Of Proprietary Restitution, Insurers' Subrogation and Insolvency Set-Off - The Untenable Case of Re Ballast
19 Pages Posted: 17 Sep 2007
Date Written: September 13, 2007
The court in Re Ballast  EWHC 3189 (Ch) rejected the proposition that an insurer via subrogation has a proprietary interest in the insured's cause of action, but its reasoning is strewn with confusion and fails to appreciate the impact of insolvency set-off on the principle of indemnity.
All the reasons the court gave in Re Ballast for rejecting proprietary subrogation are in fact compatible with proprietary subrogation.
Academic criticisms against proprietary subrogation failed to pay sufficient regard to the principle of indemnity.
Lord Templeman's preference in Napier v Hunter  AC 713 for proprietary subrogation is correct and is consistent with plenty of North American case-law.
Keywords: subrogation, set-off, principle of indemnity, liquidation, insolvency, unjust enrichment
JEL Classification: K10, K11, K12, K13, K19, K30, K39
Suggested Citation: Suggested Citation