Nockolds defended a manufacturer of components used in medical devices from a product liability claim after its insurer withdrew cover haven given little notice and what appeared to be unsatisfactory reasons for deciding that the policy did not cover the losses that had been incurred.
We were instructed shortly before a case management hearing in the High Court and successfully made an application for the product liability claim against our client to be paused so that our client could try to negotiate with the claimant and prepare and issue a claim against its insurer to obtain a court order that cover had been wrongly withdrawn. We also arranged a confidential discussion with the claimant but a settlement could not be reached and the claimant refused to agree to extend the stay in the proceedings beyond the period ordered by the Court.
Prior to our instruction, the product liability claim had been defended by a firm appointed on our client’s behalf by its insurer but no steps had been taken to bring claims against companies further down the supply chain which had imported the defective raw materials or the wholesaler which had made representations about their content.
The client had limited financial resources and struggled to simultaneously defend the product liability claim, to try to obtain a declaration against its insurer and also bring additional claims against the other parties in the supply chain. We therefore arranged a mediation involving the manufacturer of the medical devices, the insurer and other companies in the supply chain to try to settle the claim.
The case settled at the mediation with contributions being made towards the final settlement by our client’s insurer and the insurers of the other companies in the supply chain. Managing three sets of proceedings was challenging but the settlement reflected the culpability of other parties who had failed to check the quality and composition of the materials that they were importing or selling. It was particularly gratifying to have secured a contribution from our client’s insurer given the manner in which cover was withdrawn shortly before a hearing.
If you need any advice about whether cover might be available under a policy or have had a claim denied, please contact Alexander Haddad in our Litigation Department.