help i dont know what to do. they want £5000.

huckster

Anihilator

I disagree. 1 day or 3 months. The point of remoteness when looking at liability is the issue and not the contract.

I can see where you are coming from. No point debating this, we just do not agree with a point of law. You think the contract makes the policyholder liable and I say that liability can only be decided by the courts looking at the law.

It is in the best interests of the OP to obtain legal advice.

Anihilator

huckster wrote: »

Anihilator

I disagree. 1 day or 3 months. The point of remoteness when looking at liability is the issue and not the contract.

I can see where you are coming from. No point debating this, we just do not agree with a point of law. You think the contract makes the policyholder liable and I say that liability can only be decided by the courts looking at the law.

It is in the best interests of the OP to obtain legal advice.

Why do you feel remoteness applies?

raskazz

huckster wrote: »

Raskass

I think you are wrong on this point.

If you took your argument to an extreme position, you might then think about this a little more.

Say you sold a car yesterday, but had not managed to phone the Insurers to cancel the cover. The owner then today crashed the car into a coach load of A-list celebrities, killing them all. They were at fault for the accident as they had lost control of the car due to excess alcohol. They had not arranged insurance for the car.

From your point of view if the Insurers paid out £2 million for liability, as your insurance was the only cover in force, you would be liable for this. So you would have to sell your house and possessions to pay the Insurers, when you had absolutely no control over the drivers actions or the accident.

This issue is about liability and not contract. A court using the law would decide whether you could be held liable. It is about 25 years since I studied this area of law, but I am sure that if you consulted someone with up to date knowledge, they would say that remoteness is a relevant issue to deciding on liability.

I think you're barking up totally the wrong tree. It is true that the policyholder has no control over the actions of the driver but remoteness cannot possibly apply to the policyholder's breach of contract (which is the trigger for the right of recovery) - it is entirely within the policyholder's control to inform the insurer of the sale of the vehicle. If the policyholder had fulfilled their obligations under the contract then the insurer would have escaped liability entirely. To say that it is not an issue of contract law is absolute nonsense. It is entirely an issue of contract law, i.e. whether the OP is liable to repay the insurer its losses as per the contract terms.

I cannot see how remoteness possibly applies. In a nutshell, it is the driver who caused the accident but it is the policyholder's breach which caused the insurer to incur their monetary loss related to the accident.

Clearly if it was the third party suing the OP then remoteness would apply, but it is not the third party - it is the OP's insurer suing the OP for breach of contract.

huckster

Raskass

One of the ways in which the law limits liability is through the concept of remoteness.
The court/tribunal asks the following question: as at the date of the contract were the losses being claimed foreseeable by the parties as likely to be incurred if the contract was breached? If the answer is ‘yes’, then they are recoverable. If the answer is ‘no’, then they are not recoverable.The law in this area is still dominated by the case
of Hadley v Baxendale (1854) 9 Exch 341. The case identified two circumstances (known as the two limbs) in which losses could be recovered as contractual damages for breach:
1. those ‘such as may fairly and reasonably be considered
either as arising naturally’, ie according to the
usual course of things from such breach of contract
itself; or
2. those ‘such as may reasonably be supposed to have
been in the contemplation of both parties, at the
time they made the contract as the probable result
of the breach of it’.

My case is that the policyholder could not have forseen that his Insurers would accept liability for payment to a 3rd party for:
1) A car he no longer owned and therefore no liability for.
2) An accident he had no involvement in

Ultimately, it will up to the courts to decide on this as I take it the OP is not going to pay them. I doubt it will get that far, as the Insurers legal department will tell them not to pursue the OP.

raskazz

Whilst that is an interesting case (and does this not fall under the first of the two conditions anyway - it is very natural for such a right to arise from the normal course of a motor insurance contract), I think statutory provision (s.151 of the Road Traffic Act) will be the overriding factor, which specifically permits insurers to recover with no caveats.

In any case, if Hadley had specified a right of recovery clause in their contract (as the insurer has done), I'm fairly sure that the outcome would have been different. There is another difference in that Road Traffic Act liabilities are a matter of publicly available information, i.e. the law, and so are not so unforseeable.

huckster

Raskass

If you do your research on this subject, you will see that there is divided opinion amongst lawyers about this. Even publications by companies that specialise in this area of law, indicate that the 'remoteness' can overide any liability conveyed by Insurance contracts. BUT this can only be decided by a court.

The point I am making is that the Insurance contract and the RTA, do not overide any basic principles of law, which restrict the liability that the OP could be subject to.

I will stick to my view that the OP cannot be liable for any event which they had no control over whatsoever.

"English case law contains detailed rules on which types of loss are recoverable and which
are not; the general principle being that a party should not be responsible for losses which
that party did not cause, or which are too ‘remote’ to be seen as arising from or related to
the breach or default at issue."

Anihilator

I do see where your coming from however I would suspect a judge would simply state that as the RTA makes insurers liable for cars they insure hence the OP by not terminating the insurance has failed in his duty.

As the RTA and the documents are very clear and open public information I doubt the OP's ignorance of the law would be seen as a defence for remoteness.

huckster

Anihilator

Remoteness is relevant to the liability.

The Insurance contract still being open for a car that had been sold 3 months earlier is really a red herring.

The only person Insurers can seek a recovery from is the driver of the car at the time of the accident.

Until someone comes along and sites relevant cases to disprove my opinion, I continue to believe that the OP cannot possibly be held liable.

Anihilator

huckster wrote: »

Anihilator

Remoteness is relevant to the liability.

The Insurance contract still being open for a car that had been sold 3 months earlier is really a red herring.

The only person Insurers can seek a recovery from is the driver of the car at the time of the accident.

Until someone comes along and sites relevant cases to disprove my opinion, I continue to believe that the OP cannot possibly be held liable.

This is completely false imo. Why;

The OP breached the contract which incurred costs to the insurer. Its simple law that parties can seek compensation for losses where a breach of contract/duty of care exists. This was even lined out to the OP in the insurance pack.

Secondly why does remoteness not apply;

1) Car accidents are common
2) Openly available documents and laws state that if an accident occurs the OP's insurance had to pay out in these circumstances
3) Hence by not notifying he left the insurer wide open to legal action.

huckster

Anihilator

I can see where you are coming from but I have a different opinion.

You can argue about the contract and the rights of his Insurers to recover their outlay. But I say that such rights to recover will be decided by the courts at the end of the day based on law.

The courts will have to decide if the policyholder by not cancelling the Insurance could have forseen that they would have been liable for any sums related to an event that they had no control over. I say due to the principle of remoteness that the Insurers would not be able to make the recovery from the OP.

No doubt at some point the OP will post back to advise us of the outcome.

If anyone can site any case law, where Insurers have been able to recover their outlay in a similar situation, please post the details.