Law firm Beachcroft Wansbroughs has used a 100-year-old law called the Law of Declaration to lift the threat of a $30m (£20.4m) property damage claim facing Ecclesiastical Insurance Office.
The damage arose following a fire at a Carmelite shrine in Massachusetts, USA, which had been caused when a Carmelite monk had inadvertently dropped his cigarette while on retreat. The declaration, obtained recently in London's Commercial Court, means that the Ecclesiastical is no longer liable, under its policy, to indemnify the trustees of the Carmelite Charitable Trust for fire damage.
“US insurers of the shrine had threatened legal proceedings to recover the losses,” said partner Peter Hirst.
“The judgment obtained is new authority on the use of declarations in the face of the threat of proceedings, and shows that a declaration can be a useful tool for insurers to repudiate a claim with certainty as to the legal position on policy interpretation.”