Allianz Insurance has helped their customer win a high-profile case in the High Court that would have put their business in jeopardy had it gone the other way.
In the much publicised "faulty bed sex claim", the claimant was seeking seven-figure damages from an incident involving a bed supplied by our customer, Beds are Uzzz. When costs from both sides are factored in, the total figure would have reached approximately £12 million – well beyond the limit of indemnity on the policy.
Laura Bottomley, Claims Specialist, Allianz Insurance plc, explains:
Our limit of indemnity was £2 million so this is the most
we would have ever paid. The risk therefore was that the Insured’s
limited company would have to pay assets out of their business to make
up the deficit due to lack of any other insurance policies owned by the
Insured. His business would have folded as assets did not exceed £100k.
"The Insured therefore had a lot to lose and accepted that, by running the case to trial, he could lose his business. He therefore needed a great deal of support throughout the process.
"There was opportunity prior to trial to consider a compromise settlement but on the basis that the evidence was strong, we rejected this approach and refused to come to the negotiating table."
The case centred on the claim that the bed was "defective" and that a "difference in divan levels […] caused her arm to slip off the bed or otherwise for her to lose her balance", resulting in the claimant’s life-changing injuries. Consequently, the defendant, our customer, had been charged with liability for a product defect under The Consumer Protection Act 1987, as well as breach of contract and negligence.
Statements and records made immediately following the incident (such as the ambulance report) all described Ms Busby as kneeling on the edge of the bed when she fell backwards, with no mention of a defect in the bed. Over two years post-accident, it was stated by witnesses for the claimant that "the bed appeared to give way causing her roll backwards off the bed" and then just over a year on from that, "the claimant sat back and the bed moved".
The judge commented on the inconsistencies in the recollections given by the claimant and her witnesses during the trial and statements and records made at the time of the incident. He also considered the claimant’s expert witness evidence, supporting the more recent statements, "most unconvincing". He rounded off his summary of the cause of the accident by saying:
Having carefully considered the totality of the evidence,
[…] I am satisfied that this was a simple but tragic fall; she simply
overbalanced probably in part because she was sitting on a mattress as
opposed to a firm surface and underestimated the amount of give under
her body. So such "defect" as there was played no part.
"[…] For the avoidance of any doubt I should add that I am satisfied that any slope also did not play any part in the fall."
- Paragraphs 127 and 129, Busby vs Berkshire Beds judgment
In relation to the claim that the bed was "defective", it was ruled that "it is difficult to see how the one degree slope could possibly constitute a defect for the purpose of the Act" and, additionally, that the incident was not reasonably foreseeable. In fact, earlier in his summary, the judge wrote:
neither she nor Mr Marshall noticed anything untoward about the bed. Given that [it is being claimed] there was […] a ridge along the centre of the bed where the divans joined [that created a] 40mm difference in level at the foot; this is somewhat surprising and shows sensitivity far removed from that of Hans Christian Andersen’s princess."
- Paragraph 59, Busby vs Berkshire Beds judgment
Our Major Loss Team and DAC Beachcroft, who were acting as our solicitors, provided support to our policyholder, Richard Manders, throughout the trial. Upon hearing the result, Richard expressed "a sense of tremendous relief" and said:
The support you have given me was outstanding, and the legal team you instructed could not have been better. At every stage Paul Parke [partner solicitor of DAC Beachcroft] has kept me informed and given great guidance."
Bob Dawson, Major Loss Team Manager, Allianz Insurance plc, reflects:
The Major Loss Team is committed to supporting our customers in their times of greatest need, such as this claim with disputed allegations. Our major loss handling philosophy is centred on a collaborative and customer-focused approach."
Support for the customer extended to providing media advice from the Allianz in-house PR team, which included drafting media statements and advice on how to manage the media to get the best possible outcome whether the case had been won or lost.