Notification—Euro Pools v RSA [2019]

This case concerns the 2006-07 and the 2007-08 policies and considers notification of claims.

Euro Polls specialised in building pools where the floor can be raised or lowered and partitioned using a booms system. In February 2007, it discovered there was an issue with the booms system. It notified its insurer RSA but said it did not anticipate a claim.

In May 2008, Euro Pools told RSA that its attempts to resolve the issue using air bags wasn’t working and that it was moving to a hydraulics system. It claimed the costs of this under the mitigation of costs section of the policy. The issue to be resolved was which policy was to respond to this. Did the 2008 expenditure arise from the notification in 2007 or did it arise from the 2008 claim made to pay for the hydraulics system?

At first, it was held that the latter policy responded. This was good news for Euro Pools, who had almost exhausted its indemnity under the 2007 policy. However, RSA appealed, and the Court of Appeal disagreed and held that the 2008 claim arose out of the 2007 notification. This worked in the insurers favour, because the losses exceeded the indemnity, but it highlights the difficulty with notification. Blanket notifications are disliked by insurers for being too far-reaching.

This case validates the decision to make an early notification where the issues are not clearly defined, and the insured may not have all the details of what the problem is and what the consequences might be. However, this case is unusual in that the early notification worked in favour of the insurer, rather than the insured.