Aneco Reinsurance Underwriting Limited v Johnson & Higgins Limited

ANECO REINSURANCE UNDERWRITING LIMITED (IN LIQUIDATION) (A BODY INCORPORATE UNDER THE LAWS OF BERMUDA)

It is now accepted that no such reinsurance was available and that the appellants did not advise to that effect. In failing to make the necessary inquiry as to the market's assessment of the risk and to advise that such reinsurance was not available, the appellants were in breach of their duty. I agree with Lord Lloyd and Lord Steyn that the scope of the duty in this case is not the same as in South Australia Asset Management Corporation v York Montague Ltd [1997] AC 191 . It is to use Lord Steyn's phrase on the other "side of the line drawn in SAAMCO ".

I agree with Lord Lloyd and Lord Steyn that there is no justification for limiting the damage to the loss flowing from the failure to obtain the $11m reinsurance: it is the whole loss resulting from their entering into the insurance cover when no reinsurance was available.

The Court of Appeal on this came to the right conclusion and I would dismiss the Appeal.

I have had the advantage of reading in draft the speeches of my noble and leaned friends, Lord Lloyd of Berwick and Lord Steyn. I agree with them and for the reasons which they have given, I, too, would dismiss the appeal.