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Introduction
I am delighted to introduce the latest edition of our Insurance & Professional Risks Annual Review which explores the key decisions and developments impacting the insurance sector from 2025. The Review provides an overview of the most relevant cases and developments and, as always, there are links to our more detailed analysis on our insurance blog: HSF Insurance Notes. If you subscribe to the blog, you can keep up to date with our articles as they are published, as well as episodes of our podcast series: Insurance Bites.
In Insurance & Reinsurance cases, we explore the plethora of decisions coming out of the English courts in 2025. A key judgment of the year was that of Mr Justice Butcher in the Russian aviation litigation following the "mega trial" which combined the claims of multiple aircraft lessors against their insurers for aircraft lost in Russia after the invasion of Ukraine. This firm represented the lead claimant, AerCap, the world's largest aircraft leasing company, who was awarded over US$1 billion from its War Risk insurers by the court. In the year which marked the 10th anniversary of the Insurance Act 2015, a number of decisions were handed down on issues relevant to the Act including two Court of Appeal decisions: one on the duty of fair presentation and the requirement for a reasonable search, the other on the categorisation of representations and warranties of information provided by the insured and how they interface with the obligations and remedies under the Act. The Court of Appeal also handed down a significant decision on the "red hand rule", now to be referred to as the "onerous clause doctrine", as well as the latest decision in the series of cases relating to Covid-19 business interruption claims following the FCA Test Case in 2020. The High Court was also busy with cases considering the construction of policy terms, the Third Parties (Rights Against Insurers) Act 2010 and a rare decision on the operation of follow the settlements and claims co-operation clauses in reinsurance policies.
Still on the topic of insurance, this year's Review also includes two spotlight articles. One on the complex interaction in a construction context between claims between the principal and contractor and claims with insurers: Damage, Defects and Delay – the interplay between insurance and construction claims; the other on Warranty & Indemnity (W&I insurance) and what reported cases and market experience tell us about the performance of this product: W&I being tested in claims - coming of age or growing pains? A global perspective.
The Professional liability section considers a number of judgments which have been handed down in 2025 including on loss of a chance and the misuse of AI in court proceedings. It also explores proposals to amend the pensions legislation and the potentially significant overhaul of solicitors' regulation.
Our Product Liability section looks at the new Product Regulation and Metrology Act 2025 and the topical issues of autonomous vehicles and PFAS or 'forever chemicals'.
In Health & Safety, we explore a number of important cases from 2025 involving prosecutions for health and safety offences and corporate manslaughter, as well as enforcement of the Building Safety Act 2022.
Our General Interest section looks at key developments in the areas of class actions, litigation funding, access to court documents, privilege and the use of AI among others – important developments to be aware of for those litigating in the English courts or funding or insuring such litigation.
Finally, in Insurance Regulation, we give an overview of the evolving regulatory landscape for the UK insurance sector.
A huge thanks to the team here at HSF Kramer for their contributions in putting this Review together. We have had another busy and successful year and it is privilege to be working on cases which are making the law in this area. Thank you also to our clients and contacts for your continued support and for entrusting us with your most significant matters.
Alexander J Oddy
Head of Insurance & Professional Risks
alexander.oddy@hsfkramer.com
Insurance & reinsurance cases
Insurance disputes have continued to keep the English courts busy in 2025 with the first significant decision in the Russian aviation litigation together with a range of judgments covering issues under the Insurance Act 2015, the Third Parties (Rights Against Insurers) Act 2010 plus a rare reinsurance decision.
Russian Aviation Litigation
2025 was a crucial year for the insurance industry as it contended with the fallout from Russia's invasion of Ukraine. Following the invasion, global litigation was launched against insurers and reinsurers to mitigate the loss of approximately 500 Western-owned aircraft which had been on lease to Russian airlines and were stranded in Russia.
In June 2025, the High Court handed down judgment in the Russian Aircraft Lessor Insurance Policy Claim following the "mega trial" which combined the claims of multiple lessors against their insurers before Mr Justice Butcher. Herbert Smith Freehills Kramer represented the lead claimant, AerCap, the world's largest aircraft leasing company, who claimed from its insurers the loss of 116 aircraft and 23 engines. The High Court found that all AerCap assets were lost and covered under the War Risks section of its insurance policy. Factoring in prior settlements, AerCap was awarded USD 1.035 billion from War Risk insurers: High Court finds in favour of Lessors in Russian Aircraft Lessor Policy Claims. In addition, the High Court awarded AerCap over USD 240 million in interest and made interim costs orders.
The majority of War Risk Insurers have now applied to the Court of Appeal for permission to appeal elements of the High Court judgment and the consequential judgment addressing interest. The appeals do not include Mr Justice Butcher's findings on causation/peril such that there is no prospect that All Risks Insurers will be found liable in England for these losses under the lessors' policies. At the time of writing, the Court of Appeal's decision on both sets of applications for permission to appeal is awaited: Russian Aircraft Policy Claims: Update on appeal and costs.
