SUBROGATION - LECTURES IN INSURANCE LAW SUBROGATION(Chapter...

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LECTURES IN INSURANCE LAW SUBROGATION (Chapter 15 – Birds) Subrogation is a doctrine, like utmost good faith, that features prominently in insurance but also applies to some other contracts. The justification for it is to prevent unjust enrichment. One limb requires an insured who recovers a sum to compensate for a loss which the insurer has already made payments to repay the insurer. Castellain vs Preston (1881) AllER 11 ,QBD 380 is the leading case on the first limb of the doctrine which is aimed at preventing double recovery by an insured. The second limb allows an insurer who has made payment to the insured to pursue in the name of the insured any remedy against a third party vested in the insured. Many of the justifications put forward for the doctrine are questionable. There is often an insurer standing behind each of the nominal plaintiff and defendant. ‘Knock for Knock’ agreements between insurers (agreements where each insurer meet the claims of its insured) overcame the situation but these have fallen out of fashion and are being discontinued ( see Hanson V Oxford Journal Of Legal Studies 5 (1984( 416). The courts have resolved that the doctrine is equitable and that the issue of treatment or recoveries where the insurer successfully sues for the full loss. The policy wording may modify the 1
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  • Summer '16
  • jane shah
  • Law, insurer

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