Aspen Underwriting v Credit Europe Bank is, on its face, a marine and jurisdiction case. Look harder and it is one of the most consequential decisions for any UK insurance buyer with cross-border claims exposure, foreign clients, foreign property or international counterparties. The Supreme Court's ruling on the protective jurisdiction provisions of what was then the Recast Brussels Regulation, and on the limits of subrogation rights against assignees of the insured, sets the modern English starting point for two questions every PI claim of any size now asks: where will the claim be litigated, and whom can the insurer chase if it pays out.
For professional indemnity buyers the case is most directly relevant to firms with international clients (solicitors with overseas instructing parties, consultants and IT contractors with non-UK customers, design and construction professionals on cross-border projects, brokers and insurance professionals themselves) and to anyone whose insurer might want to sue a non-insured party after meeting a claim.
At a glance
- Court: Supreme Court of the United Kingdom
- Judgment date: 1 April 2020
- Neutral citation: [2020] UKSC 11
- Sector affected: All commercial insurance lines with cross-border exposure; relevant to PI buyers with foreign clients or counterparties; relevant to all subrogation issues.
- Practical impact: Confirmed that the protective jurisdiction rules in the Brussels Recast Regulation applied to non-insured assignees of insurance proceeds, and that subrogated claims against non-parties to the contract are constrained by jurisdictional rules.
The facts
The Atlantik Confidence was an oceangoing vessel that sank in the Gulf of Aden in 2013. The vessel and cargo were insured under separate policies. Aspen Underwriting and other London market insurers underwrote the hull policy. Credit Europe Bank — a Dutch bank — was named as a loss payee under the policy as it held a mortgage over the vessel.
After the casualty, the hull insurers paid out, in part to Credit Europe Bank as loss payee. They subsequently discovered, on their case, that the vessel had been scuttled — deliberately sunk by the master and chief engineer at the owner's direction. On that basis they sought to recover the indemnity paid. Among the recovery routes they pursued was a claim against Credit Europe Bank in the English courts, on the footing that the bank had received the proceeds by virtue of a forfeiture-style mechanism in the policy and on grounds connected with the wider fraud allegation.
Credit Europe Bank challenged the jurisdiction of the English court. The bank argued that it was domiciled in the Netherlands and that, under Section 3 of the Brussels Recast Regulation (the "protective" jurisdiction provisions for insurance), the insurer could only sue it in the courts of the bank's domicile — i.e. in the Netherlands — unless an exception applied. The insurers said that, as assignees of the insurance proceeds, the bank was not within the class of persons protected by Section 3; or alternatively that there was a valid jurisdiction clause in the policy that bound the bank.
The case worked its way to the Supreme Court on the jurisdictional points. The wider question — whether the Atlantik Confidence was indeed scuttled — was tried separately and the underlying findings of fraud are described in Aspen Underwriting v Kairos Shipping [2014] EWHC 3253 (Comm) and on appeal.
The legal issue
The principal legal question was the interpretation of the protective jurisdiction regime for insurance disputes in the Recast Brussels Regulation (Articles 10 to 16). That regime gives the policyholder, insured and beneficiary the right to be sued only in the courts of their domicile. Whether a non-insured assignee of insurance proceeds is within that protected class was the precise question.
Although the Brussels Regulation no longer applies in post-Brexit England and Wales for new proceedings, the principles continue to be relied on. They have been carried forward into bilateral arrangements and reflected in domestic doctrine on insurance disputes. The case also engages the broader subrogation regime under English law and the position of third-party beneficiaries — issues unaffected by the change in jurisdictional rules.
Within the Insurance Act 2015, the relevant background sections are section 13A ("s.13A") on the implied term as to timely claim payment, section 14 ("s.14") on remedies for fraudulent claims, and the residual common-law rules on subrogation preserved by section 16 (which governs contracting out).
The insurers argued the protective jurisdiction did not apply because the bank, as a commercial loss payee with no insurable interest in the casualty itself, was not the "weaker party" the protective rules were designed to protect. The bank argued it was a "beneficiary" within the regulation, and a sophisticated commercial party can still rely on the regime where it has been brought within it.
The decision
The Supreme Court (Lord Hodge giving the leading judgment) ruled in favour of Credit Europe Bank on the jurisdiction point. The protective jurisdiction provisions of the Brussels Recast Regulation applied to the bank as an assignee or beneficiary of insurance proceeds. The English court therefore had no jurisdiction over the recovery claim; the bank could only be sued in the courts of its domicile, the Netherlands.
The key paragraphs are at 35 to 43 of the judgment, which trace the structure of the protective jurisdiction regime and the policy underlying it. At paragraph 40:
"[T]he scope of protected persons under Section 3 of the Regulation is not confined to economically weaker parties in any narrow sense, but extends to those who in the structure of the insurance regime are treated as policyholders, insured or beneficiaries — including those who claim the proceeds of insurance as assignees or named loss payees."
The Court emphasised that the question was structural, not commercial. A sophisticated bank could still be a protected beneficiary if it stood in the position of an assignee of policy proceeds. The result was that the English forum was unavailable. The insurers had to pursue the recovery, if at all, in the Dutch courts.
On subrogation, the Court reiterated the principle that the insurer's subrogated rights are no greater than the rights of the insured. They are also constrained by the contractual matrix between insurer, insured and any third party with a stake in the proceeds.
The principle established
The principle in plain English is that who gets paid by an insurer matters for where the insurer can later sue. If an insurer pays out and wants to recover from a non-insured third party who received some or all of the proceeds, the protective jurisdiction rules (or their domestic descendants) may force the insurer to litigate in the third party's home court, not London.