There are many other parallel claims on foot in the Commercial Court involving aircraft in Russia under (re)insurance policies taken out by the Russian airline lessees (Operator Policies) with trial scheduled for October 2026.
Insurance Act
2025 marked the 10-year anniversary of the Insurance Act 2015 (the Act) receiving royal assent, which paved the way for the most significant reform in insurance law in the UK in over 100 years.
To mark the 10th anniversary of the Insurance Act 2015 and to see what impact it has had on both the placement of policies and the handling of claims from the policyholder perspective, we worked with Airmic (the UK Association of Risk Managers) on a survey of risk managers. Herbert Smith Freehills Kramer also became the first and only law firm to be an Airmic Senior Partner.
The key findings of the survey were:
- The Act appears to have had a largely positive impact. 64% of survey respondents thought that the impact of the Act had been positive, and 85% reported no change in the number of disputes with insurers since the introduction of the Act.
- However, policyholders should continue to be mindful, particularly when negotiating policy wordings, to ensure that conditions precedent and warranties are kept to a minimum and are clearly drafted and labelled.
For more detail see our article which includes a link to the full survey results: 10 years of the Insurance Act 2015: Airmic survey report published in association with HSF Kramer.
This year, a number of cases have reached the courts on various issues relevant to the Act, including two Court of Appeal decisions.
- Scotbeef Ltd v D&S Storage Ltd (in liquidation) [2025] EWCA Civ 203 is a reminder of how significant the effect of breach of a condition precedent can be on a policyholder's ability to claim under a policy. The Court of Appeal considered the proper categorisation of representations and warranties relating to information provided by the insured to the insurer prior to inception of the policy. The Court of Appeal found that the relevant clauses were future warranties (a promise by the insured that something will or will not be done) as well as being conditions precedent (because they were expressly labelled as such). As the insured was in breach of those warranties (which were also conditions precedent), the insurer had no liability. On the facts of this particular case, the various policyholder protections introduced by the Act (such as proportionate remedies for breach of the Duty of Fair Presentation, making warranties into suspensive conditions and the introduction of section 11) did not assist the insured: Breach of warranty and condition precedent means no liability for insurer.
- In Delos Shipholding SA & Ors v Allianz [2025] EWCA Civ the Court of Appeal considered the duty of fair presentation under the Act and is one of the first cases to consider the requirements for a reasonable search of information held by the insured as part of that duty. The Court of Appeal also had to consider who formed part of the "senior management" of the company for the purposes of the duty of fair presentation under the Act. In this case, a sole nominee director, who exercised his powers as a director in accordance with instructions received from the company's beneficial owners and who exercised no independent judgement and made no decisions, was found not to be "senior management". The case shows that this will ultimately depend on the factual circumstances to determine if the statutory test under Section 4(8)(c) of the Act has been met: Court of Appeal considers duty of fair presentation under the Insurance Act. The duty of fair presentation was also considered in Clarendon Dental Spa LLP v Aviva Insurance Ltd & Zurich Insurance Limited [2025] EWHC 267 (Comm) which is yet another judgment concerning the adequacy of disclosure by the insured of previous matters connected to insolvency. Insurers denied cover and argued that the insured was in breach of the duty of fair presentation for failing to disclose the insolvency of companies that shared a common director with the insured entities. Insurers had asked insolvency questions relating to directors or partners of the policyholder only. The Court found that the insured had answered these questions accurately and the questions did not have the wider interpretation that insurers had argued for (which would have meant that the insolvency of the other companies should have been disclosed). Further, the insurers had waived any right to disclosure of information about the insolvencies of other companies by asking the insolvency questions in the terms they had. This case is another reminder that insureds and their brokers should take great care in providing information about insolvency matters to insurers prior to inception. Insurers that are concerned to know about insolvency matters concerning companies unrelated to the insured must ask questions clearly stating that is the information they seek: The duty of fair presentation and the disclosure of matters connected to insolvency (again)
There was also a decision from the Singapore High Court in April 2025 (Oversea-Chinese Banking Corp Ltd v Argoglobal Underwriting Asia Pacific Pte Ltd [2025] SGHC 82) which will be of interest to readers of this Review for its consideration of the application of section 11 of the Act and what constitutes a term "defining the risk as a whole": Singapore High Court considers section 11 of the Insurance Act 2015
Section 11 of the Act prevents the insurer from relying on breach of a term by the insured if the breach could not have increased the risk of loss in the circumstances in which that loss occurred. This applies to breaches of warranties and other terms which would tend to reduce the risk of loss of a particular kind or loss at a particular location or time but not to terms which define the risk as a whole.
The Singapore High Court accepted the insured's argument that terms defining the risk as a whole were those which were "so fundamental and extensive that they delimit the very risk that the insurer is underwriting", such as for example geographical and usage restrictions. The Court did not accept the broader interpretation contended for by insurers that other than "blatantly irrelevant warranties", all other warranties define the risk as a whole.
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