 and 1983. Civil proceedings were subsequently brought against the company by a number of ex-residents claiming abuse—in some cases by Allen, in other cases by heads of the individual homes, team leaders or other residents.

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