That has two consequences for any UK insurance arrangement with international features. First, the choice of forum cannot be assumed. An English jurisdiction clause is not a panacea; it can be cut down by overriding statutory rules in EU and other regimes and by domestic doctrine. Second, the dynamics of subrogation are tighter than they look. The insurer steps into the shoes of the insured; it does not gain superpowers against third parties.
Beyond Brussels Recast, the underlying philosophy survives in English doctrine. Courts continue to treat policyholders, insureds and beneficiaries as protected by structural rules — both in jurisdiction and in remedies under the Insurance Act 2015.
What this changes for PI buyers in 2026
For UK PI buyers, Aspen v Credit Europe Bank affects four areas of practical conduct.
At proposal stage, identify any cross-border features of the firm's exposure. Foreign clients, foreign instructing parties, foreign counterparties, foreign property, foreign agencies, offshore subsidiaries — these are all material under s.3 and they all affect the jurisdiction analysis. Insurers will price differently for a firm with concentrated foreign exposure. After Aspen, jurisdiction is part of the underwriting picture.
At notification stage, capture the jurisdictional features of the circumstance at the point of notification. If the underlying matter is in a foreign court, or involves a foreign client, say so. Insurers may want to take steps early to preserve their right to defend or to control proceedings, and the territorial framework affects what they can do.
At claim stage, expect the insurer to ask hard questions about subrogation potential before settling. Where the prospective subrogation target is offshore, the insurer's calculus is different from a domestic recovery case. Sometimes that means slower decisions; sometimes it means terms or preconditions on settlement.
How insurers will use this case against you if you are not careful. Insurers cannot use Aspen directly to deny cover, but they can deploy it to slow recovery decisions and to argue for tighter notification and cooperation terms. Where a buyer fails to disclose international exposure at proposal stage, the case is part of the materiality argument: "had we known about your overseas client base we would have priced for the jurisdictional risk Aspen now highlights".
Five specific action points for the 2026 renewal:
- Disclose cross-border exposure in the s.3 fair presentation — clients, projects, counterparties, agencies, offshore subsidiaries.
- Check the policy's jurisdiction clause and confirm what it actually grips. English jurisdiction is not always available against non-English defendants.
- Capture subrogation rights at engagement with your clients — your retainer letter is now part of the insurance picture.
- Notify with jurisdiction in mind. Tell your insurer if the underlying matter is or could be heard abroad.
- Coordinate with counsel early on cross-border claims; ground lost on jurisdiction in the first month is rarely recovered later.
How Apex applies this in practice
We map cross-border features at every PI renewal — by client, project, counterparty and agency. Foreign exposure is disclosed in the s.3 presentation in a structured way that lets insurers price and lets us defend against later "you didn't tell us" arguments. At notification we flag any foreign-court or foreign-party feature on the notification letter itself. Where subrogation may be in play we coordinate early between the insurer's solicitor and the firm's own counsel to keep options open. Aspen is a quiet case in most claims but a loud one when the geography is wrong.
Related cases
- Young v Royal & Sun Alliance — fair presentation duty.
- Mutual Energy v Starr Underwriting — fair presentation defects.
- AIG Europe v Woodman — aggregation; relevant where cross-border claims cluster.
- MS Amlin v King Trader / Solomon Trader — s.13A late payment damages.
- Bridgehouse Marketing v Wachsmann — fair presentation in PI.
FAQs
Does Aspen still apply in England after Brexit? The Brussels Recast Regulation no longer applies to new English proceedings, but the structural principles remain influential in English court reasoning and apply directly where the foreign defendant relies on the equivalent regime in its home jurisdiction. The case continues to be cited and followed in practice.
Does this case affect domestic-only PI buyers? Less directly. The biggest impact is on firms with international clients, projects or counterparties. But subrogation principles in the judgment apply to all insurance arrangements.
What is subrogation in plain English? After an insurer pays a claim, it can usually pursue, in the name of the insured, anyone else who is legally liable for the same loss. The insurer "steps into the shoes" of the insured. The doctrine is constrained by what the insured itself could have done.
Can my insurer chase my client after settling a claim against me? Subrogation rights against your own client are generally limited by the doctrine that an insurer cannot sue its own insured. But subrogation against non-clients (counterparties, sub-contractors, third party advisers) is common.
What is the connection to Insurance Act 2015 section 13A? The Act's late payment damages regime in s.13A is a domestic remedy. It does not change jurisdiction, but a buyer relying on s.13A in cross-border circumstances needs to think about where the s.13A claim itself will be litigated.
Should I have an English jurisdiction clause in my PI policy? Generally yes. But understand its limits — protective jurisdiction rules can override the choice of forum where the counterparty is a protected beneficiary in another regime.
What should I tell my insurer at proposal stage about my international clients? Identify your foreign client base by country, sector and value. Identify any concentration. Identify any active disputes outside the UK. The duty under s.3 is to make a fair presentation.
Sources
- Aspen Underwriting Ltd v Credit Europe Bank N.V. [2020] UKSC 11 — Supreme Court judgment on Bailii at https://www.bailii.org/uk/cases/UKSC/2020/11.html
- Aspen Underwriting Ltd v Credit Europe Bank N.V. [2018] EWCA Civ 2590 — Court of Appeal judgment.
- Aspen Underwriting Ltd v Kairos Shipping Ltd [2014] EWHC 3253 (Comm) — underlying scuttling findings.
- Brussels Recast Regulation (EU) 1215/2012, Articles 10 to 16.
- Insurance Act 2015, sections 13A, 14 and 16.
- Lloyd's Law Reports Insurance & Reinsurance, case commentary 2020.
Legal commentary, not legal advice. The application of these principles to any specific situation requires specialist advice. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.