Ted Baker plc and another v AXA Insurance UK plc and others [2017] EWCA Civ 4097

Citation

• Full case name: Ted Baker plc and another v AXA Insurance UK plc and others
• Neutral citation: [2017] EWCA Civ 4097
• Court: Court of Appeal (Civil Division), England and Wales
• Judgment date: 11 August 2017
• Court of Appeal: Treacy LJ, David Richards LJ and Sir Christopher Clarke
• Earlier decisions: [2012] EWHC 1406 (Comm); [2014] EWCA Civ 134; [2014] EWHC 3548 (Comm)

Facts

The retailer suffered a long-running theft of stock from its premises by an employee of another company working there. The thefts continued over a period of years before they were discovered.

The company claimed under the business interruption section of its commercial policies for the profit lost as a result of the stock losses.

The insurers relied on a claims condition requiring the insured to deliver specified documentation and information within a stated period, and said that the condition was a condition precedent to liability. Certain categories of financial and stock reconciliation material had not been provided.

The insured’s answer was that, in the course of the claim, the parties had in practice set quantum documentation to one side pending a decision on liability, and that the loss adjusters had said they would take instructions and revert but never did.

Decision

The Court of Appeal held unanimously that, in the circumstances, the insurers were under a duty to speak in relation to the documentation they were requiring; that they had failed to comply with that duty; and that the failure meant they could not rely on the absence of the documentation as a defence. The estoppel relied on is sometimes described as estoppel by silence or acquiescence.

The court considered it would be unjust and unconscionable to allow an insurer to escape liability on the basis of non-compliance which had itself resulted from the insurer’s breach of the duty to speak.

The insured nevertheless did not recover. Although it succeeded on the condition precedent issue, its claim failed on the evidence of quantum: the judge’s findings about the value of the individual losses stood, and on those findings the claim did not produce a recovery. It is an unusual and instructive outcome — the policyholder won the point of principle and lost the case.

Where the Insurance Act 2015 fits

This claim arose under policies written before the Insurance Act 2015 came into force, so the case is authority on the general law and on the conduct of the claim, not on the Act.

The Act has since changed some of the ground on which arguments like this are fought. Section 11, for example, provides that where a term would tend to reduce the risk of loss of a particular kind, at a particular location or at a particular time, the insurer may not rely on non-compliance to exclude, limit or discharge its liability if the insured shows that the non-compliance could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.

Section 11 does not touch every claims condition, and a genuine condition precedent about the notification and proof of a claim can still be fatal. The safest course remains to comply with the words on the page and to record in writing any agreement to defer something.

Why it matters for insurance

For policyholders the lesson is procedural discipline. Claims conditions requiring notification within a period, or the delivery of specified documents, are frequently expressed as conditions precedent, and courts give effect to them. Where an insurer or adjuster agrees to park a requirement, that agreement should be confirmed in writing at the time.

For insurers and adjusters the lesson is the mirror image. Silence in the face of an obvious misunderstanding, especially where the insurer has created the impression that a requirement has been set aside, can cost the defence.

For brokers this is a claims-handling case as much as a coverage case. The value a broker adds on a large business interruption claim is in tracking the conditions, keeping the correspondence straight and making sure the record shows what was actually agreed. It is also a reminder that a BI claim is won or lost on evidence of quantum, which means the accounting records have to be capable of proving the loss.

See also

• AC Ward & Son v Catlin — conditions precedent and protective conditions
• Kajima v Underwriters at Lloyd’s — what makes a notification of circumstances valid
• Berkshire Assets v AXA — the Insurance Act 2015 applied to a fair presentation dispute
• Aspen v Credit Europe — who can be sued where under a policy

References

• Ted Baker plc v AXA Insurance UK plc [2017] EWCA Civ 4097 (Court of Appeal, 11 August 2017)
• Ted Baker plc v AXA Insurance UK plc [2012] EWHC 1406 (Comm) and [2014] EWHC 3548 (Comm)
• Insurance Act 2015, section 11

Frequently asked questions

What is an insurer's duty to speak?

It is the principle that in some circumstances a party who stays silent, where it would be expected to speak, may be prevented from later relying on the point it kept quiet about. In Ted Baker the Court of Appeal held that the insurers were under such a duty in relation to the documentation they required, failed to comply with it, and could not then rely on the missing documents as a defence.

Did Ted Baker win the case?

It won the point of principle and lost the case. The Court of Appeal held that the insurers could not rely on the documentation condition, but the claim still failed on the evidence of quantum.

How does the Insurance Act 2015 affect claims conditions?

Section 11 prevents an insurer relying on non-compliance with a term that would tend to reduce the risk of a particular kind, location or time of loss, where the insured shows the non-compliance could not have increased the risk of the loss that actually occurred. It does not neutralise every claims condition, and a condition precedent about notifying and proving a claim can still defeat a claim.

This page is insurance information for UK businesses, not legal advice. It summarises a reported judgment and explains why insurance buyers and brokers refer to it; it is not a substitute for reading the judgment or taking advice on your own facts. Case summaries are necessarily short and omit detail. Position stated as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.