R&S Pilling T/A Phoenix Engineering (Respondent) v UK Insurance Ltd (Appellant)
Case ID: UKSC 2017/0096
Whether on its true construction a policy of motor insurance covers extends to liability for damage to the property of third parties because of fire caused by repair work to the car when it is immobilised.
In June 2010, Mr Holden, a mechanical fitter employed by Phoenix Engineering, was working at Phoenix Engineering’s premises. He successfully obtained his employer’s permission to use the loading bay at the premises to perform some work on his car in the hope that this would enable it to pass the MOT. He intended to weld some plates onto the underside of the car to deal with corrosion. While he was welding, sparks from the welding ignited flammable material inside the car including the seat covers. The fire spread and set alight some rubber mats lying close to the car. The fire then took hold in Phoenix Engineering’s premises and the adjoining premises, and substantial damage was caused before it was extinguished. Phoenix Engineering’s insurer, AXA, paid out to Phoenix Engineering and the owner of the adjoining property more than £2m. AXA, being subrogated to Phoenix Engineering’s rights, made a claim against Mr Holden (in Phoenix Engineering’s name) for an indemnity in respect of the sums paid. UK Insurance Limited, which provides Mr Holden’s motor insurance cover, sought a declaration that it is not liable to indemnify Mr Holden. Phoenix Engineering counterclaimed for a declaration that UK Insurance Limited is liable under the terms of the motor insurance cover. The High Court, at first instance, ruled in favour of UK Insurance Limited. The Court of Appeal reversed this decision, ruling in favour of Phoenix Engineering.
UK Insurance Limited
R&S Pilling T/AS Phoenix Engineering
Lady Hale, Lord Wilson, Lord Hodge, Lady Arden, Lord Kitchin
Hearing start date
13 Dec 2018
Hearing finish date
13 Dec 2018